Measuring performance in supply chain networks andreas seiler salford business school university of salford, salford, uk submitted in partial fulfilment of the requirements of the degree of doctor of philosophy, july 2016. The paper presents an overview and evaluation of the performance measures used in supply chain models and also presents a framework for the selection of performance measurement systems for manufacturing supply chains. For example, companies will look at metrics that show the level of ontime deliveries, ontime receipts, time to process purchase orders, and time to fulfill an order. The study concluded that the downstream supply chain performance measurement is vital among the omcs in kenya with regard to enhancing the performance of their downstream supply chains.
Track the performance of a broader portion of the supply base 2. Performance measures must become the vehicle for communicating the voice of the customer and the firms value proposition. Enterprise integration expo, 9242003 supply chain management. Performance measurement of supply chain management. Time when companies look at selecting supply chain performance metrics, they usually will examine those metrics that relate to time, as they are easily calculated, easily understood, and clearly show operational effectiveness. Collaborate with suppliers on performance metrics, reporting, and improvements 4. Most systems are isolated, static, and with metrics that are. The selected method and tools for performance measurement in. With substantial resources dollars and people being applied towards.
Let us look at the most important supply chain performance measurement strategies. The key objectives of the study were, to establish the supply chain performance measures used by the company and to determine the challenges encountered in supply chain performance measurement. Yet, the majority of companies only establish quality performance and measurement programs with less than 2 of the total supply base. Supply chain management seven steps to measure supplier. Performance management system is defined as the set of metrics used to quantify the efficiency and effectiveness of an action. Many methods and techniques have been suggested over the. What are the strategies for measuring supply chain performance. Supply chain performance measures are critical for maximising value in the supply chain and maintaining oversight. It consists of relationship between company strategy and supply chain metrics functional classification of decision areas in scm traditional approach to performance measures limitations of traditional performance management performance measurement today along supply chain the impact of various supply chain initiatives. The measurement framework in this study offers guidelines for measuring the. Measuring supply chain management performance supplychain. Supply chain performance measurement in the manufacturing.
Performance management in the transportation and logistics. Transparency of supply chain costs performance management in supply chain and operations steering value chain activities towards exceptional performance the supply chain reporting should provide a balanced view on customers, demand and supply as well as on financials. It can improve efficiency and effectiveness of not only product transfer, but also information sharing between the complex hierarchy of all the tiers. For example, companies are using risk adjusted rolling forecasts, and integrating their risk and performance measurement processes. Measuring supply chain performance emerald insight. Performance measurement of supply chain management using the. The supplier performance measurement benchmarking report. A performance measure is defined as a metric used to quantify the efficiency andor effectiveness of an action. Pdf this study aims at proposing a performance measurement system pms to assist in the supply chain management. For example, customer satisfaction and product quality. The balanced scorecard developed in this paper provides a useful guidance for the practical managers in evaluation and measuring of scm in a balanced way and proposes a balanced performance measurement system to map and analyze supply chains. Measuring supply chain performance through kpi identification and evaluation niclas gamme, martin johansson department of technology management and economics chalmers university of technology abstract supply chain management has become one of the most discussed topics in business. Key performance measures for supply chain management from the colombian shipyard wilson adarme jaimes1 1 industrial engineering, production specialist, msc industrial engineering.
Pdf performance measurement system in supply chain. The project data was collected from the companys quality system, individual departments documents, internal discussions and the sap. Global supply chain management and performance measurement. The measurement framework is a valid framework for supply chain performance measurement in manufacturing industry.
Both qualitative and quantitative data was collected and used on the decision making process. Pdf global supply chain management and performance. Supply chain performance open universiteit nederland 1. Performance assessment of global supply chains and. The dod supply chain metrics guide is the result of collaboration with the military departments. It is only by means of performance measurement that one can see how much one is behind or ahead of its competitors. Scm has been associated with a variety of advantages including increased customer value, increased profitability, reduced. Social performance measurement for sustainable supply. Despite of finding many conceptual frameworks supply chain performance evaluation that has been investigated in the literature. All this should not dissuade users, however, from starting to measure their supply chains performance in the context of assessing the success of initiatives aimed at achieving strategic objectives. Detailed presentation on performance measurement along supply chain.
What follows are nine guidelines that we believe are essential to the strategic supply chain. The study recommended omcs to put in place structured methods of the downstream supply chain performance measurement to ensure. If you want to keep your company on track, it is imperative to implement the key strategies for measuring supply chain performance. What are the strategies for measuring supply chain. Ilkka sillanpaa, university of vaasa, finland ilkka.
Supply chain performance measures, also called supply chain metrics, can be classified as functional indicators and endtoend supply chain indicators. Supply chain management is a melting pot of different business functions and through utilizing key performance indicators kpis, measurements or metrics used by management, issues can be captured and. Supply chain management can cut total costs while increasing performance. The goals of supply chain management are to reduce uncertainty and risks in the supply. E supply chain management in 50 words or less understanding supplier performance is a given in todays business environment. This paper aims to examine the measurement of performance in offshore oil and gas logistics, which has unique characteristics such as a supply chain sc exposed to a harsh environment, the presence of several independent carriers and a highly specialised and costly set of vessels involved in longdistance transport legs.
Supply chain performance measure can be defined as an approach to judge the performance of supply chain system. The roles of supply chain performance measurement on. A logistics and supply chain management approach to port. Mar, 2018 organizations today rely on procurement to drive value beyond unit price savings. Enterprise architecture and performance measurement in federal civil sector larry rutledge. Study of performance measurement practices in supply chain. Measuring the supply chain management performance is an essential task when attempting to optimize the supply chain for your business. Actually, the lean and green philosophies have been adopted in the scm context, but nearly always separately and with little understanding of their influence on supply chain performance. In this section, we make an attempt to summarise some of the most appropriate performance metrics and measures of scm treating supply chains as extended. Four best practices to improve quality in the supply chain. Are your performance measurements destroying your supply. Additionally, it generally involves integration, coordination, collaboration and performance measurement across organizations and throughout the supply chain. Performance assessment of global supply chains and moving.
Pmg examined bestinclass industry performance of customerfacing and internalfacing measures in supply chain. The former measure the effectiveness of the supply chain function, while the latter refers to how well these functions are coordinated. Performance measurement for green supply chain management article pdf available in benchmarking an international journal 124. Scm is a complex topic to understand because it encompasses the management of many activities, and involves multiple roleplayers across divisional functions and organisations. Maximizing supply chain performance in the transportation and logistics industry cognizant white paper executive summary managing transportation and logistics has been a critical focus area for manufacturers, distributors and thirdparty logistics players in their pursuit of developing a lean, agile and efficient customeroriented supply chain. It provides the necessary assistance for performance. The process of choosing appropriate supply chain performance measures is difficult due to the complexity of these systems.
It is stated that supply chain performance measurement is extremely important in developing supply chain. Introduction development of a suitable framework for measuring the performance of a supply chain is a challenging task. Mentzer et al 2001 define supply chain management scm as the. Performance management in supply chain and operations steering value chain activities towards exceptional performance. The performance measurement group pmg, a subsidiary ofprtm management consultants, have released results of the first survey in its 19002000 supply chain management benchmarking series. Introduction since the term supply chain management was introduced, there has been a great deal of confusion about what it actually involves. Gallen and whu otto beisheim school of management, respectively. Downstream supply chain performance measurement by the oil. Keywords supply chain performance, scor, performance measurement framework, supply chain management, balanced scorecard, military, army, supply chain i. Keywords agricultural supply chain, supply chain performance measurement, fuzzy comprehensive evaluation pages 49 p. To continually manage costs and improve performance, a company must be able to not only select the right supply chain partner but more importantly monitor and proactively manage quality in the supply chain. Procurement performance measurement in 2018 supply chain. Performance measurement chartered institute of management. This research work sought to explore the supply chain performance measurement in the aviation industry.
Performance management in supply chain and operations. Measurement challenges of supply chain performance in. Measuring supply chain performance through kpi identification. Social performance measurement for sustainable supply chain. Supply chain performance measurement in the aviation. This way, the relevance of results for logistics and supply chain managers was further. To show improvement in operations, many supply chain management specialists co implementing supply chain performance indicators or metrics as one of the simples and least timeconsuming activities. It is widely acknowledged that there has been relatively little interest in developing measurement systems and metrics for evaluating supply. As an indispensable management tool and the vehicle to achieving success, performance measurement enables supply chain to strategically manage and continuously control achieving of objectives. In supply chain context, performance measurement can further facilitate inter understanding and integration among the supply chain members. The purpose of the thesis is to develop a structured framework for creating and evaluating supply chain performance indicators with the aim of facilitating organisations efforts when measuring supply chain performance. Therefore supply chain performance measurement will be defined and restrained to other concepts such as supply chain controlling and monitoring.
The global economy is featured with global operations, outsourcing and supply chain and ecommerce. Produce results from measuring supplier performance. Performance measurement of sustainable supply chains. For chief procurement officers cpos, it is challenging to measure the performance of managers who drive these sources of value. The supply chain is an important element in logistics development for all industries. Measuring supply chain performance measures prioritizing. Empirical study of measuring supply chain performance dr. The misleading measurements directly affect the key functions of any company and lead to revenue loss and poor longterm growth. Supply chain performance measurement systems are important because they are the central managerial mechanisms for achieving efficient and effective supply chain management. Performance measurement in a supply chain springerlink.
It is a wellknown fact that, people behave based o. Scm has been researched by a number of different disciplines including marketing, logistics. Several researchers have developed frameworks to help better assessment of the supply chain performance. Supply chain performance study by balfaqih h, et al. Supply chain performance measures can broadly be classified into two categories. Fair and accurate performance measurement is critical for attracting, retaining and. A decision framework for evaluating and selecting supplier performance in a supply chain article pdf available january 2009 with 2,525 reads.
The measurement revealsthe effect of strategies and potential opportunities in scm 2. The types of measures that companies should use and their advantages and drawbacks are provided, alongside useful information on implementing a supply chain performance measurement system. Since, supply chain performance measures allow a large amount of. There is no systematic grouping of the different performance measures in the existing literatures. Impacts of using a performance measurement system in.
This paper develops a balanced scorecard for supply chain management scm that measures and evaluates daytoday business operations from following four perspectives. Supply chain management practices and supply chain. Performance measures and metrics in logistics and supply. Standardize supplier performance measurement procedures across the enterprise 3. The guide also includes functional level metrics that measure performance specific to the functions of inventory management and distribution management. Study on performance measurement systems measures and metrics. Supply chain performance measurement in the aviation industry. Jan 17, 2020 as the supply chain morphs, so too will performance measurement in order to be more consistent with this environment. The evaluation result will be used on higherlevel management to improve project management and decisionmaking. Performance measures and metrics are essential for effectively managing logistics operations, particularly in a competitive global economy. Pdf performance measurement of supply chain management. Pdf performance measurement for green supply chain management. Automate key supplier performance measurement activities.
924 1358 1568 205 777 1315 515 1571 520 1064 1267 1131 324 1316 483 1404 101 986 880 917 910 410 302 190 1007 623 66 18 431 119 665 9 335