Performance measurement system in supply chain management (SCM) has been receiving increasing
attention by business organizations as a way to evaluate efficiency in supply chain
activities. Assessing the performance of supply chain uncovers the gap between planning
and actual performance as to trace the potential problems thus ascertain necessary areas
for improvement. This research aims to investigate the application of performance measurement
system in SCM as well as exploring its relationship with organization’s performance
among Malaysian manufacturing firms. By utilizing the questionnaire method, respondents
involved were requested to indicate the extent to which they use a number of 24 selected
performance measures that are related to SCM. The results show that the majority of the
observed manufacturing firms utilize specific performance measurement tools in evaluating
the supply chain performance. The current performance measurement techniques, the Balanced
Score Card is adopted by around a quarter of the total responding firms followed
by Supply Chain Operations References Model – SCOR, which attracts total users of only
a fifth of the total respondents. In particular, performance measures under customer service
category recorded the highest number of usage followed by cost-based performance measures
and operations management. The results of this investigation also unveil few major points
that are important to be highlighted. Firstly, the obtained outcomes of this study bring to
light the significant relationships between the utilization of supply chain performance measures
under customer service, operations management and organizational performance. In
addition, this study discovered a significant correlation between the size of the organization
and the extent of use of supply chain performance measures and how these two variables
positively correlated. Lastly, the findings also suggested that the performance measures for
SCM has been playing a crucial role in enhancing the performance of the organizations and
is increasingly operated as the firms grow in size. Based on the brief highlighted points listed
above, it is not an exaggeration to say that this research contributes new information to the
body of knowledge in performance measurement system in SCM and its associations with
organizational performance.