10th Global Conference on Business & Economics
ISBN : 978-0-9830452-1-2
Supply Chain Management in Textile and Supplier Performance Evaluation
Mehmet Tanyas
Faculty of Economics and Administrative Sciences, Maltepe University, Turkey
Cevza Candan
Textile Engineering Faculty, Istanbul Technical University, Turkey
Kadir Cesur*
Textile Engineering Faculty, Istanbul Technical University, Turkey
ABSTRACT
In this study, supply chain management is described and importance of well managed supply
chain management is indicated. Performance, performance evaluation and supplier selection and
performance evaluation methods are clarified. As a performance evaluation technique, Balanced
Scorecard system is described in detail and financial, customer, internal process, and “learning
and development” perspectives are defined. The application of the system to a Global Sourcing
Office which is mainly processing in textile business is also demonstrated. Analytical Hierarchy
Process which is also a performance evaluation method, is on the other hand employed to
determine the importance weight of the performance evaluation metrics. Finally, unlike the
previous studies, balanced scorecard is used as a supplier evaluation tool in this work and
furthermore the supplier evaluation system in a supply chain perspective is investigated.
1. INTRODUCTION
There has been a remarkable interest in supply chain management (SCM) related research in the
last twenty years because of its potential to improve the efficiency and reduce of the costs.
Sengupta and Turnbull (1996) mentioned that organizations have noticed that effectively
streamlining the supply chain can improve their customer service levels dramatically, reduce
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excess inventory in the system and cut excess costs from the network of the organization. In
recent years, the considerable attention among researchers regarding how to make the integration
of supply chain is possible. However, Christopher and friends (2006) indicated that there are no
supply chain (SC) strategies that are applicable to all types of products and markets.
One component of SCM that had until recently been relatively neglected was that of supply
chain performance measurement. According to Fawcett and Clinton (1996b), an effective
measurement system provides the basis to understand the system, influences behavior throughout
the system and provides information regarding the results of system efforts to supply chain
members and outside stake holders.
As a part of SCM performance measurement throughout the international purchasing strategy,
the performance evaluation of suppliers has big affects on customer satisfaction for the goods or
services that they have taken. According to Kannan and Tan (2002), there has been a shift in
manufacturing companies away from vertical integration toward smaller, leaner organizations
which leads to greater dependence on suppliers and increase the need to effectively manage
suppliers. It leads the companies to create meaningful supplier performance assessment in a
SCM manner.
There has been a special attention on performance evaluation systems and mechanisms and many
researchers studied on this subject. Hinkle and friends (1969) offered categorical method as a
simple and basic supplier performance measurement system while Timmerman (1986) indicated
linear averaging method as a more subjective and details system. Total cost based supplier
performance evaluation was also investigated by Timmerman (1986). Apart from these basic
performance evaluation systems, Cooper and friends (2004) studied on data envelopment
analysis, Pan (1989) on linear programming models, Mummalaneni (1996c) on statistical models
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and Talluri (2002b) on game models. Analytical hierarchy process (AHP) is also another method
to determine relative weights of performance evaluation which was studied by Hu (2009).
There has been discussion on supplier performance evaluation metrics as well. Dickson (1966)
was the first who studied on performance evaluation criteria, mentioned that cost, quality and
delivery performance are the most important supplier evaluation metrics. According to Talluri
(2002b), many other researchers indicated that cost, quality and delivery performance are the key
performance evaluation metrics. In the study of Kannan (2002), it is mentioned that the
performance metrics vary according to the type of purchasing and, by literature review and
survey research 30 performance metrics were determined and their importance in buying
environment was evaluated. He pointed out that the results of the survey research is parallel with
previous studies.
The previous studies mainly focused on performance evaluation techniques and performance
evaluation criteria to evaluate supplier performance. Literature survey showed that there is a lack
of research on establishing supplier performance evaluation system on a wider scale from supply
chain perspective by using Balanced Scorecard method. Different from previous researches, the
supplier performance evaluation system is created starting from company structure and its
strategic targets and previously used performance evaluation techniques are adopted for the
application.
In our paper, Balanced Scorecard is employed as a tool to create a supplier performance
measurement system for a global sourcing office which supplies textile products to an
international retail company. Initially, the performance evaluation system is was created in a
whole aspect using balanced scorecard. Then, performance evaluation metrics were defined and
AHP was used to determine the weighted importance of these performance metrics. Finally, the
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application of the performance evaluation system to a global textile sourcing company was
discussed.
2. ANALYTICAL HIERARCHY PROCESS
The AHP method, introduced by Saaty (1980), expresses how to establish the priority of a set of
alternatives and the relative importance of criteria in a multiple criteria decision making problem,
and has been extensively discussed in a variety of aspects. The consideration area of AHP is not
only the qualitative but also quantitative approaches. According to Saaty (1995), the AHP
process is based on three principles of methodical process: constructing hierarchies, establishing
priorities and reasonable consistency.
2.1 Structuring Hierarchies
The first step in AHP is to work on the decision problem in order to decompose it and then try to
build a hierarchical structure from the criteria or sub criteria. According to Saaty (1990), decision
maker should be careful with the structuring hierarchy. In order to do this, the structure should
present the problem in a best way, all sides of the factors that affect the problem should be
considered, all the information sources that might help the solution should be considered and all
the participators who will be in the problem process should be defined.
2.2 Setting Priorities
The second step in using AHP is to set the priorities and weights for each element. The elements
of each level of the hierarchy are rated using the pair wise comparison approach. Hu (2009)
stated that AHP provides unique features for criteria weight and subjective evaluations by pair
wise comparison and the 1-9 ratio scale in Table 1.
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Table 1. Saaty’s 1-9 scales for pair wise comparison in AHP
Importance intensity
1
3
5
7
9
2,4,6,8
Definition
Equal importance
Moderate importance of one over another
Strong importance of one over another
Very strong importance of one over another
Extreme importance of one over another
Intermediate values
The actors’ comparative decisions between the paired goals build the basic pair wise comparison
according to the relative importance of one goal to another. Paired comparisons are asked to the
respondents in order to define which goal or criteria in the pair are more important to him/her.
Saaty’s scale of measurement for the paired comparisons uses the verbal comparisons into
numerical value of the scale as in Table 1. After all criteria have been compared with the priority
scale pair by pair, a paired comparison matrix is formed (1).
(1)
Let C1, C2, …,Cn be the set of elements, while aij represents a judgment on a pair of elements C1,
Cn . In matrix A , aii =1 and aji = 1/ aij , i, j =1, 2,…, n . The relations between weights Wi and
judgments aij are simply given by Wi/ Wj = aij (for i, j =1, 2,…, n ).
2.3 Consistency
According to Saaty, consistency is not guaranteed in any measurement type. Errors in judgment
are common; therefore, the consistency ratio (CR) is used to measure the consistency in pair wise
comparisons (1990). He proved that for common matrix, the largest eigen value is equal to the
size of comparison matrix.
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Consistency Index (CI) and CR are calculated as below:
(2)
(3)
RI denotes the average consistency index and If CR ≤ 0.1, the estimate is accepted.
3. BALANCED SCORECARD
The balanced scorecard is a strategic planning and management system. It was originated by
Robert Kaplan and David Norton (1996d) as a performance measurement framework that added
strategic non-financial performance measures to traditional financial metrics to give managers
and executives a more balanced view of organizational performance. According to Kaplan and
Norton (1996d), the balanced scorecard is a management system (not only a measurement
system) that enables organizations to clarify their vision and strategy and translate them into
action. It provides feedback around both the internal business processes and external outcomes in
order to continuously improve strategic performance and results. When fully deployed, the
balanced scorecard transforms strategic planning from an academic exercise into the nerve center
of an enterprise.
Kaplan and Norton (1996d) stated that the balanced scorecard retains traditional financial
measures. But financial measures tell the story of past events, an adequate story for industrial age
companies for which investments in long-term capabilities and customer relationships were not
critical for success. These financial measures are inadequate, however, for guiding and
evaluating the journey that information age companies must make to create future value through
investment in customers, suppliers, employees, processes, technology, and innovation.
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The balanced scorecard suggests that we view the organization from four perspectives which are
financial, customer, business process and learning and improvement perspectives.
3.1 The Financial Perspective
Kaplan and Norton do not disregard the traditional need for financial data. Timely and accurate
funding data will always be a priority, and managers will do whatever necessary to provide it. In
fact, often there is more than enough handling and processing of financial data. With the
implementation of a corporate database, it is hoped that more of the processing can be
centralized and automated. But the point is that the current emphasis on financials leads to the
"unbalanced" situation with regard to other perspectives. There is perhaps a need to include
additional financial-related data, such as risk assessment and cost-benefit data, in this category.
3.2 The Customer Perspective
Recent management philosophy has shown an increasing realization of the importance of
customer focus and customer satisfaction in any business. These are leading indicators: if
customers are not satisfied, they will eventually find other suppliers that will meet their needs.
Poor performance from this perspective is thus a leading indicator of future decline, even though
the current financial picture may look good.
In developing metrics for satisfaction, customers should be analyzed in terms of kinds of
customers and the kinds of processes for which we are providing a product or service to those
customer groups.
3.3 The Internal Process Perspective
This perspective refers to internal business processes. Metrics based on this perspective allow the
managers to know how well their business is running, and whether its products and services
conform to customer requirements. These metrics have to be carefully designed by those who
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know these processes most intimately matching with company’s unique missions. These are not
something that can be developed by outside consultants.
3.4 The Learning and Development Perspective
This perspective includes employee training and corporate cultural attitudes related to both
individual and corporate self-improvement. In the current climate of rapid technological change,
it is becoming necessary for employees to be in a continuous learning mode. Metrics can be put
into place to guide managers in focusing training funds where they can help the most. In any
case, learning and growth constitute the essential foundation for success of any organization.
Kaplan and Norton (1996d) emphasize that 'learning' is more than 'training'; it also includes
things like mentors and tutors within the organization, as well as that ease of communication
among employees that allows them to readily get help on a problem when it is needed. It also
includes technological tools.
4. THE CASE STUDY
The performance evaluation system which is based on balanced scorecard was applied to a
global sourcing office of an international retail company. Before the application of a structured
performance evaluation system, the performance of the global sourcing office and suppliers have
been evaluated subjectively. However, the sourcing office which is located in Turkey has been
continiously improving its business activities and supply chain structure. As a result of that, there
has been a need for more objective, quantitative and structured performance evaluation system
for the office performance as well as its suppliers performances.
During the application of the office and supplier performance evaluation system, the office
manager and the department managers involved in a structuring the balanced scorecard system.
Also, all the employees took part in a performance evaluation criteria’s importance weight with
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the help of AHP method. While establishing the supplier performance evaluation system in the
“supply chain management” perspective, it was decided that the performance in the office
organisation should be established first. This enabled to determine the strategic targets much
better and the measurement criteria in each perspective of the balanced scorecard in a more
structured and strategical way.
Under this topic, the company structure will be introduced initially. Then the design of the
performance evaluation system will be described at the office level. Finally, the performance
evalutaion system established for the supplier performance measurement will be discussed.
4.1 The Company
Being part of an international retail company, the global sourcing office was established in
Turkey for mainly supplying textile products to its stores located in all over Europe. The global
sourcing office is structured in accordance with the type of products and thus its departments are
divided into categories such as home textiles, underwear, hosiery and outwear, etc. in terms of
business and product development section. For production, quality and sustainability of the
production, there is a separate department which promotes product development in parallel with
company requirements and specifications.
4.2 The Performance Evaluation System Design for the Office
In order to be able to establish a performance evaluation system throughout a whole supply
chain, first the office mission and vision needed to be clarified so as to define strategical targets
and also measurement criteria. The mission was described as being the preferred sourcing office
for the company branded products and vision was described as to increase the volume of the
business up to 50% by 2012 . According to the mission and vision, the strategical targets were
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described for each perspective of the balanced scorecard which are financial, customer, business
process and learning and development perspective.
In accordance with the strategical targets for each perspective, the performance metrics were
determined by the department and office managers. In order to create a more objective and
reliable performance measurement system, quantitative metrics were used as much as possible.
Consequently, the strategic targets and performance evaluation metrics in accordance with the
balanced scorecard frame is presented in Table 2.
Table 2. The strategic targets and performance metrics in accordance with balanced scorecard.
Balanced
Scorecard
Perspectives
Strategical Targets
Financial
Perspective
- Increase of income and
its type of combination
- Decrease of costs and
increase of efficiency
Customer
Perspective
- Customer satisfaction
- Customer sustainability
Internal
Process
Perspective
- Strong supplier relations
- Strong customer relations
- Efficient product follow
up
Learning and
Development
Perspective
- Continuous
improvement of the
employees
- New product or system
development
- Development of suppliers
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Performance Criteria
- Turnover
- Shipment quantity
- General expenses
- The cost of third party service providers
- On time deliveries
- Right quantity deliveries
- Product diversity
- Fast and accurate product development
- Product quality level
- Technical, social and environmental audits
- Supplier visits
- Customer visits
- Accurate information input
- Accurate order creation
- Fast logistic operations
- The amount of the external trainings
- The amount of the internal meetings and
trainings
- The achievement of new working methods
- Usage of new information technologies
- New product developments
- The training of suppliers
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In order to determine the relative importance of the performance criteria, AHP was used by
pairwise comparison of the criteria. According to the survey within the employees at the global
sourcing office, the qualitative pairwise comparison of the pre-determined criteria was made and
with the help of the computer programme Super Decisions which is operating on the logic of
AHP, the importance weights of the criteria for each balanced scorecard perspective were
calculated. The pairwise comparison in AHP model for financial perspective is shown in Table 3.
Table 3. The comparison table of office performance in financial perspective by using AHP.
1=Equally important 3=Medium level important 5= Important 7=Very Important 9=Extremely
Important
9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9
Turnover
Turnover
Shipment quantity
General expenses
The cost of third party
service providers
General expenses
The cost of third party
service providers
The cost of third party
service providers
Turnover
Shipment quantity
Shipment quantity
General expenses
For obtaining general performance evaluation results the evaluation metrics should have been
transformed into measurable and comparable numbers. Therefore, normalization and aggregation
method which was employed by Lohman and friends in their study was utilized (2004).
The normalization method is based on a linear 0-10 scale. It appeals to one’s imagination and
makes readability and interpretation of actual metric values very easy. Two steps need to be
taken for normalizing the metric scores.
1. Set performance targets: The target is the starting point for defining the metric score
range that corresponds with the 0-10 scale.
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2. Normalisation scores to a 0-10 scale: A target will lie somewhere between 0 and 10.
Since consistency is recommended when using a normalised scale, the values 0-10 should
always have a same meaning, regardless the metric observed. In our system, the score 8
corresponds to the target. This means that if the target is hit, the metric gets a score of 8
or higher.
After normalization of the results each performance criteria, the scores for each balanced
scorecard perspective were calculated. The results are given in Table 4.
Table 4. The relative importance of the performance metrics and scores in office level.
Perspective
Strategic Performance Criteria
Turnover
Shipment quantity
Financial
General expenses
Perspective
The cost of third party service
providers
On time deliveries
Right quantity deliveries
Product diversity
Customer
Product quality level
Perspective Fast and accurate product
development
Technical, social and environmental
audits
Supplier visits
Internal
Customer visits
Process
Accurate information input
Perspective Accurate order creation
Fast logistic operations
The amount of the external trainings
The amount of the internal meetings
and trainings
Learning and The achievement of new working
Development methods
Perspective Usage of new information
technologies
New product developments
The suppliers’ training
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Importance
Weight
55,0%
9,0%
18,0%
Results
5,9
6,1
10,0
18,0%
10,0
28,0%
15,0%
15,0%
28,0%
6,9
9,2
7,2
7,2
9,0%
8,5
5,0%
8,8
9,0%
9,0%
27,3%
27,4%
27,3%
25,0%
4,5
6,0
6,0
7,2
9,2
3,2
25,0%
2,7
12,5%
7,2
12,5%
6,0
12,5%
12,5%
10,0
3,2
Perspective
Result
7,4
7,9
7,1
4,8
10th Global Conference on Business & Economics
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As a final performance score of the office, the importance weights of each perspective was taken
from the study of Norton (2000). He mentioned that in an ideal scorecard, the importance weight
for each perspective should be as 22% for financial, 22% for customer, 34% for internal process
and 22% for learning and development perspectives. By using lineer averaging method of the
scores of the perspectiveds the final score for office performance was calculated and displayed in
Table 5.
Table 5. The office level general performance figures.
Total Performance Scorecard
Financial Perspective
Customer Perspective
Internal Process Perspective
Learning and Development Perspective
Total
Weight
22%
22%
34%
22%
100%
Target Score
8
8
8
8
8
Result
7,4
7,9
7,1
4,8
7,5
After any performance evaluation, both the actions taken for the results which are below the
target set and the further development of an achived target are equally important since these
will guaarantee continious improvement.
The results of the office performance in 2009 were below the target in all perspectives. Learning
and development perspective was especially much lower the target due to the financial turmoil
all over the world. Most of the trainings were cancelled for financial reasons and this had a
positive effect on financial perspective. However, lack of training might lead to loose of
motivation, worse operation performance, and decrease in other perspectives in long term.
The financial target was below the target as well due to decrease in order quantities. Considering
the global economic crisis, the score was regarded as acceptable. The customer perspective score
was acceptable but there were problems with “on time” deliveries. By supplier trainings, and by
focusing on production follow-up more, it was believed that the results could be improved.
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4.3 The Supplier Performance Evaluation System Design
The global sourcing office is working with various textile suppliers in terms of product type,
company structure, and capacity. The suppliers’ internal processes differ from each other even
for the same product group. Some of the suppliers have integrated capacity from spinning,
weaving or knitting, dying or printing to clothing. Some of them, on the other hand are only
doing the packaging process by using subcontractors in each process. Because of that variation
seen in the suppliers, the performance evaluation system which would be selected for textile
suppliers should have been as flexible as possible and the criteria however could have been
applied to all suppliers.
Bearing the aspects given above on mind, for suppliers the performance evaluation system was
based on the level performance evaluation of the global sourcing office. In parallel with the
mission, vision, strategic targets and performance criteria for office, the structure of the
suppliers’ performance evaluation system was established. Balanced scorecard was used as a
base for supplier performance evaluation and it should be emphasized that our study differed
from the previous studies in that sense particularly. While defining the performance metrics for
the evaluation of the suppliers, the structure of textile was also taken into consideration and thus
some of the metrics like flexibility, fast product development, the capability of the customer
representative were added to the criteria. Similar with the office level, the strategic targets and
evaluation parameters for supplier performance evaluation was mainly decided by the
department and office managers. The strategic targets and performance criteria for suppliers are
described in Table 6.
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Table 6. The strategic targets and performance metrics for suppliers.
Balanced
Scorecard
Perspectives
Strategical Targets
Financial
Perspective
- Increase of income and it’s
type of combination
- Decrease of costs and increase
of efficiency
- Financial Strength
Customer
Perspective
Business
Process
Perspective
Learning and
Development
Perspective
Performance Criteria
- Customer satisfaction
- Customer sustainability
- Strong customer relations
- Efficient internal
communication
- Continuous improvement of
the employees
- Development of capacity,
capability and flexibility
- Turnover
- The cost of third party service providers
- The financial situation
- Price
- On time deliveries
- Right quantity deliveries
- Product quality
- Technical, social and environmental audit
results and certificates
- Technical capabilities
- Meetings and office visits
- Fast product development and pricing
- Flexibility
- Internal communication level
- The capability of merchandiser
- Quality systems
- The consistency of order follow up
system
- Customer focus trainings
- New working methods or systems
- Capacity increase and new technologies
- Experience
Similar with the office performance evaluation, the importance weights of each criteria for
supplier performance were determined by the pairwise comparison with AHP method as well as
Super Decisions computer programme. After that, normalization and aggregation were applied to
the criteria in order to have the same numeric comparison for the criteria within a 0-10 scale. The
target value for each criteria was found out to be 8 as in the office performance evaluation.
Having the same target value provides a general approach for general understanding of the
results. Like the office performance evaluation, the importance weights of each perspective was
taken from the study of Norton (2000).
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An example for the supplier performance evaluation results for each perspective and general
performance result is given in Table 7 and Table 8.
Table 7. An example for a supplier performance evaluation for each perspective.
Perspective
Strategic Performance Criteria
Turnover
Financial
The cost of third party service
Perspective providers
The financial situation
Price
On time deliveries
Right quantity deliveries
Customer
Product quality
Perspective
Technical, social and environmental
audit results and certificates
Technical capabilities
Meetings and office visits
Fast product development and
Internal
pricing
Process
Flexibility
Perspective Internal communication level
The capability of merchandiser
Quality systems
The consistency of order follow up
system
Learning and Customer focus trainings
Development New working methods or systems
Perspective Capacity increase and new
technologies
Experience
Importance
Weight
65,0%
Results
Perspective
Result
6,0
23,0%
9,2
6,9
12,0%
4,0%
25,0%
25,0%
28,0%
7,0
7,0
9,2
9,0
8,2
8,8
8,0%
9,0
13,0%
5,0%
9,0
3,2
28,0%
9,0
29,0%
15,0%
15,0%
8,0%
7,0
8,3
9,0
10,0
30,0%
6,4
8,0%
16,0%
7,0
7,0
30,0%
7,3
16,0%
10,0
8,1
7,4
Table 8. An example of a supplier’s general performance.
Total Performance Scorecard
Financial Perspective
Customer Perspective
Internal Process Perspective
Learning and Development Perspective
Total
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Weight
22%
22%
34%
22%
100%
16
Target Score
8
8
8
8
8
Result
6,9
8,8
8,1
7,4
7,8
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The results for all suppliers evaluation and the average value are mentioned in Figure 1.
GLOBAL SOURCING OFFICE SUPPLIER EVALUATION FORM
SUPPLIER
TEXTILE
FINANCIAL PERSPECTIVE
CUSTOMER PERSPECTIVE
INTERNAL PROCESS PERSPECTIVE
LEARNING AND DEVELOPMENT PERSPECTIVE
DEPT
NAME
Turnover
The cost of
third party
service
providers
The financial situation
SCORE
Price
On time
deliveries
Right quantity
deliveries
Product quality
Technical, social
and enviromental
audit results and
certificates
Technical
capabilities
SCORE
Meetings and
office visits
Fast product
development
and pricing
Flexibility
Internal
communication
level
The capability of
merchandiser
Quality systems
SCORE
New working
methods or
systems
Capacity
increase and
new
technologies
Experience
SCORE
TOTAL SCORE
61, 65
A
B
8,3
9,1
10,0
10,0
9,0
9,5
8,8
9,3
8,0
8,0
8,2
9,1
8,4
8,7
10,0
9,0
6,5
4,5
9,0
9,0
8,7
8,5
9,0
8,0
9,0
8,0
8,0
9,0
9,0
8,0
9,0
8,0
9,5
9,0
8,8
8,4
9,0
9,0
9,0
8,0
10,0
9,0
9,0
8,0
10,0
8,0
9,3
8,5
8,9
8,6
67
C
10,0
8,8
9,0
9,6
8,0
8,5
10,0
10,0
7,5
9,0
9,2
8,0
8,0
7,0
9,0
8,0
9,0
7,9
8,0
7,0
7,5
8,0
7,0
7,7
8,5
67
D
7,9
8,5
9,0
8,2
8,5
6,1
9,9
10,0
4,5
9,0
8,4
9,0
9,0
8,0
8,0
10,0
8,0
8,6
8,0
8,0
9,0
9,0
9,0
8,6
8,5
67
E
F
10,0
9,6
0,0
9,7
9,5
9,0
7,6
9,5
8,0
8,0
6,7
8,3
9,3
10,0
10,0
9,0
4,5
4,5
9,0
9,0
8,4
8,7
8,0
8,0
8,0
7,0
9,0
8,0
10,0
7,0
8,0
6,0
10,0
9,0
8,8
7,4
10,0
8,0
8,0
8,0
8,0
7,0
9,0
8,0
7,0
10,0
8,7
8,2
8,4
8,3
67
G
6,8
3,1
9,0
6,2
8,0
7,7
9,8
10,0
5,5
8,0
8,7
9,0
9,0
9,0
9,0
10,0
8,0
9,1
8,0
8,0
9,0
8,0
10,0
8,5
8,2
65
H
3,5
10,0
9,0
5,7
7,0
9,0
8,9
9,0
6,5
8,0
8,6
8,0
9,0
8,0
9,0
10,0
9,0
8,8
9,0
9,0
10,0
9,0
10,0
9,3
8,2
67
I
9,5
9,6
9,0
9,5
7,0
7,0
6,3
10,0
4,5
9,0
7,6
8,0
8,0
7,0
8,0
7,0
8,0
7,6
8,0
8,0
7,0
8,0
7,0
7,7
8,0
64
J
9,3
10,0
9,0
9,5
8,0
9,9
10,0
8,0
3,5
8,0
8,6
8,0
7,5
8,0
7,0
7,5
5,0
7,4
7,0
7,0
5,0
7,0
7,0
6,7
8,0
65
K
9,2
10,0
9,0
9,4
7,0
8,8
4,0
9,0
4,5
8,0
7,1
7,0
7,0
7,0
8,0
7,0
9,0
7,3
8,0
7,0
8,0
8,0
9,0
8,1
7,9
63
L
9,1
9,8
9,0
9,3
7,0
4,6
10,0
8,0
3,5
8,0
7,2
7,0
8,0
8,0
8,0
7,0
8,0
7,8
8,0
7,0
7,0
8,0
5,0
7,3
7,9
63
M
8,4
4,5
6,0
7,2
7,0
7,7
10,0
8,0
3,5
8,0
8,0
7,0
8,0
8,0
8,0
8,0
8,0
8,0
8,0
7,0
6,0
7,0
5,0
6,8
7,6
67
N
O
9,2
10,0
1,0
10,0
8,0
6,0
7,2
9,5
7,0
5,0
6,6
10,0
8,5
10,0
10,0
9,0
3,5
3,5
9,0
6,0
8,0
8,5
8,0
6,0
7,0
7,0
7,0
7,0
7,0
7,0
8,0
6,0
8,0
5,0
7,3
6,6
8,0
6,0
7,0
5,0
7,0
5,0
8,0
5,0
9,0
7,0
7,9
5,6
7,6
7,5
65
P
7,7
10,0
8,0
8,3
7,0
5,8
5,9
10,0
3,5
8,0
7,0
7,0
8,0
8,0
7,5
7,0
7,0
7,6
7,0
8,0
5,0
7,0
7,0
6,8
7,5
67
Q
2,0
8,7
8,0
4,2
7,0
7,9
9,8
10,0
6,5
9,0
8,9
7,0
8,0
9,0
8,0
9,0
6,0
8,2
8,0
7,0
7,0
7,0
10,0
7,8
7,4
63, 64
R
9,0
9,4
7,0
8,9
7,0
4,4
6,0
8,0
3,5
7,0
6,1
8,0
8,0
7,0
7,0
7,0
6,0
7,3
7,0
6,0
5,0
5,0
7,0
6,0
7,1
63, 64
T
8,3
9,5
8,0
8,6
8,0
4,4
1,4
9,0
3,5
7,0
5,2
5,0
7,0
8,0
7,0
7,0
7,0
7,2
7,0
7,0
7,0
8,0
5,0
7,0
7,0
63, 64
U
6,6
10,0
9,0
7,7
7,0
4,0
0,0
9,0
3,5
9,0
5,0
6,0
8,0
7,5
8,0
5,0
7,0
7,2
7,0
7,0
6,0
7,0
10,0
7,3
6,8
61, 62,
63, 64,
67
W
8,4
4,7
4,0
7,0
8,0
0,0
5,4
9,0
3,5
8,0
5,2
8,0
9,0
9,0
5,0
6,0
8,0
7,8
6,0
6,0
7,0
5,0
9,0
6,3
6,8
65
X
5,8
8,5
9,0
6,8
8,5
0,0
10,0
9,0
2,5
6,0
6,1
7,0
7,0
6,0
7,0
6,0
8,0
6,6
6,0
6,0
5,0
9,0
9,0
7,2
6,7
67
Y
Z
5,5
8,6
6,5
0,0
9,5
8,0
6,2
6,6
7,0
6,0
2,3
3,1
3,5
7,9
9,0
9,0
4,5
2,5
9,5
8,0
5,6
6,5
8,0
8,0
7,0
6,0
6,5
6,0
7,0
9,0
6,0
6,0
9,0
7,0
6,9
6,6
8,0
7,0
8,0
7,0
7,0
5,0
8,0
8,0
7,0
5,0
7,7
6,7
6,6
6,6
63,67
AB
1,1
6,8
7,0
3,1
7,0
4,7
9,7
8,0
4,5
8,0
7,3
8,0
9,0
8,0
8,0
8,0
7,0
8,2
7,0
7,0
6,0
6,0
9,0
6,9
6,6
67
AC
7,7
0,0
4,0
5,5
7,0
3,7
10,0
8,0
2,5
7,0
6,8
7,0
7,0
8,0
7,0
7,0
5,0
7,1
7,0
5,0
5,0
5,0
7,0
5,9
6,4
63
AD
7,6
4,8
7,0
6,9
8,0
0,0
9,3
8,0
1,5
7,0
5,7
7,0
8,0
7,0
7,0
6,0
4,0
6,9
6,0
6,0
5,0
6,0
5,0
5,7
6,4
63
AE
8,2
7,2
8,0
7,9
9,0
0,0
8,4
8,0
2,5
6,0
5,4
7,0
7,0
6,0
5,0
4,0
6,0
5,9
6,0
6,0
5,0
7,0
7,0
6,3
6,3
63
AF
0,0
7,9
7,0
2,7
7,0
4,9
8,6
9,0
3,5
7,0
7,1
7,0
7,0
8,0
7,0
8,0
7,0
7,4
7,0
6,0
5,0
7,0
5,0
6,3
6,1
67
AG
5,8
2,5
5,0
4,9
7,0
3,7
10,0
10,0
2,5
5,0
7,0
8,0
6,0
6,0
7,0
6,0
4,0
6,1
5,0
6,0
5,0
6,0
7,0
5,7
6,0
60
AH
0,0
6,5
6,0
2,2
5,0
9,0
10,0
9,0
3,5
6,0
8,3
6,0
7,0
7,0
7,0
6,0
5,0
6,6
6,0
5,0
5,0
5,0
7,0
5,6
5,8
63
AI
0,0
6,5
8,0
2,5
6,0
8,0
0,0
8,0
2,5
9,0
5,6
6,0
8,0
7,0
8,0
6,0
6,0
7,2
7,0
6,0
5,0
7,0
7,0
6,6
5,7
63, 64
AJ
1,8
10,0
6,0
4,2
6,0
5,8
8,5
7,0
1,5
6,0
6,5
7,0
8,0
7,0
4,0
5,0
4,0
6,3
5,0
5,0
5,0
5,0
5,0
5,0
5,6
63
AK
0,0
0,0
8,0
1,0
7,0
5,5
1,4
8,0
2,5
8,0
5,3
8,0
7,0
8,0
8,0
7,0
9,0
7,7
7,0
7,0
5,0
7,0
5,0
6,4
5,4
63
AL
AM
0,0
0,0
8,6
0,0
8,0
8,0
2,9
1,0
7,0
7,0
0,0
0,0
0,0
10,0
9,0
8,0
4,5
2,5
8,0
6,0
3,9
5,8
6,0
5,0
7,0
8,0
7,0
7,0
7,0
8,0
7,0
6,5
8,0
6,0
7,0
7,2
7,0
7,0
7,0
6,0
5,0
5,0
7,0
7,0
5,0
5,0
6,4
6,3
5,3
5,3
63
AN
0,0
0,0
6,0
0,7
7,0
8,8
0,0
8,0
3,5
7,0
5,7
7,0
7,0
8,0
7,0
9,0
6,0
7,5
7,0
7,0
4,0
5,0
5,0
5,6
5,2
63
AO
1,2
8,4
6,0
3,5
8,0
0,0
7,4
8,0
1,5
8,0
5,3
6,0
6,0
7,0
6,0
5,0
4,0
6,0
6,0
6,0
5,0
5,0
5,0
5,4
5,1
63
AP
0,0
0,0
8,0
1,0
9,0
1,7
10,0
8,0
2,5
7,0
6,4
8,0
5,0
6,0
6,0
6,0
7,0
5,9
7,0
7,0
5,0
8,0
5,0
6,7
5,1
67
AQ
4,9
4,7
6,0
5,0
8,0
0,0
8,3
8,0
1,5
5,0
5,2
8,0
4,0
5,0
3,0
3,0
7,0
4,4
5,0
4,0
4,0
5,0
5,0
4,8
4,8
63
AR
0,0
0,0
7,0
0,8
6,0
0,0
0,0
8,0
1,5
7,0
3,3
6,0
4,0
5,0
5,0
4,0
6,0
4,7
6,0
5,0
5,0
5,0
9,0
5,9
3,8
65
AT
3,1
3,0
2,0
2,9
10,0
0,0
0,0
7,0
1,5
4,0
2,8
6,0
4,0
4,0
2,0
2,0
7,0
3,7
3,0
4,0
4,0
6,0
5,0
4,5
3,5
6,8
6,7
61, 65
62, 63,
64
60
67
64
Average
7,6
7,1
The consistency
Customer focus
of order follow
trainings
up system
7,2
Figure 1. The supplier performance evaluation list in global sourcing office
From these results, it may be seen that 10 out of 46 suppliers were above the target whereas 12
suppliers took a score below 6,0 which was not a good performance. It should also be noted that
10 suppliers out of 46 were located out of Turkey. The results suggested that it was necessary to
make investment on the development of the suppliers outside Turkey and to organise trainings.
On the other hand, the management decided to phase out the worst 4 suppliers in terms of
performance. It was seen that they did not show the development expected and there was a risk
for the customer perspective of the office.
5. CONCLUSION
This study designed the performance evaluation system in a textile global sourcing office using
Balanced Scorecard method. Its primary contribution is the development of a supplier
October 15-16, 2010
Rome, Italy
17
10th Global Conference on Business & Economics
ISBN : 978-0-9830452-1-2
performance evaluation system by adopting AHP into Balanced Scorecard within a supply chain
perspective. Although the balanced scorecard approach takes considerable thought to develop an
appropriate scorecard, the structure of balanced scorecard is available for textile business with its
flexibility to adopt to the different demands and conditions.
In order to create the supplier performance evaluation system, we first started with the base and
accordingly established an organisational performance evaluation. This brought the advantage to
clarify the vision, mission and strategic targets of the organisation as well as the demands from
the suppliers. After clarification of the demands and criteria by using balanced scorecard, AHP
method was used to determine the importance weights of the criteria by pairwise comparisons.
After that, the results for each criteria has trassferred into 0-10 scale numeric velues according to
the lineer scaling of the target, possible minimum or maximum resulst and final results.
The system provided detailed information about the performance results and enabled to figure
out the bottlenecks in terms of finance, customer, internal process and learning and development
perspectives. So that, it would be possible to focus on the critical points for further development
by corrective actions.
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