Sustainable Supply Chain: Key Performance Indicators
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With the high levels of global competition and economic challenges, the supply chain capabilities and outsourcing relationships are some of the competencies that organizations are using to compete against each other. Supply chain effectiveness and efficiency analysis is an approach to improve their overall performance. The purpose of this thesis is to: identify the key factors to evaluate when selecting suppliers, describe supplier selection approaches, define specific areas subject to performance evaluation and integrate all into a theoretical model that will serve as a guide for organizations to create a competitive advantage based on supply chain capabilities and outsourcing relationships. The thesis was divided into three main sections to accomplish this goal.
The first stage is focused on the factors that should be considered when selecting an outsourced supplier and what the selection approaches are in order to assure that these factors are efficiently analyzed. Eight factors are identified and the applications of three supplier selection approaches are explained. The second stage of the research represents a study conducted to identify the areas where performance evaluation tools should be implemented. Key Performance Indicators (KPI) and other metrics must be implemented to continuously analyze how the efficiency and efficacy of the supply chain may be improved. Analysis of scheduled orders, production activity, delivery processes, customer satisfaction and finance and logistics are the five important areas identified and their connection with the buyer-supplier relationship is explained. The third stage is focused on the introduction and explanation of a proposed theoretical model that would serve as a guide to efficiently manage the performance of the buyer-supplier relationship.
It is concluded that firms should closely evaluate their interaction with their supplier throughout all the relationship stages: time of supplier selection, establishment of the relationship and evaluation of the performance. A firm may find a competitive advantage from this evaluation that will provide the opportunity to overcome the high level of competitiveness in today’s business world.