“Measuring the unmeasurable” ‐ measuring and improving performance in the supply chain

Abstract

The supply chain concept fundamentally changes the nature of organizations; control is no longer based on direct ownership and control, but rather based on integration across interfaces between functions and companies. This has consequences for the measurement of performance. Traditional measurement approaches may have to be abolished and a supply chain measurement system developed. Traditional performance measures may limit the possibilities to optimize supply chains as management does not “see” supply chain wide areas for improvement. This note raises issues critical to measuring supply chain performance. A new measurement approach should lead the way for supply chain competitiveness and should direct management attention to areas for supply chain optimization. A preliminary framework for measuring unmeasurable performance is developed.