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Performance metrics in supply chain management

  • Theoretical Paper
  • Published:
Journal of the Operational Research Society

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.

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Acknowledgements

We thank three anonymous referees and the Joint Editor of JORS, and also Jakko Kleijnen (Philips, Sunnyvale), Ryan R Peterson (Instituto de Empressa, Madrid), Robert-Jan Streng (Atos Origin, Utrecht)), and Frans van Schaik (Deloitte & Touche, The Hague) for their comments on earlier versions.

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Authors and Affiliations

  1. Tilburg University (UVT), Tilburg, The Netherlands

    J P C Kleijnen & M T Smits

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  1. J P C Kleijnen
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  2. M T Smits
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Correspondence to J P C Kleijnen.

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Kleijnen, J., Smits, M. Performance metrics in supply chain management. J Oper Res Soc 54, 507–514 (2003). https://doi.org/10.1057/palgrave.jors.2601539

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  • DOI: https://doi.org/10.1057/palgrave.jors.2601539

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