Performance measurement systems (PMS) have commonly been applied to evaluate and reward performances at managerial levels, especially in the context of supply chain management. However, evidence suggests that the effective use of PMS can also positively influence the behaviour and improve performance at an operational level. The motivation is to accomplish organisational goals, namely to increase supply chain flexibility by responding to evermore-varying customer demands in a timely manner. The purpose of the study described in this paper was to develop a conceptual framework that adopts performance measures for ex-ante decision-making at an operational level within the supply chain. To guide the research, five questions were asked and subsequently key gaps have been identified. In an attempt to fill the gaps, a case study at a major global brand beverage company has been carried out, and as a result, a conceptual framework of the PMS has been developed. Overall, the research offers a foundation of the applicability and impact of PMS in the supply chain and provides a framework that attends to some of the potential uses of PMS that so far have not been practically applied. The outcomes from the testing indicate that the initial gaps identified in the literature have been addressed and that the framework is judicious with scope for practical applicability. The framework is deemed worthy of further testing in different operational contexts of the supply chain.
IntroductionResearch in the field of performance measurement has drawn on a variety of disciplines, from production and operations management to accounting and management control. Even though the use of performance measurement systems (PMS) is common amongst managers when defining and evaluating the success of strategic goals (Gomes, Yasin, and Lisboa 2011), the equivalent cannot be said for the use of the same systems as ex-ante 1 support tools to drive performance (Grafton, Lillis, and Widener 2010). Furthermore, although research suggests that PMS can positively influence individuals at an operational level, there is little evidence showing how it works in practice. As a consequence, individuals require the right information, at the right time, in the right format and at the right cost, and meeting these requirements remains a challenge (Schuff et al. 2010).The innovation of performance measurement can benefit organisations through the delivery of strategically aligned metrics that facilitate decision-making. Providing decision support frameworks and tools that integrate multiple measures in the evaluation process may reinforce the importance of these measures and thus enhance their efficacy in relation to strategic goals (Franco-Santos, Lucianetti, and Bourne 2012). Recent research suggests organisations have to be flexible in adapting to frequent changes in customer demand especially in fast moving industries (Poon et al. 2011). Adjustments to production system have to be considered within short time periods, and as a consequence, operational level emplo...