Supply chain performance measurement for third party logistics

Abstract

Purpose

The purpose of the paper is to explore the applicability of the Supply Chain Operations Reference (SCOR) model and to identify the key performance indicators (KPIs) for the service-oriented sector – namely a third-party logistics (3PL) service provider.

Design/methodology/approach

The performance attributes of SCOR model (reliability, responsiveness, flexibility, cost measures and asset management efficiency) are used as the basis for defining the KPIs. A questionnaire was sent to relevant decision makers.

Findings

This paper illustrates the use of the integrated approach of SCOR, fuzzy analytic hierarchy process (FAHP) and Technique for Order Preference by Similarity to Ideal Solution (TOPSIS) for measuring the supply chain performance (SCP) in the light of a real life case study company.

Research limitations/implications

This method forms the basis for performance measurement using the SCOR model to evaluate strategy. In this work, the performance of the company has been compared with its own previous performance. The work can be extended to external benchmarking and also to other sectors.

Practical implications

The paper attempts to overcome the conflict between the top-down strategy and bottom-up implementation process. The paper links the strategic objective with operations which would aid managers at different levels of an organization with decision making. The KPIs, when implemented in a business intelligence (BI) tool, would result in real time performance measurement.

Originality/value

The paper focusses on 3PLs. It provides a base for measuring the SCP using SCOR model. The paper also identified KPIs for three domains of 3PL, namely freight forwarding, customs and warehousing.

Citation

Jothimani, D. and Sarmah, S.P. (2014), "Supply chain performance measurement for third party logistics", Benchmarking: An International Journal, Vol. 21 No. 6, pp. 944-963. https://doi.org/10.1108/BIJ-09-2012-0064