Impacts of using a performance measurement system in supply chain management: a case study

Abstract

The study examines how the utilisation of a new performance measurement system (PMS) influences supply chain management (SCM) and what kind of impacts the new system has on the performance of the supply chain. The paper utilises a longitudinal research setting where the data was gathered in two semi-structured interview studies after an action research project in which a new measurement system was designed and developed. The findings show how a PMS serves as a catalyst of inter-organisational knowledge transfer and promotes shared learning. The results also show how knowledge transfer and shared learning led to improved performance of the supply chain. The paper contributes by opening up the practical mechanisms through which performance measurement provides value for SCM and by showing how inter-organisational transfer of performance information catalyses learning and performance improvement. The paper looks beyond the design of performance measures and provides a view on the practice of supply chain performance management. The paper illustrates how sharing performance information amongst supply chain companies improves managers’ awareness of shared targets and the status of network operations. This also resulted in improved performance in the studied case network. Overall, the results encourage organisations to engage in network-level performance measurement and share performance information with their network partners.