Evaluating Supply Chains Based on the Novel Network Data Envelopment Analysis Model

Abstract

In today’s competitive world, organizations are required to respond to customers and their stakeholders whose goals are profit, cost reduction, quality improvement, and customer satisfaction. Therefore, it is vital to realize the ways for continuous quality improvement, customer satisfaction and organizational performance management. A performance measurement system should be designed to consider the chain specifications of the network and its interrelations. Data envelopment analysis (DEA) is broadly used to evaluate the relative performance of a set of manufacturing processes because their models do not require considering the precise production functions. In this paper, a new approach based on network DEA is developed to evaluate the performance of an organization’s supply chain. The proposed model considers different constraints simultaneously. The purpose of this research is to provide a new approach by effective network DEA in order to evaluate the supply chains with different assumptions. This model is input–output-oriented and has a target setting, considering dual-role factors and desirable/undesirable outputs as well as flexible intermediate measures to evaluate the efficiency in a more realistic situation. Finally, a case study in drink industry is reanalyzed relying on the proposed model, and the results are presented and discussed. The results show that the approach presented in this research by considering the targets for inputs and outputs, in addition to improving efficiency, can also calculate and report the distance between DMUs and their targets. Also, the proposed model by considering the dual-role factors, desirable and undesirable outputs, has provided a comprehensive method that with all of these assumptions can evaluate the network DMUs under more realistic conditions. So, through this model with the considered assumptions, not only the efficiency scores of the units can be calculated but also an analysis of how to improve the units is also obtained according to the decision makers’ opinion.