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Probe deeper to find best practices

In stepping bravely into the dashboard "Wonderland" ("Taking Dashboards out of Wonderland," September), Bruce Karr advocates two new dashboard elements: relationships and strategy.

My suggestions have to do with the more traditional ones: financial and supplier performance. As for net financial gain, few companies have the capability to untangle and accurately assign far-flung costs to a supplier relationship; an advanced lean-accounting or activity-based costing system might clear the fog.

However, on-time, in-spec and fairly priced are equate metrics. All three can look good when the supplier is anything but. On prices, a weak supplier can quote low in order to get a foot in the door or simply accept an operating loss in order to cover fixed costs. A supplier with poor quality can ship nearly perfect lots by resorting to the worst quality-assurance practices: sorting out all the bad ones. And if the supplier is always on time but shipping from a warehouse, you have an unlean supplier.

So account managers and buyers need to find out if the supplier uses statistical process control rather than mass inspection, and if it can produce quickly and ship from a lean factory instead of from a warehouse.

Richard J. Schonberger
Independent researcher, author and speaker
Bellevue, Wash.

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