Measurement of excellence and cost in a supply chain

Abstract: This Doctoral Thesis addresses the topic of measurement of excellence and cost in a supply chain. In this thesis, a framework for monitoring and analysis of cost in the supply chain is developed. A model for analyzing excellence in a supply chain is also developed. The work aims to facilitate improvements and to improve decisionmaking regarding Supply Chain Management (SCM) and excellence and cost improvements in supply chains. The thesis contains an introduction, a literature review and five papers. The first paper considers performance measurements in supply chains within companies having business in Sweden. An empirical study was initiated in order to investigate what performance measurements they use to measure the performance in the supply chain. Main focus has been on excellence and cost. Interviews with supply chain professionals within the selected 30 companies have been conducted in Sweden. In the second paper a framework is suggested for measuring cost in the supply chain. The framework defines Supply Chain Cost (SCC). Total SCC is the sum of Manufacturing cost, Administration cost, Warehouse cost, Distribution cost, Capital cost and Installation cost. The third paper considers. An Average Logistic Index, ALi , was suggested as a method for measuring excellence in the supply chain. This index combines the cost concept and the customer service concept. In paper IV are the SCC framework from paper II and the excellence model in paper III used in a framework for evaluating changes in a supply chain. Two scenario analysis are based on a five step approach measuring SCC and customer service measures, delivery precision and lead-time, before and after a performed or planned change. Paper V considers how offshoring and outsourcing activities are affecting excellence and SCC in the supply chain. Ten managers from different companies were interviewed. Pitfalls when handling decisions about offshoring and outsourcing and criterias for successful offshoring and outsourcing were identified. The papers in this thesis can be used in different ways and in that way help companies in taking the right decisions about improvements in the supply chain. People within the industry who are active in the supply area would then get models and frameworks for measuring excellence and SCC in the supply chain. Implementation of the models and frameworks are recommended to be implemented in Enterprise Resource Planning (ERP) systems in order to simplify and secure the measurement of excellence and SCC in the supply chain.