EVALUATION STRATEGY TOWARDS DEALERS IN THE
3. Indicators Definition for Dealers’
Performance Evaluation
To properly address the existing problems above-mentioned, the indicators definition is conducted by manufacturers. With regard to integrating sales and service processes in a supply chain, the balanced scorecard method is developed for dealers’ performance evaluation.
3.1. Balanced scorecard method
In this paper, the balanced scorecard method, which was first coined by Kaplan and Norton (Kaplan and Norton, 1992) is used for perfor- mance management. It is related to a full-covering strategic evaluation indicator system, comprising both financial and non-financial indicators.
More specifically, it connects the organizational performance evaluation with its long-term vision, mission statement and development strategy;
it converts the organizational mission and tactics into tangible tar- gets and assessment indicators, so as to link organizational plan with performance.
3.2. Evaluation indicators definition
By employing the theory of balanced scorecard method (Brewer and Speh, 2000; Ma, 2002; Shi and Cai, 2003), it is revealed that, while strategic objectives of manufacturers and dealers are defined, their development strategies should be further decomposed and analysed. In particular, this is aimed at promoting he profit, responding dealers’ demands, and improving the sales and services capability. Based on this notion, the evaluation indicators are postulated from four aspects, namely financial issue, customer satisfaction, internal process, and research and innovation (see Fig. 3).
For the purpose of evaluation indicators definition, only the indepen- dency of dealer’s operation is considered. In addition, it is found that the overall optimization on the supply chain should also be taken into account (Brewer and Speh, 2000; Yanget al., 2008; Xiong et al., 2006). In details, relevant indicators are provided as follows.
1. Financial issues. Due to the independent nature of dealer’s operation, financial issue cannot be replied much on dealers’ revenue and profit- related data. From the manufacturers’ viewpoint, the major indicators
Increase profit of the manufacture
Improve service capability Improve
sales Automobile
Manufacture Strategy
Dealers Strategy
Financial indicators
Customs indicator Internal process indicators Self- innovation
indicators
Single vehicle sale profit rate
Sales level rate
On-time interest follow
test drive rate
On-time care follow up rate
Customer maintenan
On-time complain Data retention
rate
sales consultant
service consultant Customer
turndown
Fig. 3 Decomposition of supply chain strategies and evaluation indictors.
for financial issues are associated with the single vehicle sale profit and sales level rates during dealer’s performance evaluation.
(a) The single vehicle sale profit rate is used to avoid vicious compe- titions among dealers in lowering the prices, so as to maintain the market stability.
(b) The sales level rate is used to ensure the dealers’ fulfilment on the sales plan from manufacturers, so as to accurately make the production plan and to reduce the inventory of manufacturers.
2. Customer satisfaction. In essence, supply chain management is aimed to lower the cost of production and servicing by the means of information and resource sharing among the organizations and participants, so as to meet the increasingly-changing customer demands on high-quality products and services. The detailed indicators include the data retention, test drive, customer turndown and customer maintenance rates.
(a) The data retention and test drive rates are used to measure dealers’
ability to attract new customers and to complete successful sales.
(b) The customer turndown and maintenance rates are used to measure dealers’ ability to keep old customers and to maintain existing relationships.
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162 M. Chen, W. Yan and W. Mi
3. Internal process. To meet the expectations of stakeholders and customers, the organization should implement a process that creates customer values. Corresponding indicators include on-time interest follow-up rate, on-time care follow-up and on-time complaint handling rates.
(a) The on-time interest and care follow-up rates are used to improve the dealers’ ability for proactive sales and services.
(b) The on-time complaint handling rate is used to urge dealers to settle customer complaints and to resolve customer problems in time, so as keep old customers.
4. Research and innovation. It is mainly focused on the organization’s long- term development. The primary indicators include sales and services consultant turnover rates.
The aforementioned four categories of indicators are interacted with each other to ensure the achievement of manufacturers’ and dealers’ strategic objectives.
4. Dealers’ Performance Evaluation via ANP 4.1. Analytic network process (ANP)
The dealers’ performance evaluation involves the operation of the entire automobile supply chain. Due to the indicators are inter-dependant with one another, an effective evaluation method should be investigated and employed to resolve this problem (Yan et al., 2009a, b). Accordingly, the analytic network process (ANP) (Qi and Ding, 2006) is applied to analyze the inter-dependant indicators for final performance evaluation.
4.2. Enabling factors of dealers’ performance
As above-mentioned, from a holistic viewpoint of manufacturers, the enabling factors of dealers’ performance are related to sales capability and service capability (see Fig. 4). From the evaluation indicators determined by balanced scorecard method, four aspects of dealers’ performance can be obtained, i.e. the financial condition, customer satisfaction, process efficiency and self-innovation. Each of them is composed of the sub- indicators, as listed in following table (Table 1).
• initiatively sale
• meet the customers demand in time
• inquire the customers demand
• feed back the market requirement to
automobile requirement
Dealers’
performance
• initiatively service
• Solve the customer complain in time
• Meet the customer desire of service in time
• Initiatively care about the customers