Customer-focused and product-line-based manufacturing performance measurement

Until the 1980s, manufacturing companies relied solely on performance measurement systems based on traditional cost accounting systems to control, monitor, and improve operations. However, it has been shown that these systems do not capture the relevant performance issues for today’s manufacturing environment. Pre-80s systems focused on monitoring and controlling instead of supporting process improvements, promoting overall system optimization and addressing the dynamics of changing systems. A variety of integrated systems were proposed to overcome the limitations of the traditional performance measurements systems. However, these systems have not yet fully addressed the performance measurement system requirements for today’s manufacturing environment. This paper presents an integrated dynamic performance measurement system (IDPMS) developed in conjunction with the D Company Plant of Chungli, Taiwan. IDPMS integrates three main areas; company management, process improvement, and the factory shop floor. To achieve an integrated system, these three areas are linked through specifications, reporting and dynamic defined success area updating, performance measures, and performance standards. This study is undertaken to specify the interaction and movement among the three groups in the process from production planning to customer, “planning-manufacturing-customer”. The results from these stages, production planning, manufacturing, and customer service, are integrated. These factors are transformed into measurable, quantitative, and JIT (just-in-time) parameters utilized along with management by objectives (MBO) principles in planning and establishing a manufacturing performance measurement system focused on satisfying both internal and external customers. An example is given that illustrates how the IDPMS addresses the current performance measurement system requirements.

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