Development of a supply chain performance measurement model integrable to industry
Dissanayake, Chamila K
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Researchers have claimed that most of the attempts to implement supply chain performance measurement (SCPM) systems fail. Major reasons highlighted state that existing measurement systems do not provide a definite cause–effect relationship among numerous and hierarchical individual performance factors, and the absence of universal consensus regarding suitable measures of SCPM. Many reviews indicate that there’s still a little amount of reviews, theory development, framework and cases done on the field compared to empirical research. Also, many measurement systems lacked strategy alignment, a balanced approach and systemic thinking and there is no systematic way to identify the most appropriate metrics for a specific context. The specific purpose of this research therefore is to introduce a systematic mechanism for developing a SCPM model capable of measuring the supply chain (SC) performance internal to an organization using organizational quantitative data. A case study approach is used to demonstrate how to identify the SC performance hierarchy for an organization reflecting the strategic performance areas, and build up the regression relationship for the overall SC performance. Research identified Supply Chain Operations Reference (SCOR) model as a comprehensive framework for initiating the model development process; and identified SEM as the estimation technique to address the need of an aggregate measure of overall SC performance and a cause-and-effect relationship. ‘Profit’ and ‘lead time’ were selected for the direct performance measurement factors of overall SC performance for the final model in the case study context. Model run results demonstrated the existence of significant positive linear relationships between the SCOR performance categories: reliability, agility, asset management, responsiveness, and the overall SC performance in the given study context. Case study illustrated the mechanism to include or opt out the performance measurement factors from the model, and the managerial survey conducted with the organization established the validity of its final model. Researcher believes that the introduction of this systematic mechanism addressed several gaps in literature while adding to the few real-world case studies of a similar nature.