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LEAN SUPPLY CHAIN PERFORMANCE EVALUATION METHOD

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 LEAN SUPPLY CHAIN PERFORMANCE EVALUATION METHOD
Kazi Arif-Uz-Zaman, Science & Engineering Faculty, Queensland University of Science &
Technology, 2 George Street, Brisbane, QLD 4000, 0410 754 732, [email protected]
Azharul Karim, Science & Engineering Faculty, Queensland University of Science &
Technology, 2 George Street, Brisbane, QLD 4000, +61 7 313868790,
[email protected]
Paul Hyland, School of Business, Queensland University of Science & Technology, 2 George
Street, Brisbane, QLD 4000, +61 7 31384260, [email protected]

ABSTRACT
Increasing global competitiveness has forced manufacturing organizations to produce high-
quality products quickly and at competitive prices which can only be achieved thorough
continuous improvements techniques. In this paper, we propose a fuzzy based performance
evaluation method for lean supply chain. To understand the overall performance of cost
competitive supply chain, we investigate the alignment of market strategy and position of the
supply chain. Competitive strategies can be achieved by using a different weight calculation
for different supply chain situations. By identifying optimal performance metrics and
applying performance evaluation methods, managers can predict the overall supply chain
performance under lean strategy.

Keywords: Supply chain metrics, Lean supply chain, Fuzzy based evaluation method.

INTRODUCTION

In the era of globalisation, supply chains are being treated as extended enterprises linking
firms in different locations and enabling partners to gain competitive advantage. In recent
years, firms have realised the potential of effective supply chain management (SCM) in the
management of day-to-day operations. However, many firms fail to develop effective
performance measures and the metrics needed to achieve integrated SCM. Measuring supply
chain performance can facilitate a better understanding of supply chain activity, positively
influence supply  chain  players’  behaviour  and  improve its overall performance [1]. In order
to achieve the supply chain goal of fulfilling customer orders more quickly and efficiently
than competitors, a supply chain needs to engage in continuous improvement processes and
competitive strategies. So, to understand how supply chains compete, it is necessary to
understand the overall performance of the supply chain.

Another important characteristic regarding supply chain measures is the strategic fit between
competitive performance and supply chain strategy. Soni and Kodali [2] found that the choice
of competitive supply chain strategy impacted business and supply chain performance and
they claimed that the strategic fit considering the degree of alignment between competitive
situation, strategy, organisational culture and leadership can enhance business performance.
As such, to achieve effective performance measures the competitive performance of a supply
chain must be aligned with the market strategy and position of supply chain actors.

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Lean philosophy is one of many initiatives that businesses around the world have been
adopting in order to remain competitive in the increasingly global market [3-4]. The core
thrust of a lean supply chain is to create a streamlined, highly efficient system that produces
finished products at the pace customers demand with little or no waste [5]. Lean is applicable
in many supply chains, particularly those seeking to improve performance by reducing waste.
For example, cost competitive supply chains can benefit from utilising lean to remove waste
and reduce costs.

Given the inherent complexity of supply chain measures, market competitiveness and supply
chain strategy, a measurement method to deal with these complexities is critical.
Gunasekaran and Kobu [6] stated that conventional measures (such as: profit, percentage of
products delivered on time etc.) had the drawbacks of tending to measure financial metrics,
and failed to include intangible and lagging indicators. In this case, fuzzy is an appropriate
modelling method to deal with intangible and qualitative measures which uses fuzzy set
theory and linguistic values and has been applied widely in various areas of SCM. In
literature, several studies (e.g., [7-8]) have reported findings regarding supply chain
performance measurement using fuzzy set theory, fuzzy logic and multiple linguistic terms
with combinations of other methods. Fuzzy modelling also allows a significant number of
performance metrics to be considered across multiple elements and processes of a supply
chain. As such, a complete framework for performance measures and a fuzzy based
performance evaluation method for overall supply chain measurement is essential to address
these challenges.

In spite of the vast research published on supply chain measures, the concept of performance
metrics and measures is still underdeveloped for two reasons: a) a lack of strategic alignment
between competitive strategy and performance metrics while measuring cost competitive
supply chain performance [9-11] and (b) deficiencies in considering uncertainty and
linguistic terms in performance evaluation methods, especially for lean supply chain.
Therefore, the research problem addressed in this paper is the need to develop the linkages
between supply chain performance measures with competitive strategy, implementation of
lean tools, market position and an evaluation method to assess lean attributes and competitive
supply chain strategies.

LITERATURE REVIEW

Performance measurement and metrics in SCM

Neely et al. (1995) define performance measurement as the process of quantifying the
effectiveness and efficiency of action where measurement is the process of quantification and
action leads to performance [11]. Performance measurement systems (PMS) are described as
the overall set of metrics used to quantify both the efficiency and effectiveness of action [10].
Beamon [12] identified four characteristics for an effective performance measurement
system: inclusiveness, universality, measurability and consistency. The purpose of measuring
organisational performance is to (a) identify success; (b) identify whether customer needs are
met; (c) help the organisation to understand its processes and to confirm what they know or
reveal what they do not know; (d) identify where problems, bottlenecks, waste, etc. exist and
where improvements are necessary; (e) ensure decisions are based on facts and not on
supposition, emotion, faith or intuition; and (f) show if planned improvements actually
happened [6]. A PMS consists of a number of individual performance measures or metrics.
The main challenge is to identify the key performance measures for value-adding areas of an

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organisation and then the factors that will affect the core business processes that create value.
Despite the extensive literatures, research has yet to address a number of important
limitations:

1. Lack of strategic focus (the measurement system is not well aligned with strategic
goals, organisation culture or reward systems) [13-14].
2. Lack of systematic approach to prioritise measures and metrics [15-16].
3. How to maintain PMS over time so they remain aligned with dynamic environments
and changing strategies? [11][14].

Supply chain performance relates to competitive strategies since competitiveness in the

supply chain must be linked to organisational goals. Whereas, Hanson et al. [17] viewed PMS
as a process with dual functions: communicating strategies and controlling performance. A
company’s  competitive  strategy  defines, relative to its competitors, the set of customer needs
that it seeks to satisfy through its products and services [2]. So, a competitive strategy is the
basis for defining business goals. Competitive strategies can be categorised into: cost, quality,
delivery and flexibility [2] [18]. These competitive strategies need to be aligned with the
supply chain performance measurement system to fulfil organisational goals. To understand
therefore how competitive a supply chain is, it is necessary to understand the overall
performance of the supply chain.

In recent times researchers such as Gunasekaran et al. [9] and Neely et al. [10] have
attempted to respond to these arguments by designing systemic and balanced performance
measurement systems or a flexibility measurement approach [12]. Perhaps the most well
accepted of these is the supply chain operations reference (SCOR) model. This was
developed by the Supply Chain Council in 1997 and has been   described   as   a   “systematic  
approach  for  identifying,  evaluating  and  monitoring  supply  chain  performance”  [11]. SCOR
combines elements of business process engineering, benchmarking and leading practices into
a single framework. Utilizing SCOR, SCM is defined as a set of integrated processes: Plan,
Source, Make, Deliver, and Return—from the supplier’s supplier to the customer’s customer,
and all are aligned with   a   company’s   operational   strategy, material, work and information
flows (see Figure 1).

Figure 1 Supply chain operation reference model [37].

Despite all the attempts regarding PMS using SCOR frameworks for SCM, research is yet to
address a critical issue to unravel the:

“Lack of integration in between performance measurement systems with human

resource management (HRM) and modern manufacturing practices such as total

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 quality management, business process re-engineering, just-in-time, or new
information technologies” [11].

The necessity for competitive performance of a supply chain and the alignment with market
strategy are argued here. The above discussions lead to a suggestion that a current study is
needed to establish a framework of metrics and performance measures which can be
integrated with competitive strategies as well as modern manufacturing practices. So, the
effects of modern improvement practices on performance metrics need to be addressed to
incorporate the synchronisation with a company’s   strategic   objectives and PMS. Cost
competitive supply chains such as lean supply chains and other improvement techniques are
discussed in the next section and linked to synchronisation.

Lean supply chain, improvement tools and techniques

In an increasingly competitive global environment, businesses have introduced approaches

such as total quality management (TQM), Just in Time (JIT), business process reengineering
(BPR) and SCM to enhance their performance and gain competitive advantage [2].
Researchers believe that tools for measuring an organisation’s  need  and  ability  to  develop  an  
agile business strategy within the context of a virtual organisation are important. The term
“Lean”  means  a  series  of  activities  or  solutions to eliminate waste, reduce Non-Value Added
(NVA) operations, and improve the Value Added (VA) process. A lean supply chain means
the identification of all types of waste in the value stream of a supply chain and taking steps
to eliminate them and minimise lead times [19-20].

The concept of lean has had significant positive impacts on productivity in various industries.
The SCOR model is a process reference model and can be used with standard metrics to
measure process performance and management practices that produce best-in-class
performance. In this research SCOR is the base model used to identify the optimal metrics to
evaluate supply chain leanness and, for this reason, the effects of different lean tools and
techniques over five basic processes of the SCOR model are listed in Figure 2.

Plan Source Make Delivery Return

b
VSM

a,g a a,c,g a a,d

FMS , CIM , SMED , RFID, GT , CM

f h h
5S , TPM , HRM

a a b c,d d,e,h e,f

MRP , MRP-II, BOM , MTM EOQ , TQM , Pull system

a,d,f,g,h a a a
JIT , JIT-2 , Kaizen, ERP , EDI

VSM — Value stream mapping; MRP — Material requirement planning; BOM — Bill of material; MTM — Method time measurement;
FMS — Flexible manufacturing planning; CIM — Computer integrated Manufacturing; SMED — Single minute exchange of die; RFID —
Radio frequency integrated device; GT — Group technology; CM- Cellular manufacturing; TQM — Total quality management; JIT — Just
in time; JIT-2 — Supplier-customer relationship; MRP-II — Manufacturing resource planning; EDI — Electronic data interchange; EOQ
— Economic order quantity; TPM — Total productive maintenance; HRM — Human resource management.

a- Gunasekaran et al. [22]; b- Kuhlang et al. (2011); c- Ramasamy [23]; d- Fullerton and Wempe [24]; e- Eroglu and Hofer [25]; f- Wan
[26]; g- Kojima and Kaplinsky [27]; h- Shah and Ward [5]

Figure 2 Effects of different lean supply chain tools and techniques over SCOR model.

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In Figure 2, we outline the effects of various lean tools over different supply chain tiers with
corresponding author references. Most of the authors tried to discover the possible effects of
lean tools over SCOR processes. For example, Kuhlang et al. [21] mentioned that Value
Stream Mapping (VSM) had an effect on the plan stage by increasing productivity and
reducing lead times. Similarly, other lean tools and their effects over different SCOR
processes are shown in Figure 2 and analysed later since the analysis of the effects of lean
tools over performance metrics is noteworthy to design the optimal metrics for lean supply
chain study. It therefore becomes apparent that the benefits of lean tools can be measured
using supply chain performance metrics and can also be used based on different supply chain
strategies. Lean is applicable in many supply chains, particularly those seeking to improve
performance by reducing waste. For example, cost competitive supply chains can benefit
from utilising lean to remove waste and reduce costs. The lean supply chain can mitigate the
lack of co-ordination between performance measures and lean tools and techniques.

From literature, it is evident that overall supply chain performance is dependent on number of
supply chain contexts, contents and processes. The relation between these major factors and
supply chain performance is proposed in Figure 3.

Lean Tools and H1

Techniques
H2 Supply Chain
Competitive Performance
Strategy
H3
Market Position

Figure 3 Theoretical framework of the research

The above discussion suggests for further examination of relations between competitive
strategies, lean tools and techniques, market positions and supply chain performance (SCP).
To identify the relations, it is thus important to investigate the following hypothesises for cost
competitive supply chain:
Hypothesis 1: Implementation of lean tools and techniques influence SCP.
Hypothesis 2: A  supply  chain’s  choice  of  competitive  strategy influences SCP.
Hypothesis 3: Market position positively affects SCP.

Performance metrics have both quantitative and qualitative measures. Qualitative metrics
have linguistic behaviours and also include non- financial measures. Fuzzy is an appropriate
method when uncertainty is present and it allows modelling of a significant number of
performance metrics across multiple elements and processes of a supply chain. The effects of
lean tools and techniques over these metrics have been discussed previously and will be
quantified in the next section using fuzzy based performance evaluation method. The
competitive strategies for different product and process based supply chains will also be used
by applying different relative weights for performance categories. So the combined effect of

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different   lean   tools   and   competitive   strategies   over   a   supply   chain’s   performance   will   be  
evaluated by the proposed performance measurement method.

PROPOSED PERFORMANCE EVALUATION METHOD

Select supply chain optimal metrics

For effective performance evaluation, measurement goals must represent organisational goals
and the metrics selected should reflect a balance between financial and non-financial
measures that can be related to strategic, tactical and operational levels of decision making
and control [9]. It is important to reduce many of the established performance metrics to a
relatively low number that are more effective for performance evaluation.

1. Purchase order cycle 1. Production time

1. Profit/piece ($) time (days) / piece (mins) 1. Price/piece ($)

2. Cost of goods 2. Suppliers defect 2. Overhead cost 2. Customer

sold/piece ($) free delivery (%) / piece ($) 1. Total logistic cost ($) satisfaction

Plan Source Make Delivery Return

Performance Performance Performance Performance Performance

1. Accuracy of forecasting 1. Mutual assistance in 1. Manufacturing cost 1. Delivery lead time 1. Buyer- manufacturer

Techniques (%) Solving problems 2. Effectiveness of master (days) relationship level

2. Total cycle time (days) production schedule 2. Ability to response 2. Quality of delivered

3. Production efficiency/line (%) /line / day (%) demand goods

Non lean metrics (Italic)

Lean metrics (Normal)

Figure 4 Optimal metrics for cost competitive supply chain performance evaluation.

We propose a list of optimal metrics (see Figure 4) to evaluate the performance of cost
competitive supply chain and all the metrics are selected based on existing research (e.g.,
[11][22]). Shepherd and Günter [11] provided a taxonomy of performance measures (in terms
of cost, time, quality, flexibility and innovativeness) using the five SCOR processes.
Gunasekaran et al. [9] used the same processes and developed supply chain measures at
strategic, tactical and operational levels of framework. In this research, the metrics are
grouped according to different processes of SCOR model to calculate individual
performances at the process level as well as overall supply chain performance.

The proposed optimal metrics have both crisp and linguistic values. Since, fuzzy allows
modelling of a significant number of performance metrics across multiple elements and
processes of a supply chain, we initially convert the quantitative metric values into triangular
fuzzy numbers and linguistic terms are used for qualitative metrics. Converting both the
metric values into fuzzy numbers, then the fuzzy TOPSIS is used to evaluate the performance

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of whole supply chain by considering the distance of non- lean and lean supply chain
situations from positive and negative ideal solutions. The details of fuzzy set theory,
triangular fuzzy number generation and fuzzy TOPSIS method will be discussed in the
following sections.

Fuzzy set theory

Fuzzy set theory was first proposed by Zadeh [28] and was first used in control by Mamdani
[29]. Fuzzy set theory is primarily concerned with quantifying and reasoning using natural
language in which many words have ambiguous meanings. Formally, the process by which
individuals from a universal set X are determined to be either members or non-members of a
crisp set can be defined by a characteristic or discrimination function. For a given crisp set A,
this function assigns a value to every such that,

Where X refers to the universal set defined in a specific problem, and [0, l] denotes the
interval of real numbers from 0 to 1, inclusively.

Figure 5 Triangular fuzzy number, A

Convert metric values into triangular fuzzy number

In this step, we need to convert all the metric values into triangular fuzzy numbers. Initially,
different values for each of the metric are to be collected for before and after lean
implementation. Let assume, are different supply chain situations (before and
after lean implementation); are different supply chain performance categories
and are different optimal metrics which means, ;
;K . Now assume, are different
values of d number of units (per week) for metric under situation and category . Here
process cycle time, time, after lean implementation. In the next two sub-
sections, the quantitative and qualitative triangular fuzzy number conversion from
performance metrics values will be discussed. The overall conversion algorithm [30] from
metric values to triangular fuzzy numbers is discussed below and sketched in Figure 6.

Triangular fuzzy number for quantitative metric values

The values of quantitative metrics need to be collected from supplier, manufacturer,

distributer as well as customers. Since we assumed, are
’
different values of d number of units for metric under situation and criteria , these
values are converted into quantitative fuzzy linguistic number and membership values
applying the following model algorithm:

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 Different metric values,

Find the difference between

adjacent values,

Yes No

Take ) Take 0

Find the similarity between

adjacent values,

Find the fuzzy boundary points

Find the central vertex point, by interpolations

Determine the triangular

fuzzy number,

Figure 6 Model algorithms to determine the triangular fuzzy number from metric values.

Triangular fuzzy number for qualitative metric values

For qualitative metrics, we use multiple triangular fuzzy linguistic terms and corresponding
triangular fuzzy numbers. Here the linguistic terms are defined by two unit interval of linear
triangular membership functions by fuzzy set ( , , ) as listed in Table 1,
where , and represent three point of triangular fuzzy number against
corresponding linguistic terms for qualitative metrics .

VL L M H VH
1

0
1 3 5 7 9
Figure 7 Triangular fuzzy numbers for corresponding linguistic terms.

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 Table 1 Linguistic terms and corresponding triangular numbers for qualitative metrics

Linguistic Terms Triangular Fuzzy number

( , , )
Very Low (VL) (1, 1, 3)
Low (L) (1, 3, 5)
Medium (M) (3, 5, 7)
High (H) (5, 7, 9)
Very High (VH) (7, 9, 9)

The generated triangular fuzzy numbers will be used in Fuzzy TOPSIS method to evaluate
the performance of different supply chain situations by measuring their distances from
positive and negative ideal solutions.

Fuzzy TOPSIS

TOPSIS is a multi criteria decision making (MCDM) method to identify solutions from a
finite set of alternatives [31]. The logic of fuzzy TOPSIS is proposed by Hwang and Yoon
[32] is to define the positive ideal solution and negative ideal solution. The positive ideal
solution is the solution that maximizes the benefit metrics and minimizes the cost metrics,
whereas the negative ideal solution is the solution that maximizes the cost metrics and
minimizes the benefit metrics. The best alternative is the one which has the shortest distance
from the positive ideal solution and the farthest distance from the negative ideal solution. The
step-by-step fuzzy TOPSIS method to identify best solution is developed which is based on
the works of several researchers [31] [33-36] and discussed below:

Normalize triangular fuzzy number

Beside quantitative and qualitative metrics, there are also two important type of metrics,
called, benefit and cost metrics. Benefit means the more the better where cost means the less
the better. If the metrics are not normalized, they cannot be compared to each other to find
out the supply chain performance. The corresponding normalization methods are as follows:
and (benefit metrics) (1)

and (cost metrics) (2)

Prioritize competitive strategy over metric category

Considering different competitive strategy and company objective towards better customer
service, we use relative importance to performance categories. For this reason, we take the
relative weight vector for performance category which is defined as,

(3)

Where, = number of weight vector for metric category,

and =1, where,

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Compute weighted normalized fuzzy value

The weighted normalized fuzzy value for optimal metrics is computed by

multiplying the competitive priority weights ( ) of metric category with the normalized
triangular fuzzy numbers ( ) as,

(4)

Where, = number of weighted fuzzy numbers

Identify fuzzy positive ideal solution (FPIS) and fuzzy negative ideal solution (FNIS)

Since, the weighted normalized fuzzy value ) is calculated, now the FPIS and FNIS
can be computed by following equations,

(5)

(6)

Where, , are FPIS and FNIS for performance metrics

Calculate the distance of non- lean and lean supply chain situations from FPIS and
FNIS

The distance ( , of supply chain situations (before and after lean implementation)
from FPIS and FNIS is calculated as,

(7)

(8)

Where, , are the distance measurements of supply chain situations from FPIS
and FNIS for performance metrics

Compute the closeness coefficients for each supply chain situation

The closeness coefficient ( ) represents the distances of supply chain situations to the
fuzzy positive ideal solutions ( ) and fuzzy negative ideal solutions ( ) simultaneously.
The value of for each supply chain situations is computed as,

(9)

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Calculate the performance of non- lean and lean supply chain

Since, closeness coefficient determines the distance of each supply chain situation between
FPIS and FNIS, it represents the value of close to FPIS and farthest to FNIS. So, the
performance value for supply chain situation (before and after lean implementation) can be
evaluated by,

(10)

A CASE EXAMPLE

We have selected for our case study SIGMA1 clothing (woven) manufacturing company to
evaluate supply chain performance as this supply chain implemented lean tools and
techniques. The organization was also selected as a convenience sample as management was
willing to provide relevant data. We  took  woven  pant  named  “Motion  Pant”  as  supply  chain  
study. In this supply chain, there are three piers of chain- buyer, manufacturer and suppliers.
Except   fabric   “Cordura”   supplies   (a   special   fabric),   other   accessories   (button,   zipper)   are  
stored in house by the manufacturers. We conducted this case study investigating buyer,
manufacturer   and   “Cordura”   fabric   supplier   as   the   sample   supply   chain   for   “Motion   Pant”.  
After product development, the average production time to produce one pant is anticipated as
102 minutes with $23.5 production cost. The order amount was 10,00000 pieces and started
to feed in 6 production lines from mid of January, 2011.We selected this supply chain to
evaluate lean performance. As we mentioned earlier, cost competitive or lean supply chain
had four major performance categories- cost, time, quality and flexibility where most of the
metrics were cost related.

Table 2 “Motion  Pant”  supply  chain  measured  metrics  and  categories

Metric
Performance Id ( Performance Data source/
Metric Type
Categories Metrics (Units) departments
)
Finance and
Profit/ piece ($) Quantitative/Benefit
commercial
Production efficiency/
Quantitative/Benefit Industrial Engineering
line/day (%)
Effectiveness of master
production schedule/ Quantitative/Benefit Industrial Engineering
line/day (%)
cost of goods sold/ Finance and
Quantitative/ Cost
piece ($) commercial
Cost Manufacturing cost/ Finance and
Quantitative/ Cost
piece ($) commercial
Overhead cost/ Piece Finance and
Quantitative/Cost
($) commercial
Total logistic cost/ Logistics and supply
Quantitative/Cost
21900 pieces ($) chain
Price/piece ($) Quantitative/Cost Merchandising
Mutual assistance in
Qualitative /Cost Industrial Engineering
problem solving ($)
Total cycle time/21900
Quantitative/Cost Industrial Engineering
pieces (days)
Purchase order cycle
Quantitative/Cost Sales
time (days)
Time
Production time/piece
Quantitative/Cost Industrial Engineering
(Minutes)
Delivery lead time/ Logistics and supply
Quantitative/Cost
21900 pieces (days) chain
Customer satisfaction Qualitative/Benefit Merchandising
Buyer- Suppliers
Qualitative/Benefit Sales
relationship level
Quality Quality of delivered
Quantitative/Benefit Merchandising
Goods (%)
Accuracy of
Qualitative/Benefit Planning and control
forecasting techniques
Suppliers defect free
Quantitative/Benefit Sales
delivery (%)
Flexibility
Ability to response
Qualitative/Benefit Finishing and quality
demand

1
For reasons of confidentiality, the name of the manufacturer cannot be disclosed. SIGMA is a pseudonym

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We selected nineteen performance metrics (see Figure 4) out of four performance categories
and nine of them were cost measures. All the metrics have shown in Table 2. The second
column shows metric id where, n=1 to 4 and t=1 to 19. Metrics can be of two types. One is
whether it can be measured by number (quantitative) or linguistic terms (qualitative); another
is the direction of improvement. Benefit metrics mean the more the better and cost metrics
mean the less the better. All the types of performance metrics are mentioned in fifth column
in Table 2. The last column in Table 2 shows the sources of all data presented used in this
research.

We collected and calculated different values for performance metrics in two supply chain
situations- before and after lean implementations. So, in our proposed model, i=1 to 2.
Initially, no lean tools and improvement techniques were applied but interestingly there were
improvements in quantitative metric values. But, at the beginning of April- 2011 (6-8
columns in Table 3), the metric values remained same without any significant improvements.

Table 3 Performance metrics values in two supply chain situations- before and after lean implementation

Metric Values
Before Lean implementation (i=1) After Lean implementation (i=2)
Performance
Metrics March-2011 Aril-2011 October-2011 November-2011

Week- Week- Week- Week- Week- Week- Week- Week- Week- Week- Week- Week- Week- Week-
01 02 03 04 01 02 03 01 02 03 04 01 02 03
Profit/ Piece ($) 18.49 18.491 18.509 18.553 18.651 18.647 18.65 18.784 18.889 18.91 18.952 18.98 19.008 19.04
Efficiency (%) 41 48 58 57 62 65 63 70 66 75 83 88 66 84
Effectiveness (%) 44.79 65.49 62.75 61.76 65.39 69.07 66.95 72.81 67.57 77.03 72.94 76.98 76.61 72.11
Cost of goods sold 19.536 19.5 19.418 19.422 19.419 19.307 19.22 19.203 19.163 19.219 19.121 19.094
19.552 19.55
($)
Manufacturing cost 19.7394 19.7022 19.617 19.622 19.618 19.503 19.46 19.443 19.401 19.409 19.31 19.282
19.756 19.7539
($)
OH cost ($) 0.204 0.2039 0.2034 0.2022 0.1994 0.1995 0.1994 0.1956 0.2407 0.24 0.2385 0.19 0.1892 0.188
Logistic cost ($) 20586 20584 20569 20530 20444 20448 20446 20328 20236 20218 20181 20156 20132 20104
Price ($) 23.5 23.497 23.481 23.437 23.339 23.343 23.34 23.206 23.101 23.08 23.038 23.01 22.982 22.95
Mutual assistance Very low (1, 1, 3) Medium (3, 5, 7)
Total Cycle time 220.28 220.44 219.54 219.61 218.96 199.93 204.35 192.4 198.98 198.4 191.19 190.42
225.66 223.32
(days)
Purchase order time 74.3 73.8 74.1 74.7 73.2 74.3 73.7 74.5 75.2 74.8 73.2 73.1
75 74.6
(days)
Production time 101.73 101.1 99.7 99.76 99.72 97.8 96.3 96 95.4 95 94.6 94
102 101.98
(minutes)
Delivery lead time 95.62 95.8 94.2 94.31 94.23 86.3 87.43 83.2 84.11 83.3 79.29 81.72
97.66 96.5
(days)
Customer High (5, 7, 9)
Medium (3, 5, 7)
satisfaction
Buyer- manufacturer
Very low (1, 1, 3) Medium (3, 5, 7)
relation
Quality of delivered 91 95 93 91 92 94 88 93 96 92 93 92
89 92
goods
Forecasting accuracy Medium (3, 5, 7) High (5, 7, 9)
Supplier defect free
95 98 92 93 99 91 92 94 91 95 97 91 93 94
delivery
Ability to response
Medium (3, 5, 7) Medium (3, 5, 7)
demand

After that, we examined the whole supply chain and applied different lean tools to improve
the values of performance metrics as well as the performance of supply chain. Weekly values
for different quantitative metrics are presented in Table 3. Since, we examined two supply
chain situations; here the values are also measured in two different situations. The values for
quantitative metrics are converted into triangular fuzzy numbers (TFN) using the algorithms
showed in Figure 6. Similarly, all the qualitative values are also collected and converted into
TFN using the values mentioned in Table 1. Finally, following the equations from (1) to (10),
the overall performance for lean and non- lean supply chain have been calculated as 50.81%
and 48.4%.

DISCUSSION & CONCLUSION

Since, a supply chain is an integrated process wherein raw materials are supplied, products
are manufactured, and then delivered to customers (via distribution, retail, or both), the
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complexity of the supply chain arises from the number of echelons in the chain and the
number of facilities in each echelon [12]. Considering this complexity of a typical supply
chain, selecting appropriate performance metrics and performance measurement model for
supply chain analysis is particularly critical. Initially the linkage between SCOR framework
and effects of different lean tools has been established. Fuzzy TOPSIS method is used to
evaluate the performance of supply chain and results show that performance for lean supply
chain is better than without lean. The results also show that, the effects of lean tools and
techniques have positive influence over supply chain performance. Similarly, supply chain
performance has positive effects on competitive strategy. By improving competitive
strategies throughout the entire supply chain, managers can improve the overall supply chain
performance. Moreover, managers can evaluate and predict the performance for lean supply
chain. Importantly this provides a method for measuring overall supply chain performance
rather than measuring the performance of individual business units. By understanding the
impact of an initiative such as lean on the overall performance of the supply chain managers
are able to make better informed decisions. Also but measuring total supply chain
performance managers are able to demonstrate to multiple supply chain members the
performance benefits of introducing improvements programs such as lean. By demonstrating
the overall benefit of such programs it can improve the adoption of improvement programs.
Fuzzy also be used to indicate which areas such as cost or quality will benefit from lean so
emphasizing more on cost and quality metrics as market qualifiers for the supply chain.

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