A framework for integrating PLS-PM with supply chain performance hierarchy

Supply chain (SC) is a network, which comes into existence with the formation of every organization, and becomes automatically complex as the organization progresses. Performance measurement in supply chain is considered to be a key for the survival of organizations and it is not a secret that many academics and practitioners are attending to developing an effective performance evaluation mechanism amidst its complexity. By this article, which is written based on an on-going doctoral study, authors wish to illustrate the advantages of applying partial least squares- path modeling method (PLS-PM), a form of structural equation modeling technique (SEM), combined with the SC performance hierarchy concept, for measuring performance in supply chains. The method is tested with the help of a previously published case study and a hypothetical case study, to ensure the combination could produce results in a productive manner, which was confirmed after the tests. Few being the ability to produce an overall SC performance score (SCPS), and the ability to estimate the impact of different performance measurement areas on overall SC performance. Therefore, with further testing, the proposed method can eventually be implemented in industry as a managerial decision making tool.