the framework for performance measurement on supply chain supply chain is an important element in logistics development for all industries.
The Framework for Performance measurement on Supply Chain
Supply chain is an important element in logistics development for all
industries. It can improve efficiency and effectiveness of not only
product transfer, but also information sharing between the complex
hierarchy of all the tiers. The performance measurement on supply
chain is an appraisal on the performance including overall operation
level, the node enterprises in the supply chain, the cooperation
relationship between the node enterprises, etc. Hence it is
essentially a business-process-based performance measurement
framework.
1. Principles that should be followed
With the continuous development of theories for supply chain
management and advancement of practice, a more effective Index system
to be used for performance measurement should follow a few main
principles as follows,
◇ It should focus on the key points and a thorough analysis on the key
performance indices should be undertaken.
◇ Performance rating indices which reflect the real business process
should be adopted.
◇ Performance rating indices should be able to reflect the operation
status of the overall supply chain, instead of reflecting just the
operation status of single node enterprises of supply chain.
◇The rating methodology should be as far as possible combined with
real-time analysis so as to be able to extend the scope of measurement
to a level within which the real time operation information can be
reflected.
◇During performance measurement on supply chain, the rating indices
which reflect the relationship between suppliers、manufacturers and the
clients should be adopted, so as to be able to extend the scope of
measurement to a level which involves the relative enterprises of the
supply chain.
2. Features of performance measurement indices
According to the aims and basic features of supply chain management
system, performance measurement indices should be able to reflect the
overall operation status of supply chain and the operation
relationship between enterprises of adjacent nodes in a supply chain
properly, instead of evaluating the operation of single provider
without taking the organizational performance of supply chain into
consideration.
Take a raw material supplier with attractive price in the supply chain
as example, the supplier would probably be evaluated as one which
should be chosen if we take an isolated look. But if we evaluate it
from a perspective of cross-functional level in a whole supply chain,
more indices, such as matchability, flexibility etc. must be taken
into account.
3. Index System of Performance Measurement for supply chain
Performance measurements and metrics in SCM
1.Metrics for order planning
1.1. The order entry method
1.2.Order lead-time
1.3.The customer order path
2.Evaluation of supply link
3.Measures and metrics at production level
4.Evaluation of delivery link
4.1.Measures for delivery performance
4.2.Total distribution cost
5.Measuring customer service and satisfaction
5.1.Flexibility
5.2.Customer query time
5.3.Post transaction measures of customer service
6.Supply chain and logistics cost
6.1.Cost associated with assets and return on investment
6.2.Information processing cost