Jf Mills

Designing, implementing and updating performance measurement systems

This paper addresses issues met when designing, implementing, using and continuously updating performance measurement systems in manufacturing companies. The paper develops, from theory, a framework for analysing the implementation of a performance measurement system and uses this framework to interpret three longitudinal case studies. The paper concludes that specific processes are required to continuously align the performance measurement system with strategy. When these processes are combined with a well defined model of strategic success, the measurement system can enhance the strategic management process by challenging the assumptions and the strategy itself.

Performance measurement system design: developing and testing a process based approach

Describes the development and testing of a structured methodology for the design of performance measurement systems. Frameworks, such as the balanced scorecard and the performance prism, have been proposed, but until recently little attention has been devoted to the question of how these frameworks can be populated, i.e. how managers can decide specifically which measures to adopt. Following a wide ranging review of the performance measurement literature, a framework identifying the desirable characteristics of a performance measurement system design process is developed. This framework provided guidelines which were subsequently used to inform the development of a process‐based approach to performance measurement system design. The process was enhanced and refined during application in three action research projects, involving major UK automotive and aerospace companies. The revised process was then formally documented and tested through six further industrial applications. Finally the process was written up in the form of a workbook and made publicly available.

Designing performance measures: a structured approach

Describes the development and testing of a framework which can assist in the process of designing performance measures. Grounds the framework in the relevant literature and explains how it was developed and tested through a series of action research projects involving collaborators primarily from the aerospace and automotive industries. Notes that inadequately designed performance measures can result in dysfunctional behaviour often due to the method of calculation encouraging individuals to pursue inappropriate courses of action. The performance measure record sheet presented provides a structure which considers factors such as the purpose of the measure and the source of data. Notes the advantages of the record sheet, such as its use to audit existing measures of performance and to facilitate the process of designing new ones.

The success and failure of performance measurement initiatives: Perceptions of participating managers

This paper investigates the success and failure of performance measurement system design interventions in ten companies. In each case, the senior management team was facilitated through a management process to redesign their performance measurement systems. Analysis of the initial pilot case studies suggested three important differences between companies that proceeded to implement the measures agreed during the process and those that did not. Post intervention semi‐structured interviews with the directors and managers directly involved revealed two main perceived drivers of implementation and four perceived factors that block implementation. The results are of specific interest for performance measurement system implementation but have wider implications for our view of management commitment in change management.

Implementing performance measurement systems: a literature review

Currently, there is a great interest in performance measurement, with many companies attempting to implement the balanced scorecard. However, there is also evidence that many of these implementations are not successful. This paper reviews the different performance measurement system design processes published in the literature and creates a framework for comparing alternative approaches. The paper then proceeds to review the literature on performance measurement system implementations and concludes that the performance measurement literature is at the stage of identifying difficulties and pitfalls to be avoided based on practitioner experience with few published research studies. This paper is the first of two, the second going on to consider performance measurement implementation from the point of view of the change management literature.

Realizing Strategy through Measurement

It is widely accepted that firms should have manufacturing strategies consistent with their overall business strategies, but while much has been written about the content of these strategies, little has been said about how they should be developed and realized. Reports on research which set out to investigate the extent to which UK firms seek to influence the realization of their manufacturing strategies through their performance measurement systems. Over 800 small and medium‐sized manufacturing enterprises (SMEs) in the UK were surveyed in late 1992. Analysis of the data suggests that while firms which compete on quality or time place most emphasis on performance measures which match their strategies, those which compete on price do not.

Performance measurement system design: Should process based approaches be adopted?

Abstract Performance measurement system design is a topic of increasing concern to both academics and practitioners but is complicated by its multi-dimensional nature. When designing measurement systems managers need to resolve issues such as: conflicts between performance measures; the appropriate balance of internal and external measures; the linking of measures and strategy; etc. One way of overcoming the inherent complexity of performance measurement system design might be to employ structured design methodologies. This paper reports the preliminary results of a study into the use of structured processes for the design of performance measurement systems in the UK. Over 850 companies from a variety of industries were surveyed and data on the formality of their performance measurement system design processes were collected. The data show that although few firms use structured methodologies for performance measurement system design, those that do often find it significantly easier to: (a) decide what they should be measuring; (b) decide how they are going to measure it; (c) collect the appropriate data and (d) eliminate conflicts in their measurement system.

A framework for the design of manufacturing strategy processes

Proposes a framework for considering the factors relevant to the design of manufacturing strategy processes. The framework is built from manufacturing and business strategy literature through a review which positions popular strategies like Cellular manufacturing, TQM and JIT within more traditional manufacturing strategy frameworks and includes aspects of strategy that have been rarely mentioned in the manufacturing strategy literature. Thus competence, capability, culture and alternative strategy process modes are incorporated and throughout the review potential influences on the design of the strategy process are identified. Finally the framework′s ability to assist the design of a manufacturing strategy process is tested and the dependence of key process elements like the procedure and tools used are shown to be contingent on, for example, the outputs required from the process and the content areas under development.

A strategic review of 'supply networks'

This review aims to provide researchers and managers interested in supply networks with a strategic review of this rapidly expanding field. It does not attempt a comprehensive review of the enormous and fast growing literature but does present the breadth and depth of research and practice in the area. The central aspect of the paper is to suggest that the field can be viewed from four perspectives which all researchers and managers implicitly or explicitly use: upstream, as purchaser; downstream, as supplier; static network, as an auditor of position within its supply network, typically comprising several supply chains, providing a static and comparative view; and dynamic network, as strategist, seeking opportunities to improve the firms position in an existing network or creating a new network, providing a strategic, dynamic and long‐term view.

Testing manufacturing strategy formulation processes

Abstract The process of formulating and implementing manufacturing strategy is one of the key tasks for operations managers; however, it is extremely complex and not well understood. Over the years there have been many attempts to both prescribe and describe strategy formulation processes but the literature on the rigorous testing of prescribed processes is sparse. This paper discusses the testing of one such process for formulating manufacturing strategy, and reports findings. Two aspects are addressed: the initial testing of the process to assess feasibility, usability and utility; and more detailed testing to investigate factors which affect the implementation of the process. This detailed testing is being carried out as a preliminary step to investigating the tailoring of the process to different contextual factors. The paper begins by briefly outlining the strategy formulation process which is under test. This process has been developed in stages since 1987 and has been widely applied in various forms over this period. Having described the process, the paper then discusses testing problems and presents the rationale behind the testing approach chosen.