Performance measurements are an inherent part of any strategic alliance. Ultimately, the success of any alliance will be gauged by the fulfillment of the original business objectives and the resulting benefits realized by the purchaser and supplier. However, these objectives and benefits will never be achieved if interim performance measurements are not made a part of the alliance process during the maintenance period. Interim performance measurements measure progress to the various goals that have been developed from the broader business objectives of the alliance. Although these measurements may be used for the duration of the alliance, they are interim in that the quantitative performance goal is periodically raised as the improvement process is implemented and the alliance matures. Both the purchaser and the supplier should jointly establish a measurement process that integrates performance accountability, defect identification, cost improvement commitment, problem solving, and two-way communication.
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