MEASURING PERFORMANCE OF SUPPLY CHAIN WITH SCOR MODEL: E-LOGISTICS ASPECT Premporn Khemavuk and Maruf Hasan School of Mechanical and Manufacturing Engineering The University of New South Wales, Sydney, NSW, 2052, Australia Email: z2176587@student.unsw.edu.au ABSTRACT This paper presents the outcomes of a study of supply chain performance focusing on distribution channel and warehouse system. The objective of this study is to analyze different patterns of distribution channel and warehouse system from manufacturing firms in Thailand. E-warehouse system is also investigated to see how it affects supply chain performance. Different patterns of distribution channel and warehouse system from various manufacturing firms are worked out through two main stages. At the first stage, in-depth interviews with managers from manufacturing firms are conducted with questionnaire which based on Supply Chain Operations Reference (SCOR) model. The second stage focuses on field observation which also provides the details of business processes of various manufacturing firms. The measurement of the performance of supply chain focusing on distribution channel and warehouse system is based on statistical analysis. The results show the best-in-class manufacturing firm with its existing patterns of distribution channel and warehouse system that work well in real world. KEY WORDS Supply Chain Performance, SCOR-Model, Distribution Channel and Warehouse System 1. Introduction During the last few decades, logistics has been considered with the increasing recognition about its importance to enterprises, organizations and also economy. Today e- logistics in Thailand is becoming more important to be competitive in industrial and services business. Many companies seriously consider e-logistics as their strategies to stay ahead their competitors. Part of the logistics chain is physical distribution which describes various activities taking place after the production of goods and before they reach customers or end users. These activities include inventory management and warehousing, material handling, transportation and delivery management, and packaging and order management. The distribution center in logistics operations has been studied in many areas including location selection [1,2], number of warehouse [3], and route selection [4]. Banomyong and Beresford [4] present a cost model of multimodal transport which was originally proposed by Boerne [5] and developed by Beresford and Dubey [6]. The main elements of the model are cost, time, distance, transport mode and intermodal transfer. A multimodal transport cost-model is used to illustrate and clarify multimodal transport routing alternatives. They introduce a confidence index for each route, transport modes and nodal links. Fuente and Lozano [3] use cluster analysis to determine the number of warehouse and location. Cluster analysis is a statistical method which identifies groups of samples that show similar characteristics. They located warehouses by zone assuming that all the warehouses within a zone are equally belonging to the zone. They also assume that resulting warehouse should have sufficient capacity to meet the demands of the group of towns and cities that it supplies. In order to perform the zone search, they calculate distances between different towns and cities on a square distance matrix and reducing the order of the matrix. However there are limitations to their study which are supply chain performance was not considered at all. Cluster analysis also has limitations that it is appropriate for determining groups of samples that behave similarly but in their study the demand of the groups of towns and cities are totally different in nature. For example, in rural area people might have higher demand of product A than product B but in urban area people might have higher demand of product B than product A. Therefore, the objective of this research is to measure the performance of supply chain focusing on distribution channel and warehouse system.
2. Body of Paper This research was divided into two parts. First was to interview the managers from various manufacturing firms with questionnaire which based on Supply Chain Operations Reference (SCOR) model. These firms are three firms from foam packaging industry and other three firms from computer industry. Lastly field observation was also conducted to provide the details of business processes of such firms. The questionnaire consists of four sections. Section I focuses on e-logistics and supply chain management. Section II focuses on e-logistics and supply chain performance. Section III focuses on supply chain management. Section IV focuses on supply chain performance. Instruction This questionnaire has four sections. Please tick or fill in the blank as appropriate. I greatly appreciate your cooperation. Thank you very much. Section I: E-logistics and supply chain management Please tick or fill in the blank as appropriate Part I: General profile 1. How do you distribute your products to customer? 2. What kind of problems do you have with your distribution system? And how do you intend to solve these problems? 3. How do you mange your e-warehouse system? 4. What kind of problems do you have with your e-warehouse system? And how do you intend to solve these problems? 5. How do you manage your logistics cost? 6. How do you manage your inventory? 7. What kind of problems do you have with your inventory system? And how do you intend to solve these problems? 8. Numbers of permanent employees.. 9. Numbers of temporary employees.. 10. Numbers of outsource 11. ISO certified 11.1 Level. (For example: 9000, 9002, 14000) 11.2 Process.. (For example: production, service) 12. Major business of company (If appropriate, please tick more than one) 12.1 Maker:...... 12.2 Supplier to maker Tier 1:... 12.3 Supplier to maker Tier 2:... 12.4 Supplier to maker Tier 3:... Figure 1: Examples of Questionnaire
Section II: E-logistics and supply chain performance Strongly Disagree Neutral Agree Strongly agree Not applicable disagree 1 2 3 4 5 6 1. Company has a customer satisfaction assessment system 2. Company representative often visits its customers to build a good relationship with them 3. Company can solve problems of returned product from customer 4. Company has a transport management system 5. Company has a record of performance of running machine 6. Company has a system for indicating inventory level 7. Supplier always deliver raw materials as ordered 8. Company uses forecasting data for production planning 9. Company has account for transporting product to customer within supply chain 10. Company is aware of lead time in each unit within supply chain 11. Company has a system for assessing holding costs of inventory 12. Machine is maintained as planned 13. Company has a system to assess and select supplier 14. Company can operate its production according to production plan 15. Company has a system for controlling level of work in process 16. Company reconsiders cycle time of production process 17. Supplier can easily adjust delivery schedule of raw materials 18. Company always receives raw materials from supplier correctly 19. Supplier can deliver raw materials on time 20. Company can quickly check quantity of raw materials 21. Company can quickly transport raw materials from receiving area to warehouse 22. Company has a team for ordering and receiving raw materials 23. Company has a system for analyzing production costs 24. Inventory is stored in warehouse not more than expecting date 25. Warehousing system can be adjusted all the time 26. Product is developed according to customer s needs 27. A whole process from ordering raw materials to deliver product to customer is on time 28. Products are quickly located in warehouse 29. Raw materials are sufficient for production 30. Company can deliver product to customer before due date if customer requests 31. Company has an account for returned product process Section III: Supply chain management Part I: Plan 1. Company has a team for strategic planning 2. The major functions in supply chain e.g. transportation, production, and warehousing are considered in planning 3. Customer priority is considered 4. Company has forecasting data for customer s needs 5. Company has an information system for managing customer s needs 6. Company uses previous data to improve forecasting 7. Forecasting data of each product is often adjusted 8. Forecasting data of each customer is often adjusted 9. Customer s recommendation is strongly considered when managing customer s needs 10. Forecasting is strongly accuracy 11. Company uses data from sales, production, and marketing to improve forecasting 12. Decision making in planning process is well Figure 1: Examples of Questionnaire (Cont.)
Section IV: Supply chain performance Part I: Company performance 1. Company can distribute product to meet target group 2. Company can make adjustment in new deals about distribution channel to cope with changing circumstances 3. Company can make adjustment in new deals about distribution channel in responses to customer s requests 4. Company can make adjustment in new deals about distribution channel to maintain good relationship with target customer 5. Distribution channel strategy can save time in distributing product to market 6. Company can distribute product to meet target customer faster than competitors 7. Distribution channel strategy can save administrative expenses in distributing product to market 8. Company can make adjustment in new deals about distribution channel to cope with changing circumstances better than competitors 9. Company can make adjustment in new deals about distribution channel in responses to customer s requests better than competitors 10. Company can make adjustment in new deals about distribution channel to maintain good relationship with target customer better than competitors 11. Distribution channel strategy can save time in distributing product to market better than competitors 12. Distribution channel strategy can save administrative expenses in distributing product to market better than competitors 13. Customer is very satisfied with your company Part II: Location of warehouse Warehouse 1 City.Country... Warehouse 2 City.Country... Warehouse 3 City.Country... Warehouse 4 City.Country... Warehouse 5 City.Country... 3. Conclusion The supply chain performance of various manufacturing firms were measured as follows, however regarding the competitive reasons, the companies names will not be published. Therefore symbol will be used to represent companies, for example, company A and company B. Figure 1: Examples of Questionnaire (Cont.) Table 1: The Supply Chain Performance of Three Firms from Foam Packaging Industry Company A Company B Company C Plan 61.11% 60.52% 59.73% Source 52.65% 53.45% 55.10% Make 62.56% 64.49% 63.15% Deliver 58.45% 60.17% 57.95% Table 2: The Supply Chain Performance of Three Firms from Computer Industry Company A Company B Company C Plan 60.88% 62.15% 60.50% Source 53.55% 51.05% 54.13% Make 66.05% 63.67% 68.97% Deliver 61.13% 62.25% 64.42%
From Table I, in foam packaging industry, company A has highest performance on plan process while company B has highest performance on both make and deliver processes. Company C has highest performance on source process. From Table II, in computer industry, company B has highest performance on plan process while company C has highest performance on source, make and deliver processes. References [1] V. V. Thai, Selecting the location of distribution centre in logistics operations: A conceptual framework and case study, Asia Pacific Journal of Marketing and Logistics, 17(3), 2005, 3-24. [2] D. McKnight, Site selection: you need a plan, Warehousing Management, 5(6), 1998, 54-57. [3] D. Fuente and J. Lozano, Determining warehouse number and location in Spain by cluster analysis, International Journal of Physical Distribution & Logistics Management, 28(1), 1998, 68-79. [4] R. Banomyong and A. K. C. Beresford, Multimodal transport: the case of Laotian garment exporters, International Journal of Physical Distribution & Logistics Management, 31(9), 2001, 663-685. [5] G. L. Boerne, An examination of the influences on the change of freight transport mode (Department of Maritime Studies and International Transport, UWCC, Cardiff, 1990). [6] A. K. C. Beresford and R. C. Dubey, Handbook on the management and operations of dry ports (UNCTAD, RDP/LDC/7, Geneva, 1990).