Performance measurement and relationship management in the automotive supply chain

This paper will discuss the importance of performance measurement systems in the management of vehicle manufacturer and supplier relationships. It is proposed that as relationships become closer, the emphasis of the measurement system should shift from a one way assessment of supplier performance to a joint approach to improving the alignment of the processes and products of both parties. An example of a joint performance measurement system is described with a particular focus on design relationships within the automotive industry. The measurement system does not measure the relationship itself, rather it measures design in a relationship context. The key principles of the joint system are outlined and discussed. Although the responsibility for designing such systems today rests with the vehicle manufacturer, it is suggested that both parties move towards developing mechanisms for joint measurement and assessment.