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.