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From Firm Performance To Supply-Chain Performance: Methodologies Used at International Level

This document discusses methodologies for measuring performance at the firm and supply chain level. It outlines that traditional performance measurement systems focused on costs and efficiency using accounting measures, while emerging systems take a more holistic and strategic approach. The document reviews several emerging frameworks for measuring supply chain performance, including the balanced scorecard, Cambridge model, and performance prism. These systems aim to quantify effectiveness, link measures to strategy, and consider both financial and non-financial indicators from a long-term customer perspective. The final section notes advantages and disadvantages of these approaches and challenges in implementing performance measurement systems.

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101 views1 page

From Firm Performance To Supply-Chain Performance: Methodologies Used at International Level

This document discusses methodologies for measuring performance at the firm and supply chain level. It outlines that traditional performance measurement systems focused on costs and efficiency using accounting measures, while emerging systems take a more holistic and strategic approach. The document reviews several emerging frameworks for measuring supply chain performance, including the balanced scorecard, Cambridge model, and performance prism. These systems aim to quantify effectiveness, link measures to strategy, and consider both financial and non-financial indicators from a long-term customer perspective. The final section notes advantages and disadvantages of these approaches and challenges in implementing performance measurement systems.

Uploaded by

Sajid Pervaiz
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We take content rights seriously. If you suspect this is your content, claim it here.
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FROM FIRM PERFORMANCE TO SUPPLY-CHAIN PERFORMANCE:

METHODOLOGIES USED AT INTERNATIONAL LEVEL

LIVIU ILIEŞ, DELIA BUTILCĂ, EMIL LUCIAN CRISAN


Babeş-Bolyai University, [email protected]
Babeş-Bolyai University, [email protected]
Babeş-Bolyai University, [email protected]

ABSTRACT Organizations employ a wide range of qualitative and


The goal of this article is to perform a review of the main quantitative measures that have accumulated over time to
methods used worldwide for performance measurement, meet particular operational requirements (Heim and
both at firms and supply-chains level. Why is important to Compton 1992). The growing interest in performance
measure performance? And which are the methods management has led to an updating of the accounting
traditionally used at international level? Different authors, systems and an extension to the non-cost performance (De
different opinions, several contradictions. The final part Toni and Tonchia 2001). Neely et al.(1995) define a
of this article is used for presenting advantages and performance management system as the set of metrics
disadvantages of different frameworks used at supply used to quantify both the efficiency and effectiveness of
chain level, but also the main problems that exist in actions. Bititci et al.(1997) contend that the performance
implementing these methodologies. measurement system enables a closed-loop deployment of
organizational strategies, which provides a structured
framework to allow the relevant information to feed back
KEY WORDS to the appropriate points to facilitate the decision and
Supply-chain, performance measurement, methodology. control processes.
These emerging performance management systems can be
grouped into two distinct categories (Wongrassamee et al.
1. Introduction 2003)
The first are those which emphasize self-assessment, e.g.
Performance measurement plays an important role in the the Deming Prize in Japan and Asia (Deming 2004), the
efficient and effective management organizations Baldrige Award in the USA (NIST 2004), and the
(Kennerley and Neely 2002). The way an organization European Foundation for Quality Award using the EFQM
measures performance reflects its corporate culture and its Excellence Model in Europe (EFQM 2004).
strategy formulation and deployment. The second are those designed to help managers measure
Performance measurement is the glue that holds the and improve business processes, e.g. the Performance
complex value-creating system together, directing Pyramid (Lynch and Cross 1991; McNair et al 1990), the
strategic formulation , as well as playing a major role in balanced scorecard framework (Kaplan and Norton 1996,
monitoring the implementation of that strategy. 2000), the Cambridge Performance Measurement Process
The swift from firm perspective to the concept of SCM (Bourne et al. 2000; Neely et al. 1996, 2000), and the
requires measuring overall supply chain performance performance prism (Adams and Neely 2000; Neely et
rather than just the performance of the individual chain al.2001).
members. It is the combined performance of the supply Table 1. Evolution of performance measurement systems
chain, the final outcome of the efforts of all integrated Traditional performance Emerging performance
measurement systems measurement systems
members, which is very important from a measurement
Based on traditional Based on company strategy
perspective. Although measures of supply chain accounting system
performance differ in terms of individual indicators Based on cost/efficiency Value-based
employed, virtually all have one overriding focus: Trade-off between Performance compatibility
continual improvement of end-customer service. performance
Profit-oriented Customer-oriented
Short-term orientation Long-term orientation
Prevalence of individual Prevalence of team measures
2.Traditional versus Emerging performance measures
Prevalence of functional Prevalence of transversal
measurement systems measures measures
Comparison with standard Improvement monitoring

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