Conceptual Model of Performance Measurement for Supply Chain Management: Value-Based Scorecard Approach

Abstract

This paper offers an integrative view of value-based management (VBM) and the balanced scorecard (BSC) and supply chain management (SCM). The work answers two research questions. First, what do I measure? By presenting a conceptual model for SCM value-based scorecard consists of sequential steps with the outcomes for each step leading to naturally to the next step. In developing the model, various aspects of SC value added strategy could be expected to affect the specific mix of measures used and structural changes of balanced scorecard perspectives to fit the needs of value-based SCM. Second, how do I implement SCM value-based scorecard? By using a pyramid performance management model as a tool that can lead to the actual application of SCM value-based scorecard approach. The study uses a case-oriented example to analyze the causal relationships between the levers of the hierarchy of SCM value-based scorecard. The proposed approach in this study is called the design-oriented approach in management control literature. It is useful for all SC members to make out value-based scorecard based on strategic themes from the view of the total supply chain because each member can know how it can contribute to the total value of supply chain.