This study investigated supply chain performance measurement for the manufacturing industry based on the primary and the secondary data and developed Integrated Supply Chain Performance Measurement (ISCPM) model through the supply chain performance attributes in the outlook of in put-process-output considering the BSC and the SCOR model at three decisions levels. In the context of the current market dynamics and uncertainties, companies need to upgrade and prepare for resilient supply chain operations, identify the gaps in new normal especially after the pandemic COVID 19, and way forward to address how companies will be organized to handle the strategic supply chain issues and maneuver promptly to ensure a smooth and flawless operation which is extremely challenging in this unpredictable moment. The integrated model incorporates ten supply chain performance measurement attributes and thirty-six performance measurement indexes as supplier relationship management (SRM), internal supply chain management (ISCM), and customer relationship management (CRM). Finally, the ISCPM model reviews and appraise the operational performance of an organization.
Manufacturing organizations have perceived the benefits of effective SCM in day to day operations. Conversely, numerous organizations disregarded to generate enthralling performance and operational measures which are indispensable to warrant a commendable and coordinated SCM (Molina-Besch, 2016). To realize the solitary of globalization and SCM objective, which is to indulge customers more rapidly and more effectively than other competitors, SCM necessities to participate in the nonstop execution of developmental strategies.
SCM is an integrated method in business from the suppliers of raw material, factories, inventory and delivering to the customers that ensures right product at an accurate price, is in an appropriate size, and at a right place that delivers the optimum lot size through proper distribution channel (Aleksandra et al., 2017). Practically, integrated SCM involves both logistics and strategic decisions for the sustainability of business operations. In other words, integrated SCM implies a concept to monitor all aspects of business operations and ensure value-adding activities through collaborative efforts both from manufacturers and logistics providers.
Top Management of the manufacturing companies has been studying innovative methods to attain competitive leverage where integrated SCM is reflected as an effective strategic approach to enhance competitive advantage in this modern era of intense global competition. Business dynamic forces have been transformed that put the arm on the legislative requirements to measure the performance of the manufacturing industry where companies have been witnessing to unlock the tools that can assess the supply chain performance measurement (SCPM) commendable (Kurien & Qureshi, 2018).
The justification of this study is to assess the literature on supply chain performance measurement (SCPM) in the manufacturing industry to capture existing practices, distinguish gaps and recommend forthcoming investigation itineraries. The study also recommends an Integrated Supply Chain Performance Measurement (ISCPM) model in the manufacturing industry.
This study consists of seven sections—1) introduction, 2) literature reviews, 3) supply chain performance measurement, 4) research methodology, 5) conceptual framework, 6) discussions, and 7) conclusion. In the literature review, the study investigated different supply chain performance measurement model frameworks and highlighted the appreciation and criticism made by the research scholars over the period.
The focus was given to the BSC model and the SCOR model which have been widely accepted and adopted. In section 5, the study illustrated the conceptual framework, and section 5.1 illustrated the step-by-step Integrated Supply Chain Performance Measurement (ISCPM) model development. In section 6, ten supply chain performance measurement attributes and thirty-six performance measurement indexes were elaborated in
There is an urgency for a comprehensive direction for the researchers to evaluate supply chain performance measurement (SCPM) for the manufacturing industry that addresses supply chain performance measurement (SCPM) attributes and performance measurement index from cost and non-cost perspective, evaluate on strategic, functional or emphasis on operational levels in order to evaluate the bottom-line impacts of an organization (Kumar et al., 2020).
As of now, the supply chain performance measurement (SCPM) is evaluated into a financial and non-financial measurement system. Business enterprises witnessed a paradigm transformation to evaluate SCPM, where Global companies adopted either Supply Chain Operations Reference (SCOR) model or Balanced Scorecard (BSC) model.
Despite an incredible appreciation of the Balanced Scorecard model (BSC) in the corporate to evaluate supply chain performance measurement (SCPM), the model has found multifold constraints (Kottala & Herbert, 2019). As time passes by, it becomes more noticeable—the model did not think through leadership or capacity building to assess its performance, it is also considered as an observing and monitoring apparatus instead of a development apparatus and inclined towards strategic level as opposed to planning or operational level.
The BSC model does not deliver appropriate direction to run a business, replicate the market competition, formulate a mathematical or logical association, and it is also challenging to make a comparison within and across a firm (Kurien & Qureshi, 2018).
This BSC model is not operational for a small organization as it involves know-how of managerial capacities, the relationship of a cause and effect to select the best measure of performance has not also been considered in this model where it predominantly discharges internal corporate perspective (Taghipour et al., 2015).
External influences such as risk, government regulations, uncertainty, collaborations, sustainability, and continuous improvement are not also considered in this BSC model, where it also overlooks environmental, social and sustainability factors and completely miscarries to classify buyer and supplier relationship, supplier network and strategy factors, to address employee motivation, employee engagement, team building, agility factors in a dynamic environment, resilient factors, and finally future business opportunities were not considered in this model (Hussain et al., 2019).
In contrast, the SCOR model was formulated to provide a business to enhance its efficiency with a vision to regulate the supply chain performance measurement (SCPM) and investigate as a point of reference for enterprises and inter-link the financial statement. The SCOR model also miscarries to anticipate the global outlook on market uncertainty and business risk.
Multifold issues such as sustainability, visibility, and IT-related upgradations were not also shielded within the SCOR model, training and development, capacity building, a collaboration of inter and intra organizational or functional activities are not also reflected (Shokouhyar et al., 2020).
Supply chain performance measurement (SCPM) supports the decision—making process through a holistic approach. It assists an organization meaningfully, where top-level executives are enthusiastic about understanding the bottom-line impacts of an organization and performance measurement parameters reflects from procurement, manufacturing, warehouse, distribution, customer service as well as financial aspects of an organization (Kumar et al., 2020). Ideally, the performance measurement model should consider quantitative as well as qualitative approach and have the capacity to apply different measuring tools.
Furthermore, the performance measurement parameters should come together in agreement with certain features like comprehensiveness, universal acceptability, and steadiness (Hussain et al., 2019).
Researchers reported that accurate measurement of performance could be beneficial to businesses in order to formulate, implement and control organizational strategy, where stated that employee motivation and organizational culture retention are also impactful in this performance measurement. Kaplan and Norton (1992) pronounced the Balanced Scorecard (BSC) model as an authoritative performance measurement instrument, and it allows administrators to detect a composed understanding, where the researchers recommended four basic perceptions that administrators should observe and follow—financial, customer feedback, internal business processes & innovation and learning perceptions.
The author demonstrated how SCM structure is connected in a balanced scorecard model; the BSC model is dominant in delivering managers with a comprehensive image of business performance.
Nevertheless, it undergoes two elementary restraints. First, it is a top-down tactic. Hence, it is not participative and might miscarry to perceive prevailing collaborations between different procedure metrics (Kaplan & Norton, 1992).
The SCOR model was formulated by the SC Council (SCC) to support businesses to enhance the effectiveness of their SCs and to deliver a process-based approach to SCM, where the SCOR model carries a common process-oriented language in communicating among its SC associates in Plan, Source, Make and Deliver, where SCOR model designate, measure and estimate any SC configuration (Phan et al., 2019). There are twelve performance matrices as part of the SCOR Model to evaluate process performance: delivery reliability, flexibility, responsiveness, costs, and an asset to derive at a quantifiable SC performance measure
Alternatively, SCOR model does not contemplate on market uncertainty, where information visibility, IT-related issues, business sustainability, training and development, capacity building, etc. are also excluded in the scope of the SCOR model (Bhagwat & Sharma, 2007). No clear interaction of inter and intra organizational or functional activities are mentioned in the SCOR model (Miraz et al., 2016, 2017).
The study applied an exploratory study method based on primary and secondary data. Review of journal papers on supply chain performance measurement was made. The target population in this study was Bangladesh manufacturing industry, which consists of twenty-four manufacturing sectors. Based on the analysis, twenty-four manufacturing sectors have around 7570 manufacturing companies. Therefore, the population size is 7570. From the 7570 lists of the respondent companies, 1832 individual company-have been chosen randomly and emails have been sent to the supply chain heads to respond.
An individual company’s supply chain professional has been considered as the unit of analysis. This study applied simple random sampling and used the Taro Yamane table at ±7% precision level, and confidence level at 95% the sample size of this research is 199. In this study, the researcher composed 207 respondents from the manufacturing industry. Hence, 207 respondents are the sample size in this study. Apart from these, the study also explored secondary data from Emerald, IJSCM, IGI, Nova publishers etc.
The study formulates Integrated Supply Chain Performance Measurement (ISCPM) model for the manufacturing industry, where the model coordinates and shares information up and down the process. To provide a theoretical structure,
In this study, the author discussed supplied inputs like raw materials, where raw materials are transformed into finished products in the manufacturing premises, and finished products are being channeled out through the distribution up to the consumer in
This study identifies SC macro-environmental process, which describes supplier relationship management (SRM) as a supplier, internal supply chain management (ISCM) as a manufacturer and customer relationship management (CRM) as a customer referred from
Three decision levels are embedded in SRM, ISCM, and CRM; as illustrated in
The strategies for overall business operations are formulated at a strategic level from controlling to overseeing for SRM, ISCM and, CRM. They are referred to corporate-level executives who give complex decisions that require strategic direction, long-term commitments and planning for one year and beyond. The decisions eventually drive the firm to a sustainable position. Mid-level management belongs to the planning level and executes the firm’s plans as per the policy designed by the senior management where a decision needs less than a one-year horizon. This is appropriate for SRM, ISCM, and CRM. At the operational level, bottom line executives focus mostly on controlling and directing on a regular basis and measure plan versus actual applicable for SRM, ISCM, and CRM.
ISCPM Model DevelopmentThis exploratory study in
were financial, process, learning & development, and finally, customer-centric issues are to be considered.
This study in
The researcher in
The researcher exhibits the ISCPM model, where the researcher classifies that an organization is ultimately responsible for its four stakeholders: shareholder, customer, people, nature, and community.
The first and foremost responsibility of an organization is to serve its shareholders’ interests through continuous growth and profitability.
The shareholders are better served when an organization has the highest focus to serve its customers through ensuring customer service excellence. The shareholders and customers could be made satisfied when the people of the organization perform satisfactorily through ensuring organizational excellence. The last and most important for an organization is to be responsible for their stakeholder who is nature and community. An organization should be responsible for its nature and its community in order to ensure that it is not engaging itself into any harmful activities through pollution of air, soil or releasing toxic gas or substances to nature. Not only that, but an organization also has responsivity towards its people, its community through the eradication of poverty. Therefore, when a firm’s performance is balanced to its four stakeholders, then and only true sustainability is achieved (Saleheen et al., 2018, 2019).
The researcher in
Attribute 1 in
Attribute 2 in
upstream to the downstream, internal as well as external. The performance measurement index (PMI) is further segregated into CL4, CL5, and CL6, which are Inventory, Planning Variance, and Partnership.
Attribute 3, in
Attribute 4, in
| Attribute 01 | Performance Measurement Index (PMI) | Reference | |
|---|---|---|---|
| Financial Health (FH) | Economic Performance FH1 | Sales, Gross Margin, EBITA, Net Profit, Market Capitalization, Total Assets, Total Liability, Cash to Cash Cycle Time, Net Working Capital, Contribution to National Exchequer and Total CSR | ( Alora & Barua, 2019 ; Kurien & Qureshi, 2018 ) |
| Cost FH2 | COGS, Operating Cost, Total SCM Cost, Logistics Cost | ( Alora & Barua, 2019 ; Kurien & Qureshi, 2018 ) | |
| Budget Variance FH3 | Budget Variance in Customs Duty, Customs, Penalty, C & F Cost, Demurrage, Handing Damage, Cost of Production/Unit, Annual Wastage, Delivery Cost/Trip etc. | ( Alora & Barua, 2019 ; Kurien & Qureshi, 2018 ) | |
| Attribute 02 | Performance Measurement Index (PMI) | Reference | |
|---|---|---|---|
| Collaboration (CL) | Inventory CL4 | Inventory Holding Days, Ageing & Turnover | ( Panahifar et al., 2018 ; Garay-Rondero et al., 2019 ) |
| Planning Variance CL5 | Production, Distribution, Forecast, Supply Chain Cycle Time | ( Panahifar et al., 2018 ; Garay-Rondero et al., 2019 ) | |
| Partnership CL6 | Supplier & Buyer Trust Level, Joint Problem Solving Initiative, Training, Continuous Improvement Goal Setting, Information Sharing on Production Plan, Inventory and Forecasting | ( Panahifar et al., 2018 ; Garay-Rondero et al., 2019 ) | |
| Attribute 03 | Performance Measurement Index (PMI) | Reference | |
|---|---|---|---|
| Velocity (VC) | Capacity Flexibility VC7 | Finance, Production, Storage, Transportation, Material Equipment’s, Cold Chain, Technology, IT Integration | ( Kurien & Qureshi, 2018 ; Sreedharan et al., 2019 ) |
| Speed VC8 | Manufacturing Time/Unit, No of Delivery Per Week, Loading/ Unload Time, Goods Handling Volume (Storage, Service), Urgent Response Time | ( Kurien & Qureshi, 2018 ; Sreedharan et al., 2019 ) | |
| Flexibility Consistency VC9 | Preventive & Scheduled Maintenance, Buffer Spares Parts, Line Balancing, Total Down Time | ( Kurien & Qureshi, 2018 ; Sreedharan et al., 2019 ) | |
| Attribute 04 | Performance Measurement Index (PMI) | Reference | |
|---|---|---|---|
| Resilience (RE) | Global Risk RE10 | Environmental, Political, Economic, Technological, Government, Legal, Ethical Business, Terrorism | ( Panova & Hilletofth, 2018 ; Chen, 2018 ) |
| Enterprise Risk RE11 | Planning to Payment, Alternate Sourcing, Security Program, Theft, Sabotage, Counterfeit | ( Panova & Hilletofth, 2018 ; Chen, 2018 ) | |
| Human Capital and Management Risk RE12 | Critical resource issues, risk and trends of demographic skills, appropriate work force and skills | ( Panova & Hilletofth, 2018 ; Chen, 2018 ) | |
| Supplier Risk RE13 | Documentation of Supplier Contract Terms, Scope, Credit, Service, Specifications, Penalty, Litigations, Appraisal, Checklist for Commercial Documents (To avoid customs penalty) | ( Panova & Hilletofth, 2018 ; Chen, 2018 ) | |
| Attribute 05 | Performance Measurement Index (PMI) | Reference | |
|---|---|---|---|
| Reliability (RL) | Be on Time RL 14 | On Time Arrival, Delivery, (RM, FG, Transport), Receive & Submission of PI, LC, Document, Customs Clearance, Freight Forwarder etc. and Product Fill Rate | ( Garay-Rondero et al., 2019 ; Zhang, 2017 ) |
| Be on Specifications RL 15 | Goods Receiving as Per Specifications, % Delivery Rejects, % Return, Time to Respond Urgent Calls | ( Garay-Rondero et al., 2019 ; Zhang, 2017 ) | |
| Be on Utilization RL 16 | Raw Material Consumption Ratio, Machine Utilization Ratio, Delivery Fill Rate, Field Failure Ratio | ( Garay-Rondero et al., 2019 ; Zhang, 2017 ) | |
into RE10, RE11, RE12, and RE 13 which are Global Risk, Enterprise Risk, Human Capital & Management Risk, and Supplier Selection & Appraisal.
Attribute 5, in
Attribute 6, in
Attribute 7, in
| Attribute 06 | Performance Measurement Index (PMI) | Reference | |
|---|---|---|---|
| Continuous Improvement (CI) | Process Standardization | SOP, Quality Management Systems, Environmental Management Systems, Occupational Health and Safety Management Systems, Energy Management System, Information Security Management, Certification on Asset Management, Anti Bribery Certification, Data Protection Certification, Certification: Food Safety, Six Sigma, Lean, Kaizen, Kanban etc. | ( Kumar et al., 2020 ; Sreedharan et al., 2019 ) |
| Culture for TQM | i) Top management commitment, (ii) employee involvement, (iii) customer focus, (iv) facts based management, (v) process monitoring & control, (vi) incentive and recognition, (vii) continuous improvement orientations, (viii) quality performance, (ix) service culture | ( Kumar et al., 2020 ; Sreedharan et al., 2019 ) | |
| Culture for Continuous Improvement | (i) Organizational direction and CI goals, (ii) balanced innovation and improvement plan, (iii) constant change culture, (iii) standardized process, (iv) standardized improvement method, (v) training and career path, (vi) information & technical support | ( Kumar et al., 2020 ; Sreedharan et al., 2019 ) | |
| Application of 5S | (i) Sort, (ii) Straighten, (iii) Shine, (iv) Standardize, (v) Sustain | ( Kumar et al., 2020 ; Sreedharan et al., 2019 ) | |
| Application of Lean | (i) Over production, (ii) Inventory, (iii) Motion, (iv) Transport, (v) Process, (vi) Defects, (vii) Waiting times | ( Kumar et al., 2020 ; Sreedharan et al., 2019 ) | |
| Application of Total Productive Maintenance | (i) Focused improvement, (ii) autonomous maintenance, (iii) planned maintenance, (iv) quality maintenance, (v) cost deployment, (vi) Training & Education, (vii) Safety, Health & Equipment and (vii) Early Equipment Maintenance including all buffer stock of parts. | ( Kumar et al., 2020 ; Sreedharan et al., 2019 ) | |
| Attribute 07 | Performance Measurement Index (PMI) | Reference | |
|---|---|---|---|
| Visibility (VS) | Integration VS 23 | Assessment and integration for in transit, production, on hand and SC cost visibility | ( Sundram et al., 2018 ; Kumar et al., 2020 ) |
| Traceability VS 24 | Product traceability and quality information from planning to payment | ( Sundram et al., 2018 ; Kumar et al., 2020 ) | |
| ERP Transactions VS 25 | All SC requisition, purchase, distribution, payment through ERP | ( Sundram et al., 2018 ; Kumar et al., 2020 ) | |
transactions. Integration deals with Assessment and integration for in transit, production, on hand, and SC cost visibility. Traceability deals with Product traceability and quality information from planning to payment, and ERP transactions deal with Product traceability and quality information from planning to payment.
Attribute 8, in
Attribute 9, in
| Attribute 08 | Performance Measurement Index (PMI) | Reference | |
|---|---|---|---|
| Work Place Health (WPH) | Leadership WPH 26 | Written Vision & Mission, Objective, KPI, Performance Appraisal Process, Transformational Leadership capabilities, Data Analytics, Strategic Plan, Sustainable Business Policy | ( Sabiu, 2019 ; Kumar & Goswami, 2019 ; Tuniet et al., 2018 ) |
| Ethics, Integrity & Compliance WPH 27 | Anti-corruption/bribery policy, ethical procurement policy, supplier ethical code of conduct | ( Sabiu, 2019 ; Kumar & Goswami, 2019 ; Tuniet et al., 2018 ) | |
| Talent Attraction and Retention WPH 28 | Diversity and equal opportunity, fair market salary and benefits, performance based reward policy, career development plan, capacity building initiative and succession plan, monitor employee turnover | ( Sabiu, 2019 ; Kumar & Goswami, 2019 ; Tuniet et al., 2018 ) | |
| Health & Safety WPH 29 | Occupational health and safety practice, safety audits, safety performance assessment and report | ( Sabiu, 2019 ; Kumar & Goswami, 2019 ; Tuniet et al., 2018 ) | |
| Culture, Value and Employee Engagement WPH 30 | Organizational written values, defined job classifications and decision making authorities, employee respect, positive change and healthy cultural environment, labor/management relations, unscheduled employee absenteeism | ( Sabiu, 2019 ; Kumar & Goswami, 2019 ; Tuniet et al., 2018 ) | |
| Attribute 09 | Performance Measurement Index (PMI) | Reference | |
|---|---|---|---|
| Sustainability (SS) | Sustainability to Nature: SS 31 | Activities on Environmental Impact on Clean Energy & Conversion, Activities on GHG Emission (CO2 e/Ton of Production), Activities on Air Emission, Activities on Biodiversity, Activities on Waste Management, Environmental Compliance Policy aligning with UN Sustainable Development Goal | ( Kumar & Goswami, 2019 ; Shokri Kahi et al., 2017 ) |
| Sustainability to Community SS 32 | Corporate Social Responsibility (CSR) aligning with UN Sustainable Development Goal | ( Kumar & Goswami, 2019 ; Shokri Kahi et al., 2017 ) | |
| Application of Green SC SS 33 | Green procurement, green product development, green logistics | ( Kumar & Goswami, 2019 ; Shokri Kahi et al., 2017 ) | |
Attribute 10, in
| Attribute 10 | Performance Measurement Index (PMI) | Reference | |
|---|---|---|---|
| Service Excellence (SE) | Customer Satisfaction SE 34 | Application of Artificial Intelligence, Application of Industry 4.0, Application of Industrial Internet of Things (IIoT), any new innovation to improve product quality through technology | ( Kumar et al., 2020 ; Ghadge et al., 2020 ) |
| Customer Satisfaction SE 35 | Overall service rating, Field Failure Ratio (FFR), Lead time from complain and problem solving, Sales people friendliness and professionalism, Environment neatness and comfort for service center, Call center feedback clarity, Accessibility of call center, online payment facility etc. | ( Kumar et al., 2020 ; Ghadge et al., 2020 ) | |
| Service Facilities & Technical Skills SE 36 | Team skills, technical facilities | ( Kumar et al., 2020 ; Ghadge et al., 2020 ) | |
surement index (PMI) is further segregated into SE 34, SE 35, and SE 36 which are Innovation in Technology, Customer Satisfaction, and Service Facilities & Technical Skills. Innovation in Technology deals with Application of Artificial Intelligence, Application of Industry 4.0, Application of Industrial Internet of Things (IIoT), any innovation to improve product quality through technology.
The researcher exhibits the ISCPM model, where the researcher classifies that an organization is ultimately responsible for its four stakeholders: shareholder, customer, people, nature, and community. The first and foremost responsibility of an organization is to serve its shareholders’ interests through continuous growth and profitability. The shareholders are better served when an organization has the highest focus to serve its customers through ensuring customer service excellence. The shareholders and customers could be made satisfied when the people of the organization perform satisfactorily through ensuring organizational excellence. The last and most important for an organization is to be responsible for their stakeholder who is nature and community. An organization should be responsible for its nature and its community in order to ensure that it is not engaging itself into any harmful activities through pollution of air, soil or releasing toxic gas or substances to nature. Not only that, but an organization also has responsivity towards its people, its community through the eradication of poverty. Therefore, when a firm’s performance is balanced with its four stakeholders, then and only true sustainability is achieved.
Recommendation and Future ResearchThis ISCPM model has been prepared based on twenty-four manufacturing industry sectors and validated empirically. This model can measure supply chain performance measurement holistically where the stakeholders such as shareholders, customers, people, nature, & community can be better served with the appropriate strategies to review and appraise their performance toward fulfillment of the ultimate goals. However, it is suggested to implement this in real-life applications, particularly in the manufacturing industry.
The limitation of this study is that this model did not consider the service industry like hotel & tourism, education, and hospital sectors which are also very much important. Also, this model has not been validated and tested in real-life applications in the industry. Therefore, this would also be a potential future study for the researchers.
The authors declare no conflicts of interest regarding the publication of this paper.
Saleheen, F., & Habib, Md. M. (2022). Integrated Supply Chain Performance Measurement Model for the Manufacturing Industry. Journal of Service Science and Management, 15, 55-70. https://doi.org/10.4236/jssm.2022.152005