Supply chain performance measurement with analytic hierarchy process

Supply chain is a major and important element of competitive strategy to improve efficiency and profitability of an organization. A wide range of literature regarding supply chain management can be easily accessed and in recent years, much attention has been given to supply chain performance measurement. Performance measurement is important as it allows companies to monitor their operating performance. In modern manufacturing business management, performance measurement stretches beyond quantification and accounting of metric and is now expected to provide necessary information for management feedback for the key decision makers for them to make realistic goals and pointing directions for improvement. Various tools and methodologies have been applied to measure supply chain performance, however this is no complete discussion on each performance measure. Also, there are insufficient case studies to support the performance measures suggested. This report presents a framework of both quantitative and qualitative performance measurements that are used to measure supply chain performance. On top of measures commonly used such as cost and quality, one particular measure is included – eco-friendliness. Multi-criteria decision making tool, Analytic Hierarchy Process (AHP) is used to make decisions based on pair-wise comparisons of the performance measures. Performance measures suggested in this report are applied to case study of a manufacturing company, in particular maximizing supplier selection to improve supply chain performance. In order to facilitate the application of performance measures, Expert Choice software written based on AHP is chosen to analyze and synthesis results for efficiency. This report outlines the selection and application of supply chain performance measures and the case study is included in hope to convince and stimulate more interest in this important area.Bachelor of Engineering (Mechanical Engineering