Benchmarking the supply chain performance: development of framework

Abstract

In this study, a framework is developed which uses financial metrics to help a firm benchmark its relative position and identify specific supply chain processes that need improvement. The tools outlined in this study not only highlight areas of opportunity for improvement in the supply chain but also help identify specific reasons behind the performance levels in the chain and stimulate discussion among management. Further, this framework can be used to carry out detailed analyses using publicly held information. Subsequently, the analyst may probe further for additional information to focus on the specific reasons behind a given level of performance of the firm. To illustrate the framework, the proposed tools are applied to the paints industry whereby analysis is done on the business information obtained through an electronic database, which is available in public domain. The framework has proved to be robust. The results have also been supported by the industrial information. Using this framework, a firm should be better placed to come up with suitable policies in line with the industrial and competitive environment it faces.