Supply Chain Performance Measurement: a Transaction Cost Theory – and Value-based Approach

The network management within supply chains requires a systematic cost oriented tool to measure and manage the transactions between the partners. Therefore a supply chain performance measurement was developed, that considers all cost of selection, acquisition, use, administration, maintenance and disposal. It can be used for determining what a particular purchase really cost the organization – including obvious issues (transportation, duties etc.) as well as more subtle issues (e.g. process changes due to quality deviations). Therefore a combination of cost-based and value-based approaches was used. The system was put into action in an international supply chain within the manufacturing industry to prove its practical use.