The use of bad metrics can be a major impediment to the implementation of effective integrated supply chain management in. 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. The measurement framework is tested by measuring case supply chain performance. The performance measurement system is a framework to measure the efficiency of the supply chain. Supply chain performance measurement systems scpmss are experiencing a new life in business practice thanks to new technologies that allow the collecting, integrating and sharing of information among multiple supply chain partners. Supply chain performance measurement performance measurement is generally defined as the process of quantifying the efficiency and effectiveness of action neely et al. Purporse supply chain performance measurement the process of qualifying the efficiency and effectiveness of the supply chain. Ilkka sillanpaa, university of vaasa, finland ilkka. Produce results from measuring supplier performance. Then, to solve optimization problems of supply chain performance. A literature study was done in order to investigate what metrics can be used in supply chain measurement systems. 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. Several researchers have developed frameworks to help better assessment of the supply chain performance. However, the measurement tools and practices for measuring the whole internal supply chains performance were missing.
Performance management in the transportation and logistics. Managers andor a supply chain consultants could identify measurements we recommended many such measurements herein, in this section, a framework for performance rate their importance using the methodology we measures. Root cause analyses are limited by data aggregation, with the loss of full details, or. A number of leadingedge companies are beginning to implement supply chain performance measurement systems, some calling them scorecards, while others call them dashboards or cockpits. The important decision for any company is to prioritize which supply chain metrics are important and how they will be used. Supply chain performance measures can broadly be classified into two categories. In the last years, several and new productive arrangements were implanted in the brazilian. The measurement framework is a valid framework for supply chain performance measurement. Figure 8 four different types of supply chain performance measurement situations adopted from paper ii. The measurement tools for the internal supply chain were also expected to ensure. The former measure the effectiveness of the supply chain function, while the latter refers to how well these functions are coordinated. Figure 1 depicts an integrated hierarchical supply chain performance measurement system. There are a number of wellknown models and frameworks for operations, logistics and supply chain management. Including a practical excursus on the intel case operations strategy supply chain management swen beyer research paper undergraduate business economics supply, production, logistics publish your bachelors or masters thesis, dissertation, term paper or essay.
University of oulu, faculty of technology, department of industrial engineering and management, p. Two of the most prominent are the scor model and the balanced scorecard, and the interested reader is referred to these. Performance assessment of global supply chains and. 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. 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. Performance management in supply chain and operations. Track the performance of a broader portion of the supply base 2.
Collaborate with suppliers on performance metrics, reporting, and improvements 4. The change on the pattern in the relationship of the automakers with suppliers and dealers is accompanied by a need for modifications on the supply chain performance measurement systems. It consists of relationship between company strategy and supply chain metrics functional classification of decision areas in scm traditional approach to. 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. The dod supply chain metrics guide is the result of collaboration with the military departments. What are the strategies for measuring supply chain. Measuring supply chain performance through kpi identification. Performance measurement a report by the hospital supply chain metrics working group.
The misleading measurements directly affect the key functions of any company and lead to revenue loss and poor longterm growth. It can improve efficiency and effectiveness of not only product transfer, but also information sharing between the complex hierarchy of all the tiers. The roles of supply chain performance measurement on. Long, 1997, for simplifying communication among supply chain actors and for an increased transparency of supply chain and logistics processes gunasekaran and kobu, 2007. This guide is not meant to replace the logistics system as. Pdf global supply chain management and performance. Many companies use supply chain performance metrics that are easy to calculate but may not necessarily give a true indication of how the supply chain is performing. Apr 14, 2000 an illustrative set of supply chain performance measures. Countries have reduced trade barriers to foster the import and export of goods and services. A comprehensive control system will be necessary in order to assure effective and efficient performance measurement all along the supply chain, but it must not be done in such a way as to unduly limit.
Timely and accurate assessment of overall system and individual system component performance is paramount. Study of performance measurement practices in supply chain. Lean supply chains on one hand focus on inventory turnover ratio as a supply chain performance measure c. How to measure supply chain performance material handling. While the metrics shown are largely executivelevel in nature, this company. Data was collected using a self administered questionnaire from 25. Measurement challenges of supply chain performance in. Supply chain performance measures, also called supply chain metrics, can be classified as functional indicators and endtoend supply chain indicators. This research paper attempts to identify literature on performance measurement and key. This research work sought to explore the supply chain performance measurement in the aviation industry. It is stated that supply chain performance measurement is extremely important in developing supply chain. Supply chain management seven steps to measure supplier. Supply chain performance measurement in the manufacturing. A framework for supply chain performance measurement.
The guide also includes functional level metrics that measure performance specific to the functions of inventory management and distribution management. However, studies that truly investigate performance measurement beyond a single firms boundaries are still limited. This note raises issues critical to measuring supply chain performance. At the same time, the demand for being able to measure supply chain performance has increased, implying that the need for finding new ways to measure performance has increased. Authors accepted manuscript supply chain performance measurement systems. 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. The selected method and tools for performance measurement in. Performance measurement in a supply chain springerlink.
Firms are required to focus on the supply chain performance measurement, as it includes the interdependencies across the firms 7. 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. However, the measurement tools and practices for measuring the whole internal supply chain s performance were missing. Global supply chain management and performance measurement.
The objective of this licentiate thesis is to present a framework that identifies which. Supply chain performance measures are critical for maximising value in the supply chain and maintaining oversight. Measuring supply chain performance 20 have evolved as a result of market liberalisation and political integration arndt, 2006, pp. Performance measurement is an essential element of effective planning and control, as well as decision making. The process of choosing appropriate supply chain performance measures is difficult due to the complexity of these systems. The key elements for the measurement framework were defined as time, profitability, order book analysis and managerial analysis.
Because a supply chain is increasingly the sole competitive differentiator for an enterprise, and measuring its performance helps to. Let us look at the most important supply chain performance measurement strategies. Keywords supply chain management, logistics, performance measurement. This study creates a framework for supply chain measurement by presenting the main theory framework of supply chain performance measurement. 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. E supply chain management in 50 words or less understanding supplier performance is a given in todays business environment. Measuring supply chain performance emerald insight. A framework for supply chain performance measurement article in international journal of production economics 873. For example, customer satisfaction and product quality. As described in the background, supply chain management has gained more and more attention during the last four decades. Figure 10 product life cycle phases and different product characteristics, their supply chains, measures and metrics in addition to the measurement situation.
Guide to key performance indicators for public health ma to help managers and logisticians focus on key logistics areas they want to improv them with a tool to do so. Performance assessment of global supply chains and moving. Further, supply chain performance measurement system implementation charan et al. Supply chain performance measures stanford graduate. A single case study research to develop a supply chain performance measurement framework. 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. In todays fierce global environment, continuous performance measurement is the key mantra for any kind of business successes. This study presents the main theory framework of supply chain performance measurement. 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.
Performance measurement a report by the hospital supply. The supply chain is an important element in logistics development for all industries. Performance measures are systematic attempt to learn how responsive an. It is stated that supply chain performance measurement is ex tremely important in developing supply chain. Supply chain performance open universiteit nederland performance measurement initiative to which all can and will be committed.
Raw tonnage is an inappropriate measure of supply chain performance for a diverse product line where gross margin per ton varies considerably. Supply chain performance measure can be defined as an approach to judge the performance of supply chain system. If you want to keep your company on track, it is imperative to implement the key strategies for measuring supply chain performance. Dalu ministry of msme, goi, mechanical engineering dept. Performance measurement of supply chain management. 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. What are the strategies for measuring supply chain performance. Measuring supply chain performance measures prioritizing. Performance measurement supports strategy planning and goal setting. Supply chain performance measurement system based on scorecards and web portals comsis vol. Effectiveness is the extent to which customers requirements are met, while efficiency measures how economically a firms resources are utilized to achieve a. Without the ability to measure performance and progress, the. Since, this study is design to investigate the practices on supply chain performance measurement systems, measurement methods and performance matrices on. A new measurement approach should lead the way for supply chain competitiveness and should direct management attention to.
The methodology followed during the conduct of this research includes starting with a broad base of articles lying at the intersection of supply chain, information technology it, performance measurement and business process management topics and then screening the list to have a focus on supply chain performance measurement. The measurement framework in this study offers guidelines for measuring the supply chain in manufacturing industry but the meas urement framework could be used in different areas of industry as well. Chain metrics working group, their work is set out in the report. Pdf due to the increasing complexity of supply chains, researchers recognize the need for measuring and monitoring the performance of those systems. There is no systematic grouping of the different performance measures in the existing literatures. Organisations monitoring and responding to their adopted key performance metrics will make operational changes and this action may influence the level of dynamics within the supply chain, possibly degrading the performance of the very. Multiple disciplines are applied for optimization of supply chain performance. The need for a structured topological approach to the development of supply chain performance measurement frameworks and methods is addressed. Introduction business organizations need to capitalize on supply chain sc capabilities and resources to bring products and services to the market faster, at the lowest possible cost, with the appropriate product and service features and. Supply chain performance and performance of manufacturing. Automate key supplier performance measurement activities.
Managers andor a supply chain consultants could identify measurements we recommended many such measurements herein, in this section, a framework for performance rate their importance using the methodology we measures and metrics is presented see table 6, used for rating importance. Detailed presentation on performance measurement along supply chain. Standardize supplier performance measurement procedures across the enterprise 3. Supply chain performance measurement in the aviation. Supply chain performance measures stanford graduate school of. Performance measures that accurately reflect supply chain operations are required to support continuous improvement within a supply chain. Figure 9 framework for prioritizing supply chain performance measures. Supply chain performance measurement system based on. Changing your perspective to measure supply chain performance. This helps managers to evaluate scm performance in a muchbalanced way from all angles of business. Definition and supply chain performance supply chain brief. Empirical study of measuring supply chain performance dr. Supply chain performance measurement in the aviation industry. What types of supply chain performance measures should be prioritized to measure in different types of supply chain.
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