Benchmarking of supply chain performances

Benchmarking of supply chain performances

Article Type: Guest editorial From: Benchmarking: An International Journal, Volume 16, Issue 5

About the Guest Editor

Hokey MinJames R. Good Chair in Global Supply Chain Strategy in the Department of Management at the Bowling Green State University. He was Distinguished University Scholar and Founding Director of the UPS Center for World-wide Supply Chain Management and the Center for Supply Chain Workforce Development at the University of Louisville. He earned his PhD degree in Management Sciences and Logistics from the Ohio State University. His research interests include global logistics strategy, health-care supply chain, benchmarking, and supply chain modeling. He has published more than 120 articles in various refereed journals including European Journal of Operational Research, Journal of Business Logistics, Journal of the Operational Research Society, Transportation Journal, and Transportation Research.

As the threat of the world-wide recession looms large in the coming years, today's supply chain managers are faced with the challenge of continuously enhancing their companies' competitiveness in the market. Such a challenge includes the relentless pursuit of supply chain excellence by improving the utilization of company resources, while streamlining the supply chain. The pursuit of supply chain excellence often begins with the assessment of the company's supply chain performances relative to its main competitors. In other words, supply chain benchmarking represents one of the most important prerequisites to supply chain excellence. With this in mind, this special issue of Benchmarking: An International Journal (BIJ) brought together the recent advances in benchmarking tools and their applications to various aspects of supply chain activities. This special issue contains a total of seven selective, but diverse papers based on case studies, empirical work, or analytical framework that can add value to the supply chain knowledge base.

This special issue starts with a paper by Hokey Min and Seong Jong Joo who proposes data envelopment analysis (DEA) to measure the financial efficiency of 12 leading third-party logistics (3PLs) in the USA, relative to their key competitors during the period of 2005 through 2007. Through their DEA analyses, they discovered that the rapid expansion of the business scope could undermine the financial efficiency of 3PLs due to huge start-up investments. In particular, business expansion through mergers and acquisitions could hurt the financial efficiency of 3PLs due to restructuring and re-branding costs. They also found that the non-asset based 3PLs had the less financial burden than their asset-based counterparts due to their limited investment in assets.

The second paper by Selçuk Perçin utilizes the two-phase analytical hierarchy process (AHP) and technique for order preference by similarity to ideal solution (TOPSIS) method to select 3PLs for the Turkish auto-part supplier. The AHP-TOPSIS method was proven to be useful for decomposing an unstructured 3PL selection problem into a reliable hierarchic structure that includes various multiple criteria, sub-criteria and alternatives to determine the best choice, while eliciting judgments from decision-makers to determine weights of the elements.

The third paper by Adrien Chia, Mark Goh, and Sin-Hoo Hum conducted an empirical study to investigate how a balanced scorecard was used to measure supply chain performances. Their surveys of 113 Singaporean firms revealed that despite the need to provide a balanced approach to supply chain performance measurement, many Singaporean firms still focused on traditional financial measures such as gross revenue, profit before tax, and cost reduction. From a supply chain perspective, the non-tangible measures such as customer satisfaction was most measured by the surveyed firms. The other supply chain performance indicators that were perceived to be important include on-time delivery, employee turnover, employee satisfaction, and cost reduction.

The fourth paper by Pierre Hadaya identifies the critical dimensions of usage of internet-based inter-organizational systems (IOISs) of the best performing firms through an electronic survey of 228 computer and electronic manufacturers in Canada. His empirical study reveals that:

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  volume of use and depth of use are the two critical dimensions of internet -based IOISs usage on the supplier side;

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  volume of use, level of integration, diversity of types and depth of use are the four critical dimensions of internet-based IOISs usage on the customer side; and

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  a deviation from these patterns of internet-based IOISs usage should result in poorer supply chain performance.

The fifth paper by Alan C. McKinnon critically reviews the first ten years of the UK Government's “Transport key performance indicator (KPI)” programme which benchmarks the efficiency of road freight operations. His review indicated that, across various industry supply chains, similar distribution operations could have markedly different energy intensity. The UK Government's “Transport KPI” programme has, nevertheless, been deficient in several respects. In particular, too little attention has been given to the inter-relationship with other logistical activities, the causes of observed differences in efficiency and subsequent changes in company behaviour.

The sixth paper by Hua Song and Lan Wang examined current practices of logistics cost management (LCM) in mainland China and identified factors significantly affecting the effectiveness of LCM using the questionnaire-based survey. Their survey results showed that Chinese firms lacked effective logistics cost measurement tools and reporting systems. Also, the Chinese firms had difficulty in hiring competent logistics professionals who were in short supply. Furthermore, they experienced difficulty in promoting information integration across the organization and the supply chain. Part of such difficulty stemmed from blind investment in information technology without considering its cost implications.

The seventh paper by R. Premkumar, Suhaiza Zailani, and Mohamed Sulaiman conducted a case study to investigate how significantly information flow, organizational linkage, supply chain infrastructure, and resource sharing influenced the supply chain partnership. The case study reveals that the company which is less interested in the benefits gained from the partnership and is more likely to be concerned about the risks associated with a smaller supplier base than the other tended to be a reluctant player in the partnership. Also, such a company tended to use the traditional supplier evaluation criteria such as low cost or price in finding the right supply chain partners.

Finally, Jitesh Thakkar, Arun Kanda, and S.G. Deshmukh integrate a balanced scorecard with a supply chain operations reference model to develop supply chain performance measures intended for small and medium scale enterprises. Using a case study and secondary data analysis of Indian firms, they illustrated the usefulness of the integrated supply chain performance measures for enhancing visibility across the supply chain and subsequently identifying the supply chain weaknesses of small and medium scale enterprises.

To summarize, I sincerely hope that these papers selected for the special issue of BIJ can be valuable resources and guidelines for both academicians and practitioners alike who are interested in improving supply chain performances. The Guest Editor gratefully acknowledged the continued support, encouragement, and guidance provided by Editor-in-chief, Dr Angappa Gunasekaran and the valuable suggestions made by anonymous referees who helped to improve the quality of this special issue.

Hokey MinGuest Editor