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Performance Measurement Systems for Supply Chain Management: How to Manage Its Maturity

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Performance Measurement Systems for Supply Chain Management: How to Manage Its Maturity View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by ExcelingTech Publishing Company (E-Journals) 24 Int. J Sup. Chain. Mgt Vol. 3, No.2, June 2014 Performance Measurement Systems for Supply Chain Management: How to Manage Its Maturity Guilherme F. Frederico #1 *Business Administration Department, Federal University of Paraná -UFPR Lothario Meissner Avenue, 632, 2 nd floor, Curitiba/PR Zip Code: 80210-170, Brazil [email protected] Roberto A. Martins #2 *Industrial Engineering Department, Federal University of São Carlos -UFSCar Washington Luís Highway, Km 235, São Carlos/SP Zip Code: 13565-905, Brazil [email protected] Abstract — Supply chains have gained important The possible synergies between the companies, focus after 2000’s due to not only the opportunities members of same supply chain, require the that it can provide but also the complexity involved development of new theories, frameworks, on its management. Into this context, the methods, and techniques. Those will help the implementation of different management practices supply chains managers to overcome the challenge can help companies to achieve better performance in of managing the complexity created by the network their supply chains. As part of these practices it can of companies [1,2] [4-6]. be considered the Performance Measurement Systems (PMSs). The theory for PMSs has been concentrated Performance measurement systems (PMSs) play an on only organization perspective. At the same time important role in managing complex supply chains. the theory about PMSs for SCM is focused more on The task of creating performance measures for scope of measurement leaving a lack with regards supply chain management is a challenge inherent in other dimensions that must be considered on the PMS the complexity of supply chains. Since the 1990s, maturity development. Therefore, this paper aims to some approaches to measure the entire supply present the findings from the literature review about chain performance have been proposed [7]. It is PMS for SCM and maturity of PMS. As contribution worth pointing out that the theory to support the an theoretical model is proposed to help practitioners and researchers on the maturity management of PMS development of business performance measurement for SCM. system is well developed. Unfortunately, the focus of such theory is a single company. Therefore, it is Keywords — Supply chain management, performance necessary to review the business performance measurement systems, maturity measurement system theory to make it feasible to be applied to supply chains [3]. The evolution and 1. Introduction challenges of supply chain management influence the development of performance measurement Nowadays, market competition does not involve systems. A few studies have focused on those only two or more companies anymore. Actually, it factors [8]. occurs between supply chains which compete with The correct alignment between the maturity each other [1-3]. In order to be more competitive, dimensions of PMSs for single organizations and the focus of supply chain management (SCM) PMSs for SCM can be a contribution to the should be cooperation and trust [1]. It is important practitioners since they will understand how to to achieve a level of performance in the entire better manage a PMS in the SCM. This could help supply chain that is more than the sum of managers to be more assertive and effective to performance of each company in the supply chain achieve a superior supply chain performance. This [1]. paper aims to present the findings based on the ______________________________________________________________ literature review showing the alignment between International Journal of Supply Chain Management maturity of PMS for single organizations and PMS IJSCM, ISSN: 2050-7399 (Online), 2051-3771 (Print) Copyright © ExcelingTech Pub, UK (http://excelingtech.co.uk/ ) for SCM. 25 Int. J Sup. Chain. Mgt Vol. 3, No.2, June 2014 Such findings can also contribute to the PMS The planning of the literature review considered as theory in the supply chain management field. a basis the two central themes of the study: supply Therefore, the research question which this study chain management and performance measurement aims to answer is: systems. Into these two main topics the research concentrated to seek sources with the following What are the dimensions to be considered for the key-words and their combinations: maturity management of PMS for SCM? • Supply Chain Management This research question will guide the literature • Performance Measurement Systems review which will be the basis for field researches • Supply Chain Management and Performance to be done in the future. This paper focus on the Measurement System • first step of the research, presenting a literature Maturity • review built based on a systematic approach. This Maturity and Performance Measurement System literature review was the basis to the theoretical model for the relationship between SCM maturity A period of search was established considering and PMS maturity that will be presented. The publications since 1990s until 2012. The long framework will be the basis for the field research to period is justified by the few studies available seek empirical findings linked to the research related to these topics. Also, the study aimed to question. This paper is structured as follows. The show the evolution of the theories and models over next section presents the literature review. The the time. The main sources researched were the following section presents the theoretical following journals: framework on the relationship between maturity of supply chain management and performance • International Journal of Physical Distribution & measurement systems. For last, final remarks and Logistics Management future directions are considered as conclusion of • International Journal of Production Economics • this paper. The International Journal of Logistics Management 2. Literature Review Method • Journal of Business Logistics • Journal of Supply Chain Management The literature review process followed a systematic • Supply Chain Management – An International approach [36]. Management research is a relatively Journal young field and needs more structure and • International Journal of Productivity and systematic process to allow a better support with Performance Management regards the research question which is aimed to • International Journal of Operations & answer in a management field research [36]. Production Management More replicability and traceability of the arguments • International Journal of Supply Chain and conclusions using a systematic approach has Management been being required in the SCM researches [35]. The systematic review basically follows three steps The research was not limited to the journals above [36]: being them the main sources. Other sources were considered as proceeds of events linked to SCM • Planning and operations management, books of relevant • Conduction authors in the area and other documents from the • Reporting and Dissemination organizations and institutes linked to SCM and PMS considering the reliability and quality In the step planning a plan of the literature review assessment criteria of those sources. Important to is developed having as the result a review protocol emphasize the difficulty faced to find a significant which will be used for the next step of the research: number of publications related to the thematic conduction [35]. With regards to conduction step, proposed by this research. Thus, this fact highlights activities as research identification, selection of the originality essence of this study and the needs studies, and assessment of the sources, data for more clarifications related to maturity of PMS extraction and data synthesis are developed [35]. for SCM. This paper will focus on the two first steps, 1 and 2 which aim to build a basis for the field research that will be conducted in the future. 26 Int. J Sup. Chain. Mgt Vol. 3, No.2, June 2014 3. Literature Review Content • Andersson, Aronsson and Storhagen [22]: Focus on processes, customer satisfaction, Into this section the results of the extensive and financial measures. literature review done will be presented. The first section presents the findings of maturity of supply • Van Hoek [23] : Measures related to logistics chain management. In the following section, the costs, customer delivery, flexibility, and level findings about the maturity of PMS are showed. of commitment at the chain. 3.1 Performance Measurement Systems for • Beamon [24]: Focus on basic processes, SCM flexibility, customer satisfaction, and financial measures. New performance measurement systems have been the focus of several researchers since the 1990s • Pires and Aravechia [25] : Focus on customer after they acknowledged the inadequacy of satisfaction for basic process, flexibility, and traditional PMS. The financial performance financial measures. measurements alone were not enough to track the drivers of performance and to support the • Holmberg [26]: Proposal of a holistic PMS for establishment of actions to improve organizational supply chain management. Focus on PMS performance. structure. The new perspective was to change the emphasis of performance measurement from a financial • Brewer and Speh [27]: Based on Balanced perspective to a more holistic perspective Scorecard with performance measures linked to considering cause and effect as well as the link the customer’s value,
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