Performance measurement in supply chain entities: balanced scorecard perspective

Abstract

Purpose – The purpose of this paper is to empirically examine what senior supply chain executives measure and how they perceive performance measurement from a balanced scorecard (BSC) perspective. Design/methodology/approach – A survey designed from the four perspectives of the BSC framework is conducted on senior executives involved in the supply chain functions of client firms, and those executives from the logistics service provider industry. Findings – Despite the need to provide a balanced approach to performance measurement, firms remain focused on traditional financial measures (gross revenue, profit before tax, and cost reduction). From a supply chain perspective, the non-tangible measures such as customer satisfaction are most measured. Other key logistics performance indicators include on-time delivery, and customer satisfaction. Research limitations/implications – The findings are based on a sample size of 113. Thus, some respondent clusters are smaller than others. Hence, the results may not be representative of the individual clusters. Practical implications – Each supply chain entity must adopt a more balanced perspective in its performance measurement and management. Companies need to recognize the importance of the drivers of strategic future performance. Managing a given supply chain's overall performance necessitates the coordination of measures across the different entities on the supply chain, often requiring all entities to adopt a common balanced perspective in their performance management to facilitate the overall performance and competitiveness of the entire supply chain. Originality/value – This paper is the first attempt to apply the BSC framework on the logistics industry.