Performance Measurement and Relationship Management in the Automotive Supply Chain

Abstract

This paper will discuss the importance of performance measurementsystems in the management of vehicle manufacturer and supplierrelationships. It is proposed that as relationships become closer, theemphasis of the measurement system should shift from a one wayassessment of supplier performance to a joint approach to improving thealignment of the processes and products of both parties. An example of ajoint performance measurement system is described with a particularfocus on design relationships within the automotive industry. Themeasurement system does not measure the relationship itself, rather itmeasures design in a relationship context. The key principles of thejoint system are outlined and discussed. Although the responsibility fordesigning such systems today rests with the vehicle manufacturer, it issuggested that both parties move towards developing mechanisms for jointmeasurement and assessment.