Dwi Adi Purnama, Didin Dwi Novianto, Nur Laily Haryanti

Measuring Supply Chain Performance and Developing Competitive Strategy on Small Medium Enterprise Craft Industry using SCOR-AHP Model

Introduction

Measuring supply chain performance and developing competitive strategy on small medium enterprise craft industry using scor-ahp model. Evaluate supply chain performance & develop competitive strategies for SME craft industries using SCOR-AHP. Identifies KPIs, suggests Kraljic Matrix, Six Sigma, and Lean for improvement.

Abstract

Small and medium enterprises (SMEs) require support to evolve into established organizations due to their strong flexibility to change. Nonetheless, numerous obstacles confront SMEs in their efforts to develop and compete. This study seeks to evaluate supply chain performance and the formulation of competitive strategies inside small and medium-sized enterprises (SMEs). This serves as an option for assessing supply chain performance while emphasizing the formulation of competitive strategies to enhance it, encompassing the management of material, information, and financial flows from both supply and demand perspectives. The evaluation of supply chain performance is conducted with the SCOR model, which relies on the identification of Key Performance Indicators (KPIs) derived from the outcomes of the SMEs business mapping process. Subsequently, multi-criteria decision making (MCDM) employing the Analytical Hierarchy Process (AHP) is utilized to assign weights to the KPI criteria for assessing supply chain performance and guiding competitive strategy creation. The study's results identified the indicators categorized into planning, production, sourcing, delivery, and returns. The measurement of supply chain performance suggests that the case study industry has a value of 84.11, signifying commendable performance. Moreover, competitive strategies, using Kraljic Matrix, Six Sigma, Lean Method, or mixed strategies, have been suggested to enhance supply chain performance and business competition, informed by the outcomes of the SCOR model and the MCDM approach.

Review

This study addresses a crucial and highly relevant topic: the measurement of supply chain performance and the formulation of competitive strategies for Small and Medium Enterprises (SMEs), specifically within the craft industry. Given the significant role of SMEs in economic development and their inherent vulnerabilities and adaptability, providing structured support for their strategic evolution is paramount. The paper proposes an integrated approach utilizing the SCOR model for identifying Key Performance Indicators (KPIs) and the Analytical Hierarchy Process (AHP) for multi-criteria decision-making, offering a robust framework to navigate the complexities of material, information, and financial flows. This combination is particularly commendable for its potential to provide a comprehensive and nuanced evaluation of supply chain health in a sector often characterized by informal processes. The methodology outlines a clear two-stage process: first, leveraging the SCOR model and business mapping to identify relevant KPIs across planning, production, sourcing, delivery, and returns, and then employing AHP to assign weights to these indicators, thereby quantifying supply chain performance. The reported performance value of 84.11 for the case study industry suggests a commendably performing supply chain, which is a valuable benchmark. However, while the abstract indicates that the SCOR-MCDM outcomes inform the suggestion of competitive strategies such as Kraljic Matrix, Six Sigma, Lean Method, or mixed approaches, a more explicit link explaining *how* the specific performance insights from the SCOR-AHP model translate into the *selection* or *tailoring* of these diverse strategic frameworks would strengthen this section. Understanding the specific diagnostic power of the SCOR-AHP model in guiding the choice between, for instance, a Lean versus a Six Sigma intervention, is critical. Overall, this study makes a significant contribution by offering a structured and practical methodology for SMEs to assess their supply chain performance and strategically plan for competition. The integration of established models like SCOR with a powerful MCDM technique such as AHP provides a valuable toolkit for SME managers and policymakers alike. The findings, particularly the quantified performance score and the suggested strategic avenues, demonstrate the applicability of the framework. Future work could perhaps delve deeper into validating the chosen strategies against the identified performance gaps, or exploring the scalability and adaptability of this SCOR-AHP framework across a broader range of SME industries, further solidifying its generalizability and practical impact. The paper offers a valuable guide for craft SMEs seeking to enhance their operational efficiency and competitive posture.

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