Models for evaluating and improving delivery performance play an important role in the management of supply chains. A review of supply chain delivery models that use Six Sigma methodologies indicate that the models are limited to only make-to-order supply chains where improvement in delivery performance occurs at a fixed (static) point in time. In this chapter, the authors present a generalized delivery performance model that overcomes these limitations. The model presented here can be used to measure delivery performance in both make-to-order and make-to-stock supply chains and supports improvement in delivery performance over a planned time horizon with definable milestones for attaining targeted levels of improvement. Numerical illustrations of the model are presented.
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In reaction to today’s globally competitive business environment, organizations face challenges to improve customer service while simultaneously reducing costs and shortening product lifecycles. In response to these challenges many organizations have adopted the supply chain management (SCM) philosophy. Under the SCM philosophy, processes such as production planning and inventory control, sourcing, vendor relations and customer relationship management are viewed as value adding activities requiring coordination and integration among functional areas that are both internal and external to the organization. The positive impact of the SCM philosophy on firm performance has been empirically established in the literature (Beheshti, Oghazi, Mostaghel, & Hultman, 2014; Leuschner, Rogers, & Charvet, 2013; Huo, 2012; Wagner, Grosse-Ruyken, & Erhun, 2012; Shi & Yu, 2012; Johnson & Templar, 2011; Kim, 2009).
As discussed in Ramaa, Subramanya, and Rangaswamy (2013), Martin and Patterson (2009), Shepherd and Günter (2006) and Gunasekaran, Patel, and McGaughey (2004), performance measurement plays an integral role in the SCM philosophy. Performance measurements assist managers in meeting short term day-to-day objectives as well as long term strategic goals. For effective performance measurement, formal quantitative models for performance measurement are needed that are capable of incorporating a wide range of factors (Suwignjo, Bititci, & Carrie 2000; Bititci, Suwignjo, & Carrie, 2001). Frameworks for supply chain performance evaluation may be found in Cuthbertson and Piotrowicz (2011), Azevedo, Carvalho, and Cruz-Machado (2011) and Chan, Chan, and Qi (2006) while specific metrics for use in measuring supply chain performance are found in Gopal and Thakkar (2012), Sambasivan, Mohamed, and Nanden (2009) and Gunasekaran and Kobe (2007).