Indian Journal of Fundamental and Applied Life Sciences ISSN: 2231– 6345 (Online) An Open Access, Online International Journal Available at www.cibtech.org/sp.ed/jls/2014/04/jls.htm 2014 Vol. 4 (S4), pp. 1419-1438/Mazroui et al. Research Article © Copyright 2014 | Centre for Info Bio Technology (CIBTech) 1419 PERFORMANCE MEASUREMENT ON SUPPLY CHAIN MANAGEMENT; A MODEL FOR IRAN’S MACHINE-WOVEN CARPET INDUSTRY *Esmaeil Mazroui 1 and Mohammad Sadegh Haji Mirza Seyed Ahmad 2 1 Kashan University, Kashan, Iran 2 Department of Management, Naragh Branch, Islamic Azad University, Naragh, Iran *Author for Correspondence ABSTRACT Supply chain is among the issues received a considerable attention. Today they are not companies who compete with each other, but supply chains, therefore it is vital to devote attention to the issue of supply chain. A lot of works have been made regarding this topic; this research is to review andsummarize those works and then present a model so as to measure the performance of supply chain. The survey was carried out on Iran machine-made carpet’s supply chain. Hand-woven is among crafts has achieved a favorable position in Iran though there are few scientific research has been performed into it so far; so it demands careful consideration. Explanatory and confirmatory factor analysis was adapted in this research. Indicators used to measure supply chain performance had been classified into specific groups, namely: customer, cost, product, financial, supplier, employee and chain supply after performing explanatory factor analysis. And all of theseindicators and factors were validated in confirmatory factor analysis. Then they were valued separately through AHP method through which customer and supplier groups showed closer connection to supply chain performance than the others. Keywords: Supply Chain, Factor Analysis, Machine-woven Carpet INTRODUCTION Supply chain is an integrated procedure in which raw materials convert into finished products, then being delivered into customers (Beamon, 1999). The term supply chain management, as concept, is a philosophy and a management process which was emerged in 1980s (Svensson, 2003). Supply chain brings companies advantages through increasing customer services and their accountability, improving supply chain communication, reducing risk, shortening product development process, avoiding reparation in company’s internal processes, inventory shortage, introducing and/or advancing e-business (Meechan, 2008). In today's global economy, competition is becoming more ―supply chain verses supply chain‖ and less ―firm verses firm‖ (Hult et al., 2007) consequently paying attention to supply chain have been widespread in academic works. Different aspects of supply chain have been investigated; among those are enablers of supply chain performance. Performance enabler refers to factors which make the supply chain more potent to achieve better performance. Analyzing and classifying those factors would contribute to supply chain success in gaining better performance. Research Terminology A wide range of definitions has been proposed for supply chain management (SCM). Some of those are as follow: Performance measurement is the process to quantify both efficiency and effectiveness of actions (Neely et al., 2005). Performance measurement may constitute as feedbacks received from actions done so as to achieve customer’s satisfaction, and reach strategic decisions and goals (Bhagwat and Sharma, 2007). Performance measurement is so important that Murphy (1999) recognized the lack of measurement system is the key reason contributing to poor performance of supply chain (Varma et al., 2006). Consequently developing an appropriate measurement system is crucial due to the great effect it has on the efficiency of SCM (Beamon, 1999; Shah and Singh, 2001).