AN INTEGRATED DYNAMIC PERFORMANCE-MEASUREMENT SYSTEM FOR IMPROVING MANUFACTURING COMPETITIVENESS

Until the 1980s manufacturing companies relied solely on performance m easurement systems based on traditional cost accounting systems to con trol, monitor, and improve their operations. However, it has been show n that these systems do not capture the relevant performance issues fo r today's manufacturing environment. Rather, they focus on monitoring and controlling versus supporting process improvement, promoting overa ll system optimization, and addressing the dynamics of changing system s. In order to overcome the limitations of the traditional performance measurement systems a variety of integrated systems have been propose d. However, these systems have not yet fully addressed the requirement s of a performance measurement system for today's manufacturing enviro nment. This paper presents an integrated dynamic performance measureme nt system (IDPMS) developed in conjunction with the Missouri Plant of Square D Company. The IDPMS integrates three main areas of the company : management, process improvement team, and factory shop floor. To ach ieve an integrated system, the three areas are linked through the spec ification, reporting and dynamic updating of the defined areas of succ ess, performance measures, and performance standards. Three tools are incorporated to support and enhance the integration within the IDPMS. An example is given that illustrates how the IDPMS addresses the curre nt requirements of a performance measurement system.