trust measurement
Post on 13-Aug-2015
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Trust Measurement TRUST BASED MEASUREMENT A QUANTITATIVE APPROACH TO IMPROVE THE
TRUST LEVEL YOU HAVE IN YOUR SUPPLIERS FROM “LOW” TRUST LEVEL TO “HIGHER” TRUST LEVEL.
TO KNOW THE TREND PERFORMANCE BETWEEN YOU AND YOUR SUPPLIERS.
Trust Measurement A QUANTITATIVE APPROACH TO QUANTIFY AND TO KNOW WHAT TO
IMPROVE. THIS METHOD NEED TO BE SUITABLE TO YOU, OTHERWISE THIS MIGHT NOT BE THE TOOL TO BE USED TO IMPROVE YOUR SUPPLIER’S PERFORMANCE
TO MEASURE THE VARIABLES.
Trust Measurement A SYSTEM DYNAMICS
REPRESENTATION TRUST IN CUSTOMER AND SUPPLIER
INTERACTION
TRUST LEVEL
CONTROL
+
FEEDBACK
+
DISTURBANCE
-
DELAY
-
DISTANCE
-
+
CO-OPERATION
+
SUPPLIER’S COMMITMENT
Trust Measurement THE TRUST EQUATION THE PERFORMANCE (LINKED TO TRUST)
CONSISTS OF THE SUMMATION OF ALL THE WEIGHTED COMPONENTS OF TRUST.
PERFORMANCE, P = CONTROL (C1) + FEEDBACK (F) – DISTURBANCE (D1) – DELAY (D2) – DISTANCE (D3) + CO-OPERATION (C2) + SUPPLIER’S COMMITMENT (C3)
Trust Measurement BY ADDING A WEIGHTED FACTOR (F), THE
EQUATION IS NOW P = (F1 * C1) + (F2 * F) - (F3 * D1) - (F4 * D2) –
(F5 * D3) + (F6 * C2) + (F7 * C3)
Trust Measurement THE EQUATION IT IS A RIGID EQUATION, AND THE FACTORS
THAT YOU PUT IN IT, WILL BE BASED ON THE ABOVE EQUATION
THE EQUATION WILL ONLY HELP YOU IN KNOWING WHICH COMPONENTS OF TRUST IS THE LOWEST, IMPROVING IT FROM THE LOWEST COMPONENT UNTIL AN ACCEPTABLE LEVEL TO YOU.
Trust Measurement THE INFLUENCES OF TRUST AND THE
EFFECTS CO-OPERATION, SUPPLIER’S COMMITMENT,
CONTROL AND FEEDBACK HAS POSITIVE RESULT ON TRUST LEVEL
DISTANCE, DISTURBANCE AND DELAY HAS NEGATIVE RESULT ON TRUST LEVEL
Trust Measurement THE INFLUENCES OF TRUST AND THE
EFFECTS (CON’T) THE COMPONENTS OF TRUST WILL
DETERMINE WHETHER THE SUPPLIER IS NOT PERFORMING IN WHICH AREAS
IMPROVING THESE COMPONENTS TO A SATISFACTORY LEVEL WILL INCREASE THE TRUST LEVEL
Trust Measurement QUANTITATIVE APPROACH IS MORE
ACCURATE FOR EXAMPLE, THE NUMBER OF REJECTS IS
10 IN A SHIPMENT. THE TOTAL ORDER QUANTITY IS 100. THIS MEANS THAT THE PERCENTAGE OF REJECT IS (10/100)*100 = 10 % FOR A MAXIMUM MARKS OF 100% GIVEN FOR CONTROL, THE ACTUAL TRUST LEVEL ACHIEVED IS 90% (WHICH MEANS THAT TOTAL MARKS - REJECT MARKS = 100% - 10% = 90%.
Trust Measurement QUALITATIVE APPROACH IS
SUBJECTIVE SUPPLIERS' RESPONSE IS LATE. HOWEVER,
THE INFORMATION REQUIRED IS NOT CRITICAL. MARKS GIVEN FOR LATE RESPONSE WILL BE BASED ON OWN JUDGEMENT, WHICH MIGHT NOT BE ACCURATE. FOR EXAMPLE, RESPONSE IS 3 MONTHS LATE. ALTHOUGH THE INFORMATION IS NOT REQUIRED URGENTLY, THE TRUST LEVEL ACHIEVED IS APPROXIMATELY 80%. 20% IS TAKEN OUT WITHOUT ANY CALCULATED JUSTIFICATION.
Trust Measurement PREDICTING TRUST LEVEL (OR A TIME
SERIES FORECASTING TECHNIQUE) SIMPLE MOVING AVERAGES
T = (P-N) … + (P-1) + (P0) / N+1 - (1) EXPONENTIAL SMOOTHING
T = (α * T0) + (1 – α) * P0 - (2)
T = TRUST LEVEL P = PERFORMANCE α = SMOOTHING FACTOR
Does this mean T = P? T = f(P) –(1), f(P & T0)-(2)
Trust Measurement PREDICTION ERROR (SUM OF
ERRORS) PREDICTION ERROR = SUMMATION OF PAST
PREDICTION – SUMMATION OF ACTUAL ENTERED VALUE
TOTAL ERROR Te , PREDICTION Tp, ACTUAL Ta Te =| Σ Tp - Σ Ta |
Trust Measurement PREDICITON ESTIMATE IT IS NOT POSSIBLE TO PREDICT AN ACTUAL
VALUE AN ESTIMATE DEVIATION OF THE ACTUAL
VALUE CAN BE DETERMINED A REASONABLE AMOUNT DATA IS SUFFICIENT
TO ESTIMATE THE PREDICTION
Trust Measurement THE COMPONENTS OF TRUST ARE: CONTROL (A POSITIVE EFFECT ON TRUST) FEEDBACK (POSITIVE) DISTURBANCE (NEGATIVE) DELAY (NEGATIVE) DISTANCE (NEGATIVE) CO-OPERATION (POSITIVE) SUPPLIER’S COMMITMENT (POSITIVE)
Trust Measurement CONTROL THE INPUT VARIABLES ASSURES
THE QUALITY OF GOODS OR SERVICES - CONTROL THE INPUT VARIABLES
CONFORMING TO THE REQUIREMENTS
FEEDBACK FROM THE SUPPLIERS LINKS YOU AND YOUR SUPPLIERS- FEEDBACK TO SUPLIERS ON OFF-SPECIFICATION TO INPUT VARIABLE OR A CHANGE IN DESIGN REQUIREMENT FOR CORRECTIVE ACTION
Trust Measurement DISTURBANCE FROM EXTERNAL FACTORS
IMPAIR THE OPERATIONS - DISTURBANCE IS UNCONTROLLABLE. IT IS AN
EXTERNAL FACTOR THAT NEED TO BE CONSIDERED
DELAY IN RESPONDING TO CUSTOMER QUERY WILL DISTORT THE FLOW OF INFORMATION- DELAY IS SOMETHING THAT THE SUPPLIER IS NOT ABLE TO RESPOND TO THE FEEDBACK
Trust Measurement THED PHYSICAL DISTANCE BETWEEN YOU
AND YOUR CUSTOMER AFFECTS THE POWER OF COMMUNICATION
- DISTANCE IS THAT THE SUPPLIERS ARE LOCATED FAR AWAY. IT AFFECTS PERSONAL INTERACTION
CO-OPERATION STRENGTHENS THE RELATIONSHIP
- SUPPLIER’S WILLINGNESS TO CO-OPERATE. WORK TOGETHER TOWARDS A DIRECTION
Trust Measurement SUPPLIER’S COMMITMENT ASCERTAIN THE
INTERACTION - SUPPLIERS COMMITMENT THEIR
RESOURCES AND EFFORT, ETC.
Trust MeasurementWHAT MAKE UP THE COMPONENTS? 1 CONTROL A) ARE THE PARTS ARRIVED ON TIME? B) ARE THERE A LOT OF REJECT IN THE
SHIPMENT?
2 FEEDBACK A) DOES YOUR SUPPLIER REPLY TO THE
THINGS THAT YOU ASK B) DO YOU FEEDBACK TO YOUR SUPPLIERS?
Trust Measurement 3 DISTURBANCE A) UNCERTAINTIES THAT AFFECTS YOUR
RELATIONSHIP B) MARKET IS UNCERTAIN DUE LACK OF
KNOWLEDGE IN THE AREA OF VENTURE
4 DELAY A) LATE RESPONSE FROM SUPPLIERS ON
YOUR REQUEST B) DELAY IN DETECTING A FAULT
Trust Measurement 5 DISTANCE A) DID THE SUPPLIER RESPONDED TO AN
INCREASE ORDER QUANTITY? B) CHANGE IN DESIGN WAS TAKEN CARE BY
THE SUPPLIER PERFECTLY
6 CO-OPERATION A) THE PRICE OF THE PARTS ARE CORRECTLY
VALUED. B) HOW'S THE PRICE?
Trust Measurement 7 SUPPLIER’S COMMITMENT A) BETTER SALES VOLUME AS COMPARED TO
PREVIOUS B) NEW COMPETITOR EXIST
Trust Measurement
THE SIGNIFICANCE OF COMPONENTSAN AUTHORITY EXEMPLIFIED – CONTROL THE
SITUATION
INFORMATION AND ITS FLOW – MOVEMENT OF INFORMATION
UNCERTAINTY OF THE EXTERNAL – TO COPE WITH THE UNKNOWNS
THE ATTITUDE OF THE INTERACTION PARTIES – A BEHAVIOURAL SCIENCE
Trust Measurement INTERACTIVE SOFTWARE TRENDING SOFTWARE (IN THE PROCESS OF DEVELOPING) (ABOUT 2 TO 3
MONTHS)
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