Development of an integrated performance measurement framework for lean organizations

Abstract

Purpose The purpose of this paper is to propose an integrated performance measurement framework to measure the effect of lean implementation throughout all functions of an organization. Design/methodology/approach The paper identifies the seven categories representing all organizational functions. These categories have been divided into 26 performance dimensions and key performance indicators (KPIs) for each performance dimension have been identified to measure lean performance. The interrelationship of each category with lean principles and/or lean wastes has been identified. KPIs are developed on the basis of identified criteria, frequency analysis of existing literature, and discussion with industry professionals. Finally, an integrated performance measurement framework is proposed. Findings The proposed framework evaluates the organization under seven categories – manufacturing process, new product development (NPD), human resource management, finance, administration, customer management, and supplier management. In total, 26 dimensions and 119 key performance indicators have been identified under the seven categories. Research limitations/implications The proposed framework is a conceptual framework and it is to be tested by empirical and cross-sectional studies. Originality/value The main novelty of the research is that the leanness of the organization has been measured throughout the supply chain of the organization in an integrated way. The various areas of measurement are manufacturing process, NPD, finance, administration, customer management, and supplier management. Further, the proposed KPIs are also categorized as qualitative or quantitative, strategic or operational, social or technical, financial or non-financial, leading or lagging, static or dynamic. This paper contributes to the body of knowledge in performance measurement.

Development of performance measurement system in the context of Industry 4: a case study

“…Raffoni et al (2018) explored the potential of performance management systems and indicated that Business Performance Analytics (BPA) can contribute to identifying critical performance variables, potential sources of risk and related interdependencies. Sangwa and Sangwan (2018) developed performance measurement framework for lean organizations and identified the seven categories representing all organizational functions, dividing into 26 performance dimensions and key performance indicators (KPIs) for each performance dimension in the context of lean principles. Trstenjaka and Cosic (2017) researched a process planning changes in Industry 4.0 environment.…”

“…In relation to the scientific literature review could be stated that different Industry 4.0 clusters have been researched in the context of performance measurement such as Big Data, IoT, analytics digitalization and human -machine interaction (Raffoni et al, 2018;Papadopoulos et al, 2017;Van der Stede, 2016;Schoenherr & Speier-Pero, 2015;Hazen et al, 2014;Waller & Fawcett, 2013). Also it could be noted that the literature is still lacking an understanding of the main changes and developments of performance measurement system in the context of industrial revolution as different studies are fragmented, analyse a separate function of performance measurement (Raffoni et al, 2018;Trstenjaka & Cosic, 2017;Papadopoulos et al, 2017) or are limited to a specific context (Sangwa & Sangwan, 2018). The most commonly used measurement methods were analysed (Table 1) in order to indicate the main functions of performance measurement in business organizations which could allow to research its changes and developments.…”

Hesitant Fuzzy Linguistic Term and TOPSIS to Assess Lean Performance

“…Nowadays, LM covers the multiple stages of a product's life cycle, from its development and manufacturing to its delivery [3]; however, LM is also a challenge amid mass production practices, especially as quality products, and customer satisfaction are prioritized, inventory, time to market and manufacturing space, and everything that adds no value to a product is systematically categorized as waste [4]. LM is often discussed with respect to key performance indicators (KPIs) [5,6]. In addition, Kan et al [7] affirm the KPI parameters have an association with LM performance.…”

تأثیر ممارسة سلسة الإمداد الرشیق على أداء سلسة الإمداد فی قطاع التصنیع بمصر

“…performance measures were selected to evaluate SC performance based on the fact that these measures are the most common measures used in the majority of researches and recent in dates e.g. (Chavez et al, 2013;Taj & Morosan, 2011;Nawanir et al, 2016;Arif-Uz-Zaman & Ahsan, 2014;Ruiz-Benítez et al, 2018;Filho et al, 2016;Sharma et al, 2015;Shah & Ganji, 2017;Prajogo et al, 2016;Khanchanapong et al, 2014;Azfar et al, 2014;Dora et al, 2016;Kumar et al, 2015;Afonso & Cabrita, 2015;Droge et al, 2004, Jacobs et al, 2007Machuca et al, 2011;Rosenzweig et al, 2003;Folinas et al, 2014 ;Sangwa & Sangwan, 2018;Arif-Uz-Zaman & Ahsan, 2014;Behrouzi &Wong, 2011;Chavez et al, 2015). From which, the measures were classified into four different performance attributes (cost, time, quality, flexibility), those attributes are highly common in these researches that have discussed lean practice and performance topics.…”