The 11th Asia Pacific Industrial Engineering and Management Systems Conference The 14th Asia Pacific Regional Meeting of International Foundation for Production Research Melaka, 7 – 10 December 2010 Qualitative Performance Measurement of Supply Chain Management using Fuzzy Logic Controller Hamidreza Panjehfouladgaran, Rosnah Yusuff, Tang Sai Hong, Seyed Mahdi Homayouni Department of Mechanical and Manufacturing, Faculty of Engineering, Universiti Putra Malaysia hamidfouladgaran@gmail.com rosnah@eng.upm.edu.my saihong@eng.upm.edu.my homayoun@eng.upm.edu.my Abstract: Supply chain (SC) involves all activities meeting the customers demand and transferring material through downstream into upstream of chain for fulfilling the demands. To achieve supply chain objectives, organizations should control the activities for increasing the efficiency and effectiveness. Performance measurement is a set of metrics that a manager applying for controlling the planned tasks and investing amounts of resources for obtaining predetermined goals. All the SC performance measures can be divided into two major groups qualitative and quantitative. In recent years many methodologies have been developed in terms of quantitative measures but most of them merely focus on the control mechanism based on reported measures whereas the qualitative aspect of the work is still unexplored. In this paper, quality as one of the important factors of qualitative performance is discussed to be measured by means of fuzzy logic controller in Malaysian rubber glove manufacturers Keywords: Supply chain, performance measurement, qualitative measures, quality, and fuzzy logic controller 1. INTRODUCTION In today's world, supply chain management is a key strategic factor for increasing organizational effectiveness and also is for better realization of organizational goals such as enhanced competitiveness, better customer care and increased profitability. The era of both globalization of markets and outsourcing has begun, and many companies are selected supply chain and logistics to manage their operations. Most of these companies are realized that, in order to evolve an efficient and effective supply chain needs to be assessed for its performance (Gunasekaran et al., 2001). For this purpose, performance measurement and metrics have an important role to play in setting objectives, evaluating performance, and determining future courses of actions. Beamon (1999) divided all performance measures in supply chain into resources, flexibility and output and then categorized whole the metrics into two main groups qualitative and quantitative. Chan (2003) developed the previous works and in new classification presented SC performance metrics in detail and introduced their sub-titles of mentioned metrics. Quality is one of the qualitative measures which has determined the effectiveness of supply chain. Measuring qualitative factors is not easy because they are not representing numerically. Hence, in this paper is tried to develop a methodology to measuring the quality factor in supply chain management using fuzzy logic. The trend of the methodology is defining the appropriate membership function based on the data collection in Malaysian rubber glove manufacturers and then developing the fuzzy rules for all relations between the fuzzy logic controller states. Finally, the rules were inserted in the MATLAB software and the output performances were shown for the manufacturer’s performance measurement. 2. LITRATURE REVIEW 2.1. SUPPLY CHAIN MANAGEMENT Hugos (2003) defined that supply chain management (SCM) consists of different levels: supplier, manufacturer, distributer and consumer where materials flow downstream to upstream from supplier to customers, and information flows in both directions. The aim of SCM is to gain advantages in terms of customer service and cost over competitors. SCM focuses on new terms such as marketing, new product development and customer service thus; one of the classified characteristics of the SCM is establishing approaches for obtaining the customer satisfaction (Croom et al., 2000; Hugos, 2003; Mentzer et al., 2001). Performance of SCM influences the efficiency and effectiveness for achieving the mentioned goals. The efficiency of supply chain depends on the response to the demand accurately and quickly and satisfying customer by creating the value for them leads to effectiveness (Mentzer, 2004). 2.2. PERFORMANCE MEASUREMENT IN SCM Performance measurement is one of the important managerial keys which tries to integrate the tasks for controlling events. In this context, performance measurement is related to strategic intent, and the broad set of metrics used by managers to monitor and guide an organization within acceptable and desirable parameters. However, performance measurement implies an ability to monitor events and activities in a meaningful way (Morgan, 2004). The first step for performance