Inter-firm performance for global networks: An optimization model using data envelopment analysis

Abstract

Global competitiveness requires improvement across inter-connected supply chains. Uncoordinated networks have impeded their performance leading management to regard supply chains as integrated inter-firm networks for improving performance. An optimisation technique for this is Data Envelopment Analysis. Despite DEA’s increasing application its potential for supply chains has not been realised. This paper proposes a model that measures performance in inter-firm supply chains through efficiencies in interfirm collaboration. The ‘decision making units’ (DMUs) are the interconnected dyads of firms in the network allowing peer-comparisons and rankings against the best. This paper is original in providing a new model for inter-firm effectiveness.