Title: Adding value in supply chains by improving operational efficiency using data envelopment analysis: a case from published data

Authors: P. Sunil Dharmapala

Addresses: Department of Operations Management and Business Statistics, College of Commerce and Economics, Sultan Qaboos University, P.O. Box 20, Al-Khod 123, Muscat, Sultanate of Oman

Abstract: Data envelopment analysis (DEA) has been used in many studies to measure the efficiency of supply chains. There, the authors primarily used the traditional Charnes-Cooper-Rhodes (CCR) and Banker-Charnes-Cooper (BCC) models to measure relative efficiency of decision-making units in the supply chain, and their main focus was on enhancing the efficiency of inefficient units. In this paper, using the CCR model with intrinsic assurance regions (IAR), we focus on how to make cost savings in a supply chain by projecting inefficient supply units on to the efficient frontier. By analysing suppliers| data already published in the literature, we demonstrate how to add value in the supply chain by improving operational efficiency of inefficient supply units.

Keywords: DEA; data envelopment analysis; intrinsic assurance regions; inefficiency; supply chain management; SCM; value added; supply chain efficiency.

DOI: 10.1504/IJAMS.2008.021099

International Journal of Applied Management Science, 2008 Vol.1 No.2, pp.160 - 175

Published online: 04 Nov 2008 *

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