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Supply chain management has been given much attention, and more and more technologies and concepts have been applied for improving and optimizing supply chain performance. In today industry, however, failure in designing supply chain is not uncommon. One reason for the failure is that there was not an integrated and effective analysis for all parts of supply chain before setting up a new supply chain. There are three main goals for an effective supply chain planning: low cost, high quality and short lead time. Based on the 3 aims, a 2-phase and multiple objectives model for optimizing supply chain performance is presented in this paper. Two new concepts in analysis of supply chain performance are identified and defined: (1) Internal process and External process, which are differentiated by the relation of sets. (2) Each set is separated into 3 flows: Product-Service value flow, control flow and time consume flow, which overcoming Talluri’s model shortcomings: (1) Difficulty in defining model Variables and (2) Complicated computation for Variables. Using this model, the supportive decision can be made to establish the framework of supply chain. This model can also be applied to both the design of value-added activities and the development of partnership with customers/suppliers. A simple illustrative study is conducted to demonstrate how to optimize the performance of supply chain utilizing the methodology proposed in this research.