An analysis of performance measures in manufacturing and the development of an improved framework: Case of Ethiopian selected manufacturing industries
الموضوعات :Yitagesu Yilma Goshu 1 , Daniel Kitaw Azene 2
1 - Addis Ababa Science and Technology University, College of Engineering, Addis Ababa, Ethiopian.
2 - School of Mechanical and Industrial Engineering, Addis Ababa University, Addis Ababa, Ethiopia.
الکلمات المفتاحية: Performance measures, performance measurement, framework, manufacturing Industries, performance improvement, sustainable measurement,
ملخص المقالة :
The purpose of this study is to investigate the existing performance measurement practices of selected manufacturing industries and put forward an improved solution for better company performance measurement and improvement system. Both quantitative and qualitative research approaches have been used to investigate and solve problems related to the current measurement and improvement systems. The data was collected from 135 companies of large and medium sized manufacturing companies using questionnaire, backed by semi-structured interview and observation for validation purpose. The finding shows the existing performance measurement practice has serious problems in measures design, implementation, use and dynamically updating of the performance measurement system. Poor data quality for the formulation and update of strategies, poor alignment of measures, low information accuracy, inadequate measures coverage for relevant stakeholders and high measures sub-optimization were among the major characteristics of the existing PM practice. A methodological framework for Performance Measurement System (PMS) has been developed to address the identified problem. The framework bases on the principles of Stakeholder theory, network theory and corporate social responsibility, which provided the foundation needed to develop PMS that looks at the whole picture, keeps ever-changing conditions in focus, and supports sustainable growth for companies under dynamic conditions.
Akyuz, G. A. & Erkan, T. E., 2010. Supply chain performance measurement: a literature review. International Journal of Production Research, 48(17), p. 5137–5155 .
Atkinson, A., Waterhouse, J. & Wells, R., 1997. A stakeholder approach to strategic performance measurement. Sloan Management Review, 38(3), pp. 25-37.
Banks, R. & Wheelwright, S., 1979. Operations versus strategy – trading tomorrow fortoday. Harvard Business Review May-June, pp. 112-20., Issue May-June, pp. 112-120.
Bititci, U., Garengo, P., Dörfler, V. & Nudurupati, S., 2012. Performance Measurement:Challenges for Tomorrow. International Journal of Management Review, Volume 14, p. 305–327.
Bititci, U., Garengo, P., Dörfler, V. & Nudurupati, S., 2012. Performance Measurement:Challenges for Tomorrow. International Journal of Management Review, Volume 14, pp. 307-327.
Bititci, U. S., Carrie, A. S. & McDevitt, L., 1997. Integrated performance measurement systems: an audit anddevelopment guide. The TQM Magazine, 9(1), pp. 46 - 53.
Bourne, M. et al., 2000. Designing, implementing and updating performance measurement systems. International Journal of Operations & Production Management, 20(1), pp. 754-771.
Bourne, M., Neely, A., Ken, P. & John, M., 2002. The success and failure of Performance Management Initiatives: Perceptions of participating managers. InternationalJournal of Operations and Production Management, 22(11), pp. 1288-1310..
Braz, R. G., Scavarda, L. F. & Martins, R. A., 2011. Reviewing and improving performance measurement systems: An action research. International Journal of Production Economics, Volume 133, p. 751–760.
Camp, R., 1989. Benchmarking – the Search for Industry Best Practices that Lead to Superior Performance. ASQS Quality Press, Milwaukee, WI..
Carroll, A. B., 1999. Corporate Social Responsibility:Evolution of a Definitional Construct. Business & Society, 38(3), pp. 268-295.
Choong, K. K., 2014. The fundamentals of performance measurement systems. International Journal of Productivity and Performance Management , 63(7), pp. 879 - 922.
CSA, 2014. The Central Statistical Agency. [Online]
Available at: http://www.csa.gov.et/images/documents/pdf_files/nationalstatisticsabstract/2012/ma.pdf
[Accessed 24 December 2015].
Dev, R. A., 2010. Human resource development (HRD) for performance management The case of Nepalese organizations. International Journal of Productivity and Performance Management, 59(4), pp. 306-324.
Fernández-del-Río, E., Vázquez-Casielles, R. & Díaz-Martín, A. M., 2019. Performance measurement models in hospitality firms: A systematic review. International Journal of Hospitality Management, Volume 82, pp. 89-100.
Foroughi, C. K. et al., 2023. Near-perfect automation: Investigating performance, trust, and visual attention allocation. , 65(4),. Human factors, 65(4), pp. 546-561.
Franco, M. & Bourne, M., 2003. Factors that play a role in ``managing through measures’’. Management Decision, 41(8), pp. 698-710.
Franco-Santos, M., Lucianetti, L. & Bourne, M., 2012. Contemporary performance measurement systems: A review of their consequences and a framework for research. Management Accounting Research, Volume 23, Issue 2, June 2012, Pages 79–19, 23(2), pp. 79-119.
Freeman, R. E., 2010. Strategic management: A stakeholder Approach. online version ed. Newyork: Cambridge University press.
Friedman, A. & Miles, S., 2006. Stakeholders: Theory and Practice. s.l.:Oxford University Press.
Ghalayini, A. M. & Noble, J. S., 1996. The changing basis of performance measurement. International Journal of Operations & Production Management, 16(8), pp. 63-80.
Goshu, Y. Y. & Daniel, K., 2017. Performance measurement and its recent challenge: a literature review. International Journal of Business Performance Management, 18(4), pp. 381-402.
Grünberg, T., 2007. Performance Improvement -A Method To Support Performance Improvement In Industrial Operations. A Doctoral Thesis ed. Stockholm, Sweden: Royal Institute of Technology.
Gupta, H. et al., 2021. Enablers to supply chain performance on the basis of digitization technologies. Industrial Management & Data Systems, 121(9), pp. 1915-1938.
Hall, R., 1983. Zero Inventories. Dow-Jones Irwin, Homewood, IL..
Hauser, J. & Katz, G., 1998. Metrics: you are what you measure!. European Management Journal, 16(5), pp. 517-528.
Hayes, R. & Abernathy, W., 1980. Managing our way to economic decline. HarvardBusiness Review, Issue July-August, pp. 67-77.
Iacobucci, D. & Duhache, A., 2003. Advancing alpha: Measuring reliability with confidence. Journal of consumer psychology, 13(4), pp. 478-487.
Izraelevitz, A. B., Trajcevski, G. & Zhang, Y., 2019. A conceptual framework for data quality in performance measurement of digital biograph vision PET/CT systems. Journal of Medical Systems, 43(2), pp. 1-12.
Kamble, S. S., Gunasekaran, A., Ghadge, A. & Raut, R., 220. A performance measurement system for industry 4.0 enabled smart manufacturing system in SMMEs-A review and empirical investigation. International journal of production economics, p. 229.
Kaplan, R. & Norton, D., 1992. The balanced scorecard – measures that drive performance. Harvard Business Review, Issue January-February, pp. 71-79.
Kaplan, R. & Norton, D., 2006. Alignment: Using the Balanced Scorecard to Create Corporate Synergies. Boston, MA.: Harvard Business School Press.
Kaplan, R. S. & Norton, D. P., 1996. The Balanced Scorecard: Translating Strategy into Action. s.l.:Harvard Business School Press.
Kaplan, R. S. & Norton, D. P., 2005. The Balanced Scorecard: Measures That Drive Performance. Harvard Business Review, Issue 2005, July-August.
Kennerley, M. & Neely, A., 2003. Measuring performance in a changing business environment. International Journal of Operations & Production Management, 23(2), pp. 213-229.
Kueng, P., Meier, A. & Wettstein, T., 2001. Performance Measurement Systems Must be Engineered. Communications of the Association for Information Systems, 7(Article 3).
Lebas, M. J., 1995. Performance measurement and performance management". Intemational Joumal of Production Economics, Volume 41, pp. 23-35.
Lee, C.-L. & Yang, H.-J., 2011. Organization structure, competition and performance measurement systems and their joint effects on performance. Management Accounting Research, Volume 22, pp. 84-104.
Locke, E. & Latham, G., 1989. A Theory of Goal Setting and Task Performance. New York: Prentice Hall.
Lynch, R. & Cross, K., 1991. Measure Up - The Essential Guide to Measuring Business Performance. Mandarin, London.: s.n.
Marcon Nora, G. A., Alberton, A. & Ayala, D. H. F., 2023. Stakeholder theory and actor‐network theory: The stakeholder engagement in energy transitions. Business Strategy and the Environment, 32(1), pp. 673-685.
Martini, A. & Suardana, K. H., 2019. Developing a performance measurement model for sustainable development strategy implementation. Procedia Manufacturing, Volume 33, pp. 566-573.
Maskell, B., 1989. Performance measures of world class manufacturing. Management Accounting, Volume May, pp. 32-33.
Maurice, G., 2005. An empirical study of performance measurement in manufacturing firms. International Journal of Productivity and Performance Management, 54(5/6), pp. 419-437.
Medori, D. & Steeple, D., 2000. A framework for auditing and enhancing performance measurement systems. International Journal of Operations & Production Management, 20(5), pp. 520-533.
Mio, C. C. A. & Panfilo, S., 2022. Performance measurement tools for sustainable business: A systematic literature review on the sustainability balanced scorecard use. Corporate social responsibility and environmental management, 29(2), pp. 367-38.
Najmi, M., John, R. & Ip-Shing, F., 2005. A framework to review performance measurement systems. Business Process Management Journal., 11(2), pp. 109-122.
Neely, A., 1999. The performance measurement revolution: why now and what next?. International Journal of Operations & Production Management, 19(2), pp. 205-228.
Neely, A., 1999. The performance measurement revolution: why now and what next?. International Journal of Operations & Production Management, 19(2), pp. 205-228.
Neely, A., 2007. Business Performance Measurement: Theory and Practice. 2nd ed. Cambridge: Cambridge University Press.
Neely, A., 2007. Business Performance Measurement: Unifying theories and integrating practice. 2nd ed. Newyork: CAMBRIDGE UNIVERSITY PRESS.
Neely, A., Gregory, M. & Platts, K., 1995. Performance measurement system design. International Journal of Operations & Production Management, 15(4), pp. 80-116.
Neely, A., Ken, P. & G. M., 1995. Performance measurement system design. International Journal of Operations & Production Management, 15(4), pp. 80-116.
Neely, A., Mike, G. & Ken, P., 2005. Performance measurement system design A literature review and research agenda. International Journal of Operations & Production Management, 25(12), pp. 1228-1263.
Neely, A. et al., 2000. Performance measurement system design: developing and testingaprocess-basedapproach. International Journal of Operations & Production Management, 20(10), pp. 1119-1145.
Owen-Smith, J., 1961. OECD. [Online]
Available at: https://www.oecd.org/sti/inno/41858618.pdf
[Accessed 2 May 2016].
Papalexandris, A., Ioannou, G., Prastacos, G. & Soderquist, K., 2005. An integrated methodology for putting the balanced scorecard into action. European Management Journa, 23(2), pp. 214-227.
Paranjape, B., Rossiter, M. & Pantano, V., 2006. Performance measurement systems: successes, failures and future – a review. MEASURING BUSINESS EXCELLENCE, 10(3), pp. 4-14.
Richard, P. J., Devinney, T. M., Yip, G. S. & Jhonson, G., 2009. Measuring Organizational Performanec: Towards Methodological Best Practice. Journal of Management, 35(3), pp. 718-804.
Rogers, S., 1990. Performance Management in Local Government. Longman, London, UK: s.n.
Romphol, N. & Boon-itt, S., 2012. Measuring the success of a performance measurement system in Thai firms. International Journal of Productivity and Performance Management, 61(5), pp. 548-562.
Said, E. & Rabia, N., 2009. How much does performance matter in strategic decision making?. International Journal of Productivity and Performance Management, 58(5), pp. 437-459.
Saraph, J., Benson, P. & Schroeder, R., 1989. An instrument for measuring the critical factors of quality management. Decision Sciences, 20(4), pp. 810-829.
Sethi, S. P., 1975. Dimensions of corporate social performance: An analytic framework. California Management Review, 17(3), pp. 58-64.
Shahin, A. & Mahbod, M. A., 2007. Prioritization of key performance indicators An integration of analytical hierarchy process and goal setting. International Journal of Productivity and Performance Management, 56(3), pp. 226-240.
Silva, S., Anne-Katrin, N. & Stefan, S., 2019. Stakeholder expectations on sustainability performance measurement and assessment. A systematic literature review.". Journal of Cleaner production, Volume 217 , pp. 204-215.
Skinner, W., 1974. The decline, fall, and renewal of manufacturing. Industrial Engineering, Issue October, pp. 32-8..
Speckbacher, G., Bischof, J. & Pfeiffer, T., 2003. A Descriptive Analysis for the Implementation of Balanced Scorecards in German-speaking Countries. Management Accounting Research, Volume 14, pp. 361-387.
Sun, C.-C., 2010. A performance evaluation model by integrating fuzzy AHP and fuzzy TOPSIS methods 37 (2010). Expert Systems with Applications, 37(12), p. 7745–7754.
Tangen, S., 2004. Evaluation and Revision of Performance Measurement Systems. A Doctoral Thesis ed. Stockholm, Sweden : Royal Institute of Technology.
Tangen, S., 2005. Analysing the requirements of performance measurement systems. Measuring Business Excellence, 9(4), pp. 46 - 54.
Tangen, S., 2005. Demystifying Performance and Productivity. Tangen, S. (2005) International Journal of Productivity and Performance Management, 54(1).
Tangen, S., 2005. Demystifying Performance and Productivity. International Journal of Productivity and Performance Management, 54(1), pp. 34-36.
Taouab, O. & Issor, S., 2019. Performance measurement models: A literature review. International Journal of Innovation and Sustainable Development, 13(3-4), pp. 388-406.
Tätilä, J., Helkiö, P. & Holmström, J., 2014. Exploring the performance effects of performance measurement system use in maintenance process. Journal of Quality in Maintenance Engineering, 20(4), pp. 377-401.
Yitagesu, Y. & Daniel, K., 2016. Performance Measurement Systems in Developing Countries: Ethiopian Manufacturing Organizations Focused Studies. International Journal of Scientific and Engineering Research , 7(8), pp. ISSN 2229-5518.
