Kw Platts

Performance measurement system design: A literature review and research agenda

The importance of performance measurement has long been recognized by academics and practitioners from a variety of functional disciplines. Seeks to bring together this diverse body of knowledge into a coherent whole. To ensure that the key issues are identified, focuses on the process of performance measurement system design, rather than the detail of specific measures. Following a comprehensive review of the literature, proposes a research agenda.

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.

Manufacturing Audit in the Process of Strategy Formulation

The need to develop manufacturing strategies which are consistent with and supportive of overall business strategies is now widely accepted. A manufacturing audit approach which has been found useful in the process of manufacturing strategy formulation is described. Within manufacturing strategy, the need for a manufacturing audit is identified and the current approaches to audit are reviewed. These existing approaches do not provide an adequate audit process for use in strategy formulation. A structured audit approach based on established frameworks is developed and preliminary results of its use are presented. The approach has been successfully used in several companies; however, there is need for further work in looking at the social aspects of the process.

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.

A Process Approach to Researching Manufacturing Strategy

Research into manufacturing strategy is increasing in popularity but there are no well established research methodologies which are specific to the field. Briefly reviews current methodologies, identifies their shortcomings, and notes areas for improvement. Then discusses a research methodology which was developed to address these. This three‐stage methodology has been successfully applied to the process of formulating manufacturing strategy and suggests that similar methodologies might be appropriate for future strategy research.

Developing a framework for make‐or‐buy decisions

The make‐or‐buy question represents a fundamental dilemma faced by many companies. Companies have finite resources and cannot always afford to have all manufacturing technologies in‐house. This has resulted in an increasing awareness of the importance of make‐or‐buy decisions. This paper reports on the development of a make‐or‐buy framework to address the make‐or‐buy decision for either a specific individual part or family of parts. Firstly, a literature review of the principal make‐or‐buy approaches is discussed. Secondly, the development of a make‐or‐buy framework is described and the framework is explained and illustrated using case studies. Thirdly, the operationalisation of the framework is outlined. The paper concludes with a discussion of its contribution to both the academic understanding of the subject, and the improvement of industrial practice.