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Performance metrics in supply chain management

Author

Listed:
  • J P C Kleijnen

    (Tilburg University (UVT))

  • M T Smits

    (Tilburg University (UVT))

Abstract

This survey paper starts with a critical analysis of various performance metrics for supply chain management (SCM), used by a specific manufacturing company. Then it summarizes how economic theory treats multiple performance metrics. Actually, the paper proposes to deal with multiple metrics in SCM via the balanced scorecard — which measures customers, internal processes, innovations, and finance. To forecast how the values of these metrics will change — once a supply chain is redesigned — simulation may be used. This paper distinguishes four simulation types for SCM: (i) spreadsheet simulation, (ii) system dynamics, (iii) discrete-event simulation, and (iv) business games. These simulation types may explain the bullwhip effect, predict fill rate values, and educate and train users. Validation of simulation models requires sensitivity analysis; a statistical methodology is proposed. The paper concludes with suggestions for a possible research agenda in SCM. A list with 50 references for further study is included.

Suggested Citation

  • J P C Kleijnen & M T Smits, 2003. "Performance metrics in supply chain management," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 54(5), pages 507-514, May.
    • Handle: RePEc:pal:jorsoc:v:54:y:2003:i:5:d:10.1057_palgrave.jors.2601539
    DOI: 10.1057/palgrave.jors.2601539
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    References listed on IDEAS

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