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

and the output performances were shown for the

manufacturers performance measurement.

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.

2. LITRATURE REVIEW

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

2.2. PERFORMANCE MEASUREMENT IN

SCM

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).

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

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
measurement is establishing a performance measurement
system (PMS). Tangen (2003) declared that PMS has
some characteristics which are classified in:
1)

PMS should be across the organizations strategy

and should has balance attitude to the metrics that
they are vital for the organizations.

2) PMS should be appropriately concentrated on

short and long term results.
3) PMS should have cohesion through the
organizations strategy and should explain
usefully and understandable.
Performance measurement in SCM strives to focus on
common goals among the suppliers and manufacturers.
Beamon (1999) presented a framework for selecting the
performance measurement systems. Beamon divided
performance measures into qualitative and quantitative
measures. Gunasekaran et al. (2001) categorized
performance metrics into six group which are planned
order procedure, SC partnership, production level, delivery
link, customer service, finance and logistics cost. Otto and
Kotzab (2003) declared six complementary methods for
measuring SCM. Chan (2003) developed new classifying
in PMS measures in supply chain and divided qualitative
measures into quality, flexibility; visibility; trust and
innovativeness and quantitative measures into cost and
resource utilization. Aramayan et al. (2007) applied a
framework for performance measurement in the agri-food
supply chains. According to above mentioned matters,
there is much published research on the quantitative
performance measures but qualitative metrics pay not
much attention on. Following, important measures that are
categorized in the performance measurement of SCM are
considered and discussed.

2.3. QUALITATIVE MEASURES IN SUPPLY

CHAIN
Beamon (1999) categorized SC performance measures in
three main types; Resource, Output and Flexibility and
declared that output measures include customer
responsiveness, quality and quantity of the final product
produced. Some of the output measures can be measured
numerically such as number of items produced but some
of them such as customer satisfaction and product quality
cannot be measured numerically. Chan (2003) in new
classification introduced performance measures of SCM.
Chan divided all the metrics into quantitative and
qualitative and then established sub factors for each
category.
Qualitative category is divided into quality, flexibility,
visibility, trust and innovativeness. Chan (2003) claimed
that quality factor of the mentioned criteria have a full
picture of criterion which should be interpreted in the
SCM qualitative performance. Quality is categorizes into
customer satisfaction, customer response time, lead time,

on time delivery, fill rate, stock-out probability and

accuracy. Aramyan et al (2007) for performance
measurement of agri-food supply chains, presented
another classification which includes efficiency,
flexibility,
responsiveness,
and
food
quality.
Responsiveness classified in fill rate, product lateness,
customer response time, lead time, customer complaints,
shipping errors.
The definitions of the sub-factors of quality and
responsiveness are same but there are some variations in
sub-factors name. Therefore, in this paper quality and
responsiveness factor are modified in six criteria and
called quality for measuring performance measurement in
SCM of Malaysian rubber glove manufacturers. Table 1
shows the modified criterion for quality factor.

2.4. FUZZY LOGIC CONTROLLER

Fuzzy logic controller (FLC) was first introduced in the
early 1970s and after more than three decades changed to
one of the effective research area in the application of the
fuzzy theory. FLC generally has a specific architecture
which includes input interface called fuzzification module
and output interface named defuzzificaztion and fuzzy
inference system that carry out the system processing
(Pedrycz, 1995). Fuzzification is the process of transform
precise number to crisp quantity and defuzzification has a
reverse action compare to fuzzification (Ross, 2004).
Inference system is the process of formulation input to an
output by using fuzzy logic. Inference system involves
membership function, IF-THEN rules and logical
operations in fuzzy logic. Fuzzy inference system has two
types: Mamdani-type and Sugeni-type which are vary
somewhat in the way of output. Hence, Mamdani-type is
more popular than other type. In current paper Mamdanitype is applied because that fuzzy consequent in this type
is easier to be understood and more useful for obtaining
imprecise human expertise (Mathwork, 2008). FLC has
three features:
1) Logical control: means using the free expression
for control the system with IF-THEN rules
2) Parallel control: means all the guidelines which
apply for control the rules in FLC.
3) Linguistic control: is used for better
understanding in qualitatively terms. Moreover,
linguistic control has ability to use ambiguous
linguistic variables.
Terano et al. (1992) declared FLC can be categorized in
three classifications which are expert experience and
knowledge, operator models and fuzzy models. In current
research, expert experience is applied in the manufacturing
companies to achieve data about rubber glove
manufacturers to attain performance measurement of
quality factor. There are some researches around the
qualitative performance measurement in SCM using fuzzy

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
Table 1. Quality performance Measure in SCM (Chan, 2003; Aramyan et al., 2007)
Factor

Definition

Customer Complaints

The number of customer complaints registered

Customer Response Time

The amount of time between an order and its corresponding delivery.

Lead Time

The time required once the product began its manufacture until the item it is
completely processed.

On Time Delivery

The percentage of orders delivered on or before the due date.

Fill Rate

The proportion of orders that can be filled immediately

Accuracy

Percentage of accurate goods delivered to clients.

logic. Kwong et al. (2002) applied scoring method and

fuzzy expert system for supplier assessment in an industry.
Fuzzy rules applied to define qualitative terms. Lau et al.
(2002) proposed a methodology for monitoring the SC
network with applying fuzzy logic for some reasons such
as accuracy, reliability, compactness and lack of the
concept of justification in rule-base system. Chan and Qi
(2003) presented innovative fuzzy logic process based
method for performance measurement in SCM.
Unahabhokha et al. (2007) developed a fuzzy expert
system approach to forward looking performance
measurement system of delivery metric in two Thai textile
companies. The developed system enables managers to
develop systematic ways to predict future performance and
identify potential problems in a company. In current
research fuzzy logic controller as a robust and easy
understanding method is applied to evaluate quality
performance in mentioned manufacturers.

3. METHODOLOGY
Quality performance measurement of SCM for Malaysian
rubber glove manufacturers was done in five steps.
Following the process of methodology will be described.
First step in the methodology was choosing the criteria and
modification of them for performance measurement
purpose which was explained in previous section. The next
step was designing the questionnaire for gathering true
required information from Malaysian rubber glove
industry. The information was used to construct the
proposed framework of performance measurement in
SCM. The answers contain the most interesting criteria
which were used as input variable of the framework. The
researcher assumed that the management would like to
evaluate the performance of the criteria in terms of the
criteria. Moreover, the questionnaire was designed in a
way that it would help the researcher to define the correct
membership function and fuzzy rules based on the range
of answers. Therefore, role of the questionnaire in the
research is to obtain the robust data of the Malaysian
rubber glove industries which can be applied in the
proposed FLC.

Questionnaire, designed in two versions which the first

one was pre-questionnaire. Pre-questionnaire was prerequisite step to design the final questionnaire. The correct
range of data for each criterion was gathered through this
questionnaire. Moreover, probable faults in designing the
questions were eliminated by cooperation one of the expert
managers between rubber glove manufacturers. The
second version was designed in both languages English
and Bahasa Melayu and consists of general information
and general questions, questions about criteria, and
supplementary section. Supplementary was designed to
add new factors according to experience of the experts in
mentioned industry and ranking the quality criteria from
importance point of view. Then, questionnaire was
distributed between forty five manufacturers that are
members in Malaysian Rubber Glove Manufacturer
Association (MARGMA). Thirty companies answered
questionnaire and their responses entered in the FLC
design module.
The next step in the methodology was FLC design which
includes membership function design and fuzzy rules
design. In membership function design, factors divided
into two gropes; numerically and proportionally.
According to the factors definitions, lead time, customer
complaints and customer response time classified in the
numerically group and fill rate, on time delivery and
accuracy classified in the proportionally group. Four
linguistic variables for each group were considered. very
low, low, medium and high for numerically group
and poor, average, good and very good for
proportionally group. Then, triangular membership
function shape was chosen because it is most popular in
the performance measurement (Kwong et al., 2001; Chan
and Qi, 2003; Ohdar and Ray, 2004). Range of the
membership function depended on the alternatives that
were designed for each criterion in the questionnaire. For
instance alternatives which were designed for lead time
has four alternatives; less than 1 day, 1 day, between 1 to 5
days and more than 5 days. First alternative in triangular
membership function should be covered range of data
which are less than 1 day. Therefore, four alternatives

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
cover four types of membership function. Figure 1 shows
the membership functions for mentioned factors.

done for better decision making for each output state and
easy understanding for find out the relationships between
the factors. In the last step of the methodology, the fuzzy
logic toolbox of MATLAB was applied to entering the
membership functions and fuzzy rules. Furthermore, the
software helped to show the result and analyze the output
performance in rubber glove companies. The following
section shows the result of the research and discuss about
the output analysis in the quality performance
measurement in SCM.

4. RESULT AND DISCUSSION

The result of the research is categorized into; making a
framework with using the FLC for performance
measurement of SCM in Malaysian rubber glove
manufacturers and test the framework on two
manufacturers for illustration of the result and analysis of
the output. Figure 2 shows the schematic of the
framework.

Figure 1. Quality Factors Membership Function in

Performance Measurement of SCM
The rule base of the proposed FLC was defined in three
steps; firstly, total numbers of interactions between the
input variables of the FLC were defined. The numbers of
rules were established based on the permutation with
number of membership function and numbers of criteria.
The numbers of factors are six and numbers of
membership functions are four. The total amount of rules
are 4^6 equal to 4096 rules. In second step, some illogical
relationships between the rules found and were omitted
from the rule base. These rules showed states that had
illogical interaction between two or more criteria. For
example if the lead time variable be medium or
high then the customer response time would not be
very low or low. Its because when the speed of
production is not short enough, the company cannot
response to the order of customer before due date. Finally,
in last fuzzy rule design step, remaining rules were
contracted in 104 general rules and the output for each rule
was determined by the researcher. The contraction was

Quality
Performance
Output

Figure 2. Qualitative Performance Measurement

Framework
The framework was created to introduce new approach for
measuring qualitative performance in SCM. The FLC was
used as an inference system because it is a robust and easy
understanding approach for using linguistic terms into
logical rules.
For showing the performance of the quality factor in
rubber glove manufacturers, two companies were selected
and separate interview with them conducted. Interviewer
asked from the expert managers to respond to the actual
data for six criteria. Table 2 shows the achieved data from
the mentioned companies. The data inserted in the
software and the output show the result of the performance
The Case A deliveries 90 percent of its received orders on
time and 90 percent of them are delivered accurately.

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
Table 2. Actual Test Case Data
Case Number

Accuracy

Customer
Complaints

Lead
Time

Fill Rate

Case A
Case B

90
95

10
7

2
1

50
60

The company received on average 10 complaints of thecustomer per month and would response to the orders
within 10 days averagely. By the way, the production may
last two days on average. The supply 50 percent orders
from their orders. The framework would measure their
performance as 76.9 from 100. Company B delivered 90
percent of products to the customer accurately and
received seven complaints from the customer in a month
on average. Company B produces one unit of product in a
one day. In addition to, company B, for fulfill the demands
from customer used 60 percent from the stock for
fulfillment immediately. Moreover, company B has 12
days between receiving and order until delivery through
the customer and finally 92 percent of orders delivered to
the customers on time. According to the mentioned
companies performance measurement, this note is
understandable that some criteria is more sensible in
comparison with other criteria. For example, accuracy and
customer complaints are more sensitive compare to fill rat
and customer response time because when the company
cannot provide ordered products accurately, it cause to the
dissatisfaction and reduce output performance. Mentioned
problem may not always cause to the complaints because
customers prefer to change the company and provide the
requirement from the competitors. Figure 3 and Figure 4
show two states of analysis between criteria which are
provided by means of software and illustrates the effect of
interaction between the criteria. The framework have some
advantages such as ability to implementing in any situation
and also is a better approach compare to other approach
such as Multi Criteria Decision Making (MCDM) models,
linear and integer programming. The weakness of the
MCDM models is their flexibility in changing the
qualitative terms into the linguistic variables in contrast of
FLC and also about integer and linear programming the
weakness are constraints in this approach equally weighted
and they have significant problems in considering
qualitative factors. The main disadvantage of the FLC
approach is decreasing the accuracy between the rules
when the numbers of rules increase. However, number of
criteria should

Customer
Response
Time
10
12

On-Time
Delivery

Output
Performance

90
92

76.9
83.4

divided into quantitative and qualitative that qualitative

have not been explored as well as quantitative. Quality
factor of qualitative categories selected and modified to
obtain six metrics which showed a full picture of
qualitative factors in SCM. A questionnaire conducted in
Malaysian rubber glove manufacturers and FLC applied
and a framework was obtained for performance
measurement of quality factor in this industry. Then, the
framework with 104 general rules programmed in the
MATLAB software. Finally, for illustration of the results,
two companies were selected and the actual data of their
six criteria inserted in the software and the output
performance of them were obtained.

Figure 3. Output Analysis between Accuracy and

Customer Response Time

5. CONCLUSION
Performance measurement of SCM has an important role
to determine the goals and achieving performances.
Hence, companies strive to control the activities by means
of mentioned tool. Performances metrics in SCM can be

Figure 3. Output Analysis between Accuracy and

Customer Complaints

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
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