Performance Measurement In Industry Research Articles

Industrial Performance Measurement Systems Coherence: A Comparative Analysis of Current Methodologies, Validation and Introduction to Key Activity Indicators

This paper discusses and integrates the concept of complexity in the industrial performance measurement and management systems (PMM) theory, providing a comprehensive overview of the different methodologies used within the decision systems research area. It also discusses the importance of introducing Key Activity Indicators (KAI) within PMM, specifically related to the Operations and Supply Chain management research and industrial areas. Moreover, it provides validation of the methodology through a case study concerning the production environment of a multinational pharmaceutical company. The main research objective is to design appropriate industrial PMM systems with the aim of increasing the industrial efficiency and effectiveness of manufacturing and service organizations. An analysis of the central industrial performance measurement systems design methods is conducted, classifying them into macro-categories and conducting a comparative study. Based on the analysis of the different proposed methods, organisations will be able to choose the best one based on their needs to design effective decision systems. The research work allows organisations to evaluate, assess, and design effective industrial performance measurement systems. Moreover, the proposed methodology can be easily integrated within an Industry 4.0 context, and benefit from the digitalization environment to obtain continuous feedback on the effectiveness of the industrial PMM.

Assessing the Performance Value of the Baldrige Journey: A Comparison of Baldrige Applicants and Nonapplicants.

The national Baldrige program has supported performance excellence in healthcare since 1999. Previous studies have compared the performance of Baldrige hospital recipients to nonrecipients. This study, however, sought to address the question of whether the mere pursuit of the Baldrige award provides value. This study used propensity score matching with linear and quantile regression techniques to understand the impact of hospitals applying the Baldrige Excellence Framework across a comprehensive set of standardized industry performance measures, regardless of award recognition. The analysis demonstrated that Baldrige applicants outperformed non-Baldrige applicants in select operational measures of efficiency (such as inpatient average length of stay), patient experience, and financial measures (including return on net assets, days in accounts receivable, and expenses as a percentage of patient revenues). However, there was no statistically significant difference in clinical performance between Baldrige applicants and nonapplicants. The findings from this study suggest that hospital leaders can realize significant gains with select operational and financial measures without compromising clinical outcomes when applying the Baldrige Excellence Framework to their organizations.

Intelligent supply chain performance measurement in Industry 4.0

AbstractThe concept of Industry 4.0 has been widely recognized by the world since its introduction in 2011 Hannover Industrial Expo. Industry 4.0 strategy does not only revolutionize the manufacturing system and processes but also lead to the formation of the intelligent supply chain. Currently, Industry 4.0‐based intelligent supply chain has attracted a lot of attention from academia; however, studies on performance measurement indicator of intelligent supply chain are still lacking. To fill this gap, this paper first introduces the impact of Industry 4.0 on supply chain management. After analysing key characteristics of intelligent supply chain, the paper proposes a performance measurement indicator framework consisting of seven indicators. This indicator framework enriches the theoretical knowledge of supply chain performance evaluation and provides an efficient way to improve the operational performance of intelligent supply chain management.

Design of Batik Crafts Industrial Performance Measurement Model in Wukirsari Region Bantul

One important factor in influencing the progress and decline of an industry is the performance factor. Performance issues are not only important for middle-to-upper-level companies and large companies, but also important for small and medium industries such as the batik craft industry in the Wukirsari region, Bantul. Given the importance of performance, researchers tried to design a performance measurement model of the batik craft industry in the Wukirsari region, Bantul with the aim of identifying performance criteria, determining performance indicators, formulating performance indicators, and making performance measurement instruments. The steps in this study are divided into four phases, namely the initial research phase and problem formulation, the design phase, the analysis phase and the conclusion phase. The initial research phase and problem formulation include, the profile of the batik craft industry in the Wukirsari region, Bantul, the current performance evaluation system, problem formulation and research objectives. The design phase includes the design process of the performance measurement model with the Balanced Scorecard method which includes setting strategic objectives, establishing performance indicators (key performance indicators), determining performance indicator formulas, making performance measurement instruments. Analysis phase includes KPI analysis and strategy map analysis. Conclusion phase includes conclusions from the results of research and suggestions for the batik craft industry in Wukirsari, Bantul. From the results of the study obtained four performance perspectives based on the balanced scorecard, namely financial, customer, internal business processes, learning and growth. five, namely: increased sales growth, high customer satisfaction, improved system and better work processes, the creation of a good work climate, and increased employee productivity.There are seven performance indicators formed, namely: the rate of sales growth, the level of customer satisfaction, level of compliance with customer complaints, percentage of defective products, number of new products, level of job satisfaction, and employee productivity. The establishment of a performance measurement worksheet, so that the performance values of each performance indicator and total performance can be known in a certain period.Keywords: Performance, Measurement, Batik

Evaluation of overall equipment effectiveness in the beverage industry: a case study

Overall equipment effectiveness (OEE) is a well-accepted measure of performance in industry. This study investigates the relationship between the factory management and the operation of the limoncello production line. The analysis of failure and repair data of the line over a period of 8 months was carried out. Descriptive statistics at machine and at line level were computed. In addition, the components availability (A), performance efficiency (PE), and quality rate (QR) of the OEE were calculated. Failure and repair data analysis identify the critical points of the production process that need immediate action to improve the operation of the line. Results show that the components PE and QR should be improved immediately to optimise the productivity and the efficiency of the line. It can also be utilised in the beverage industry sector by the machinery manufacturers and the manufacturers of bottled products to improve the design and operation management of the bottling production lines.

Global Lodging Trends Have Unique Regional Flairs

This series of articles has historically focused on the U.S. lodging market. To say the travel industry is becoming more global is merely stating the obvious. What is truly astounding is the extent to which the global lodging industry moves in tandem with the overall travel industry. There is no doubt that anytime we talk about the lodging industry, we are actually talking about a street corner business. For any one property, trends can vary widely between local and regional competitors and have little similarity with overall travel trends. In looking at a variety of markets within the United States, we also see a variety of trends, with some markets expanding while others are shrinking. It becomes even more apparent when looking at the global lodging industry. Entire markets, countries, and regions of the world tend to operate with no apparent similarity between each other. Therefore, the entire concept of “global lodging trends” is somewhat misleading because there is an incredible range in performance between properties, whether they are located next door or on the other side of Earth from one another. However, there is valuable information to be obtained by looking at the aggregate performance of the industry in various regions of the world. Several years ago, STR brought together The Bench and Deloitte’s Hotel Benchmark division to create STR Global. Since that time, we have worked diligently to build a representative sample of participating properties in most of the major global markets we cover. While sufficient, our sample outside the United States still falls well below the coverage we maintain inside the United States. At this time, we collect data from more than twelve thousand properties representing approximately two million rooms outside of North America. This sample is more than sufficient to validate reliable results, but we are still unable to stratify the sample according to the industry’s composition as thoroughly as we would like. Therefore, when comparing U.S. data with the data compiled from around the world, please keep in mind that while the results were not compiled exactly the same, they are still highly accurate and reliable. The most important point is that we now have a consistent global sample dating several years that enables us to track trends in the key industry performance measures. Please keep these caveats in mind as I attempt to provide an overview of the global lodging industry. While I will mention a few specific markets, in general, my comments pertain to Europe, the Middle East/Africa, and Asia/Pacific. Starting with global supply growth, it appears the U.S. lodging industry is something of an anomaly. Since 2005, the U.S. room supply growth rates have changed dramatically, with room supply changes ranging from a decline of 0.1 percent to an increase of 3 percent from year-earlier levels for a compound annual growth rate of 2 percent. In sharp contrast, room supply in Europe ranged from a low of 1.1 percent to a high of 1.2 percent, which clearly demonstrates the continent’s incredibly consistent supply growth. In the Asia/Pacific region, room supply growth ranged from a low of 2.8 percent to a high of 3.8 percent. In the Middle East and Africa, room supply growth has been particularly robust growing around 2 percent per year in 2006 and 2007 and gradually increasing to a 5.1-percent growth rate by mid-2010. Clearly the U.S. lodging market experiences volatility in supply change that is virtually unheard of elsewhere around the word. Room demand figures clearly indicate that it is indeed a global economy. As shown in the accompanying chart, while changes in room demand did vary around the world, it was mostly a timing issue. Starting in 2006, room demand growth has remained fairly consistent in Europe and in the Asia/Pacific region; it declined gradually in the United States; and it grew rapidly in the Middle East/Africa region after a sharp decline in 2006. However, by mid-2008 room demand was drifting downward around the world. By the fall of 2008, room demand actually began to decline in the United States, Europe, and the Asia/Pacific regions only to be followed about six months later with declines in the Middle East/Africa region. While hotels in the Asia/Pacific region bottomed out first, within a few months demand was beginning to improve around the world. Properties in the Asia/Pacific region continued to report very strong demand growth throughout 2010, reaching a peak of 13 percent year over the year in October. Since that time, room demand growth has either stabilized (Europe and the United States) or declined sharply. There are several issues in various parts of the world that will continue to hamper short-term demand growth. In Europe, the impact of the global recession continues to be

IPO underpricing, signaling, and property returns

This paper investigates whether IPO signals reveal proprietary information about the prospects of an issuing firm’s underlying industry. By analyzing a sample of European property company (EPC) IPOs from 1997 to 2007, we take advantage of a heterogeneous set of industry performance measures, i.e., yields and total returns of direct property investments in various European property markets that can be clearly assigned to each individual IPO. The results reveal that the main signal of interest, underpricing, is in fact positively related to average property yields for a 12-month post-IPO period; a result that supports our assumption. Other signals, as proposed in previous research, do not appear to contain any information about the prospects of the IPO firm’s target property investment market. We also show that total returns seem to be a biased measure for direct property performance. Further tests for the signaling model’s preconditioned presence of information asymmetry among EPCs reveal that underpricing levels are a function of company-specific ex ante uncertainty proxies. In contrast, property-specific ex ante uncertainty proxies do not explain underpricing levels.

Statistical Comparison of Passenger Trip Delay and Flight Delay Metrics

The primary objective of the National Airspace System (NAS) is the transportation of passengers and cargo. Since passenger trip time performance is positively correlated with passenger satisfaction, airfare elasticity, and airline profits, it follows that the evaluation of performance and modernization of the NAS, as well as consumer protection, should be based on passenger trip performance (in addition to airline flight performance). Publicly available regulatory measures of NAS performance, however, are based on flight data and not passenger trip data. Researchers have demonstrated that the trip delays experienced by passengers disrupted by missed connections, canceled flights, and diverted flights are not negligible. Further, research demonstrated that flight delays are a poor proxy for measuring passenger trip delays. A comparative statistical analysis is described between flight delay data and estimated passenger trip delay data for 1 year's worth of flights on the 1,030 single-segment routes between the 35 [airports of FAA's Operational Evolution Partnership (OEP)]. The estimated passenger trip data are derived from publicly available databases and account for delays experienced by passengers on single-segment routes because of canceled flights as well as delayed flights. The statistical analysis indicates that (a) the estimated percentage of on-time passengers is equal to the percentage of on-time flights plus the percentage of canceled flights, (b) the estimated average passenger trip delay is 34 min in excess of the average flight delay, and (c) estimated average passenger trip delay for the worst 5% of delayed passengers is 150 min in excess of the flight delay. The implications of these results for consumers, industry performance measures, and FAA modernization efforts are discussed.

Industrial performance measurement: an approach based on the aggregation of unipolar or bipolar expressions

Industrial performance concerns numerous criteria, often in interaction and of complex nature, not related to one elementary measure. Performance-measurement systems (PMSs) have been developed to support decision-making for reaching the objectives and launching adequate action plans. PMSs thus provide performance expressions which identify objective satisfaction degrees. Two kinds of performance expressions are useful in industrial problems, according to the scale (unipolar, bipolar) that is used for their definition. Moreover, these expressions generally have to be synthesized for global control purposes, and determining an overall performance raises the issue of performance aggregation. To address such an aggregation issue, adequate multi-criteria methods need to be implemented. Most of the approaches proposed in the literature either do not provide explicit mechanisms, or rely on overly simple methods. This paper deals with the definition of a performance combination based on mathematical tools, especially the generalized Choquet integral to take into account, on the one hand, criteria interactions and, on the other hand, both unipolar and bipolar scales. An application to a PMS for the service rate of a SME producing kitchen elements is used to illustrate the approach.

Information aggregation in industrial performance measurement: rationales, issues and definitions

Industrial performance can be defined in terms of numerous criteria to be synthesized for global control purposes, many of them being of a complex nature, i.e. not related to one elementary physical measure. In this context, determining a global performance expression raises the issue of performance expression aggregation. To address such an aggregation issue, so-called performance measurement systems need to be implemented. The analysis of the corresponding literature leads to the conclusion that the majority of the proposed approaches either do not provide explicit aggregation mechanisms or propose overly simplistic methods really to cope with the complexity of the situations at hand. Only a few consider explicit adequate aggregation methods. Therefore, a thorough characterization of performance expression aggregation based on four stages, namely extraction, representation, combination and interpretation, as proposed by the information aggregation community is presented. The contribution deals with the definition of a performance expression combination based on two kinds of performance expressions commonly encountered (physical measures and performance evaluations, i.e. objective satisfaction degrees). Methodological guidelines for performance expression aggregation are proposed as well as associated mathematical tools, especially the fuzzy Choquet integral for taking criteria interactions into account. An industrial case study is used as an illustration, and some concluding remarks and emerging problems to be considered in the future, such as temporal aggregation, are finally pointed out.

Value Structure Analysis and Process‐Derived Performance Metrics for Shipbuilding

ABSTRACT The highly competitive international merchant ship market compels shipbuilders to deliver competitive value to their customers. U.S. naval ship construction, however, takes place within a different type of business climate. In this environment, economic competition is constrained and value can only be assured by directly measuring it. In this paper, the problems associated with various existing value assessment methods applied to naval shipbuilding are discussed. It is found that a bottom‐up, process‐based approach is the key to naval shipbuilding value assessment.The first step in building a process‐derived industrial performance measurement system is to identify the appropriate discrete processes and build them into a value chain model. It was found that the standard value chain breakdown method could not adequately account for all of the relevant shipbuilding strategy variables, therefore a new multi‐dimensional value chain breakdown was developed. Concurrent with the collection of value chain data, performance metrics for each process are being formulated. Analysis of individual process performance in the context of corporate strategies as documented in the value chain will enable a roll‐up of performance and value from bottom to top, i.e. from individual processes through to the total shipbuilding outcome.

High-tech capital formation and economic performance in U.S. manufacturing industries An exploratory analysis

To what extent have investments in ‘high-tech’ office and information technology capital ‘delivered’ in terms of reducing costs and facilitating productivity growth? In this paper we explore relationships between industry performance measures and investments in high-tech office and information technology capital for two-digit manufacturing industries from 1968 through 1986. We find limited evidence of a positive relationship between profitability and the share of high-tech capital in the total physical capital stock ( OF K ). However, we find that increases in OF K are negatively correlated with multi-factor productivity and tend to be labor-using. We also find some evidence that industries with a higher proportion of high-tech capital have higher measures of economic performance, although within industries increasing OF K does not appear to improve economic performance.