Manufacturing Performance Measures Research Articles

Evaluation and improvement of manufacturing performance measurement systems ‐ the role of OEE

The paper identifies six requirements: four critical dimensions (what to measure) and two characteristics (how to measure) of an overall manufacturing performance measurement system. The overall equipment effectiveness (OEE) measure in such a system is assessed against these ideal requirements. The current measurement systems, and the potential of OEE, of three manufacturing organisations are evaluated with the dimensions and characteristics as comparative data. A common weakness of the systems was that they did not measure flow orientation or external effectiveness to any great extent. Another weakness was a high degree of complexity and lack of continuous improvement. Field experiments in the studied organisations showed that use of OEE in combination with an open and decentralised organisation design could improve several of those weaknesses.

Behavioural consequences of performance measures in cellular manufacturing

Presents some of the preliminary findings from research which has sought to identify performance drivers in manufacturing cells. A medium‐sized UK automotive component supplier which operates on a JIT basis was used for the research which has also examined the perceived and actual inter‐relationships between cell drivers and the effect of these on goal congruence. The results illustrate a fundamental difference in perception between production manager and the shop floor together with a shared misconception regarding perceived driver interactions. The result is a disjointed performance measurement system which fails to drive the continuous improvement required in the manufacturing cells.

Reliance on manufacturing performance measures, total quality management and organizational performance

Over recent years there has been an increase in global competition, particularly within manufacturing. Many firms faced with increased competition from foreign firms have sought to enhance their competitiveness by employing total quality management (TQM). An important concern in the implementation of TQM is the extent to which TQM should be developed together with managerial performance evaluation systems employing measures of the manufacturing processes. It is argued in this paper that the potential for TQM to enhance the profitability of companies is enhanced when managers are evaluated by using direct measures of manufacturing.The results of a survey of 39 organizational units provided support for the proposition that enhanced performance will be associated with the interaction between well developed TQM programmes and a reliance on manufacturing performance measures. Specifically, higher performance was associated with the combination of TQM and a reliance on manufacturing performance measures compared to TQM without such measures.

Strategies of manufacturing flexibility, manufacturing performance measures and organizational performance: an empirical investigation

Presents a study which seeks to add to the body of knowledge that relates strategies to organizational performance. Examines the role of manufacturing performance measures to evaluate managers’ performance for firms pursuing strategies of manufacturing flexibility. Proposes that enhanced performance will be associated with the interaction between manufacturing flexibility and use of manufacturing performance measures. Sets out the results of a survey of 37 organizational units to provide support for this proposition. Concludes that the performance of entities that had a high degree of manufacturing flexibility were positively associated with the extent to which managers were evaluated using manufacturing performance measurements.

An analytical hierarchy process framework for comparing the overall performance of manufacturing departments

Many authors have suggested including non‐financial measures, besides traditional cost measures, in manufacturing performance measurement systems, in order to control the correct implementation of the manufacturing strategy with respect to all competitive priorities (quality, timeliness, flexibility, dependability, etc.). But the use of non‐financial performance measures makes it difficult to assess and compare the overall effectiveness of each manufacturing department, in terms of support provided to the achievement of the manufacturing strategy, since to this aim it is necessary to integrate performance measures expressed in heterogeneous measurement units. Aims to show the potential of the analytical hierarchy process (AHP) for assessing and comparing the overall manufacturing performance of different departments. Does not report the detailed analytical description of the AHP but focuses on the practical problems and managerial implications related to its application to performance measurement, pointing out also its assumptions and limitations.

Manufacturing measures are still not right!

Investigates research study into performance measures in manufacturing. States the main problem errors are: false alarms; and gaps — the solution being to eliminate the false alarms and fill in the gaps! Measures 12 areas of possible improvement and lists these. Used 92 senior manufacturing executives — 72 from Europe, 8 from Asia, 5 from South America, 4 from Africa and 3 from North America — all of whom had been on IMD's programme prior to mid‐1993. Gives further, deeper explanations of results and recommendations.

A survey and taxonomy of strategy‐related performance measures for manufacturing

Although the topic of manufacturing performance measurement has recently attracted considerable interest, little has been done to enumerate or classify the measures that exist. Lists 125 different strategy‐related measures that were found through a survey of accounting, manufacturing and managerial literature. Develops a taxonomy which categorizes those measures according to competitive priority (cost, quality, flexibility, delivery reliability, or speed), data source (internal or external), data type (objective or subjective), measure reference (self‐referenced or benchmark), and process orientation (process input or process outcome). Finds that the largest number of measures have been proposed for the competitive priority of flexibility and the fewest for delivery reliability. Most measures have focused only on process outcomes using self‐referenced objective data from internal sources. Based on these results, suggests that companies and academic researchers utilize new or different measures to assess adequately strategy‐related manufacturing performance.

The six Ps of manufacturing strategy

The operating definition of manufacturing strategy in published research has often been too restrictive to accommodate the entire gamut of approaches used in practice. In particular, the manufacturing strategies of world class manufacturers do not fit the prevalent planning orientation suggested by many researchers. Claims a multifaceted view of manufacturing strategy is needed to depict accurately the strategic efforts of all manufacturers. Describes six distinct views of the manufacturing strategy: planning, proactiveness, pattern of actions, portfolio of manufacturing capabilities, programmes of improvement, and performance measurement.

A Taxonomy of Manufacturing Strategies

This paper describes the development and analysis of a numerical taxonomy of manufacturing strategies. The taxonomy was developed with standard methods of cluster analysis, and is based on the relative importance attached to eleven competitive capabilities defining the manufacturing task of 164 large American manufacturing business units. Three distinct clusters of manufacturing strategy groups were observed. Though there is an industry effect, all three manufacturing strategy types are observed in various industries. The two main dimensions along which the manufacturing strategy groups differ are the ability of the firms in them to differentiate themselves from competition with their products and services, and the scope of their product lines and markets. A general method for mapping manufacturing strategies on these dimensions is described. For each manufacturing group, the relationships between the competitive capabilities (which describe the manufacturing task), the business context (the business unit strategy), manufacturing activities (manufacturing strategy choices), and manufacturing performance measures are explored and compared.

Quantifying opportunity costs associated with adding manufacturing flexibility

SUMMARY Opportunity costs associated with adding manufacturing flexibility are one of the most important manufacturing performance measures of factory automation. Opportunity costs consist of the nonconventional costs of set-up, part waiting, equipment idle and inventory, which measure product, process, equipment and demand flexibility, respectively. The nonconventional costs are estimated using a computer simulation. An example shows the cost estimation procedure.