Abstract Both practitioners and research scientists have noted a number of problems regarding measurement activities during the past decade. The problems reported suggest that measurement activities are fragmented both within and across organizations. Expands on a systems perspective on supply chain measurements and describes how problems can be communicated, understood and managed by developing methods and tools for describing interrelationships within supply chains. Empirical evidence from a case study of a Swedish home furnishing business supply chain provides data suggesting that firms within a supply chain cannot simply be categorized as either having adopted systems thinking or not. Rather, both structured models indicating a high degree of systems thinking, and problems showing fragmentation, are present. A performance model, which is used to reflect the systemic structure of an underlying supply chain and a potential integrator, is introduced and suggested as the focus of future research initiatives within supply chain measurements. Article type: case study. Keywords: Supply chain, Measurement, Systems integration, Performance measurement. Content Indicators: Research Implications** Practice Implications** Originality** Readability** International Journal of Physical Distribution & Logistics Management Volume 30 Number 10 2000 pp. 847-868 Copyright © MCB University Press ISSN 0960-0035 Introduction Background The interest in managing supply chains is growing rapidly among companies around the world. Major forces behind this development are increasing competitive pressure and a belief that working cooperatively in supply chains can create a competitive advantage. Firms abandon the old antagonistic approach to doing business in favor of a more integrative management style focused on coordinating activities along the supply chain in order to attain or sustain their competitive position. Coordinating activities in a supply chain, however, is difficult. The difficulties are partly due to the complexity induced by the large number of related and interdependent activities in the supply chain. The fact that the effects of certain actions are separated from their cause both in time and place increases complexity, and is made even worse by the functional division of responsibility along the supply chain. Understanding the interdependencies and the complex causal relationships in a supply chain is therefore crucial to the successful management of these activities. It is important to realize that what you do not understand, you cannot manage. Systems thinking offers a method for describing and analyzing problems in such contexts, and is therefore well suited to solving the complex and dynamic socioeconomic problems found in logistics systems today. However, the problems reported by many organizations show that the use of systems thinking is insufficiently developed, although it has been with us for several decades. Senge (1992) elaborates on this theme, and claims that firms seem more concerned with detail - as opposed to dynamic - complexity. If firms deal only with detail complexity, they are obstructed from seeing how relations of different kinds reach beyond their own firms and change over time. The nature of the problems reported indicates that many organizations act as autonomous units instead of components of a larger system, and thus neglect the width and scope of their interdependencies with other firms. Unfortunately, the lack of systems thinking also influences how firms approach another important area: the design of performance measurement systems. A performance measurement system plays an important role in managing a business as it provides the information necessary for decision making and actions. Although this area has been pointed out many times as strategically important, it still is not sufficiently understood (Keebler et al., 1999; Atkinson et al., 1997; Vitale and Mavrinac, 1995; Eccles, 1991). The lack of systems thinking becomes especially disturbing when measurement systems are applied to supply chains. Purpose The purpose of this article is to explain supply chain performance measurement problems from a systems perspective. One important objective is to show if and how the problems are a result of insufficient systems thinking. Given the exploratory nature of this article, areas for future research are suggested in order to contribute to the body of knowledge within logistics. Method This article is based on an extensive literature review across disciplines such as management, quality and logistics, in addition to observations from a case study of six firms composing part of a supply chain in the home furnishing business in Sweden. IKEA, a multinational company in the home furnishing business, acted as host, providing access to organizations within IKEA as well as to suppliers of finished goods. Several echelons of the supply chain were included, ranging from retail outlet stores