Classification and measurement of efficiency and congestion of supply chains

Abstract

In order to enhance and extend the variation of date envelopment analysis (DEA) methodology, this chapter serves to supplement the DEA literature in its application to supply chain efficiency measurement. In addition an examination of input congestion is carried out indicates that a managerial inefficiency exist in the different process cycles of supply chains. However, presence of congestion indicates the inability to dispose of unwanted inputs without incurring cost. Using the DEA variation, supply chains are partitioned into three levels/stratums namely 'best-in-class', 'average' and 'laggard'. Substantial performance inefficiency is uncovered in the four process cycle dimensions. Relatively, down-stream process cycles of the supply chain exhibit better performance than the up-stream process cycles. Our innovative approach identifies areas for improved supply chain performance over the four process cycles. The classification of supply chains serve as a guideline for best practices, and projects directly to the best-in-class. © 2011 Springer Science+Business Media B.V.