Samenvatting

This research paper is written acting upon instructions from Ahold European Sourcing. This department within the international retail organization Ahold (Koninklijke Ahold N.V.) is responsible for the purchasing of private label, fresh, non food and not for resale goods in Europe.
Ahold European Sourcing wants a Performance Management System to measure its performances and to communicate these performances back to its employees.
The research question is the following:

What is the Performance Management System that is best suitable for measuring Ahold European Sourcing?

Several existing Performance Management Systems are analyzed. Based on the literature, a good Performance Management System for Purchasing should meet the following criteria:
1. Both Strategic and Operational measures
2. Both Lead (input measures) and Lag (outcome measures) indicators
3. All stakeholders should be considered (Suppliers, Internal customers and top management
4. Both Financial and Non-Financial measures
5. Both Effectiveness and Efficiency measures
6. Inclusion of sustainability
7. Applicable to retail
Because the strategy of Ahold European Sourcing includes increasing sustainability, the Performance Management System should include sustainability Key Performance Indicators.
There is no system that meets all the listed criteria, and therefore a tailor made Performance Management System (which is based on the Purchasing Performance Model of van Weele (2005)) is created based on the theory and on the Ahold European Sourcing strategy.