Supply Chain
A supply chain consists of all parties directly or indirectly involved in the implementation of a customer's request (Chopra and Meindl, 2007). The boundaries of the supply chain cover almost every actor and/or functions that occur within a chain. Participants, including suppliers, manufacturers, warehouses, traders, transporters and even customers are connected by information, material and financial flows. The actions and functions within a supply chain for a manufacturing organization include, but not limited to, new product development, purchasing, storage, marketing, management of the operations, financial problems of the chain, distribution and supply of products, customer services and etc. In respect to these functions and activities the main objective of the chain is to receive and fulfill the customer request.
There are various definitions of supply chain available in the literature. Christopher (2005, p. 17) defines the supply chain as a “…network of organizations that are involved, through upstream and downstream linkages, in the different processes and activities that produce value in the form of products and services in the hands of the ultimate consumer”.
Each of the participants in the supply chain may consist of several elements. For example, manufacturers may have various warehouses, manufacturing plants and distribution facilities in different areas (or even countries), as shown in Figure 1 (Hübner, 2007).
Figure 1. Global supply chain network (Hübner, 2007)
In recent years, researchers and practitioners have focused on organizational performance measurement and indicators much more than before. Supply chain performance reflects the organization's competitiveness and ability to provide value to customers, especially in the amount of availability and delivery of products or services in time (responsiveness).
The role of these measures and metrics for organizational success cannot be overstated. They affect strategic, tactical and operational planning and control. Performance measurements and metrics have an important role in setting objectives, performance evaluation, and determine future courses of action (Gunasekaran and McGaughey, 2004).
Supply chain introduces a new concept, a chain of activities and processes to meet the needs of the end customer who has changed the management of the organization in many aspects, including strategic and operational level.
Having changed company strategies, supply chain management has affected the way manufacturing and service companies meet the needs of their customers. As an exclusive strategic discipline, supply chain must be managed and improved to perform effectively and efficiently. One must have a clear understanding of the current chain and how it operates before starting any improvement actions. Therefore, analysis of processes and functions of the chain are needed. In other words, we need to measure how the supply chain performs. Tools, frameworks and methods are needed for modeling and performance evaluation of the supply chain.