PENGUKURAN KINERJA

PERTEMUAN KULIAH KE 3 5
NEW MODELS OF
PERFORMANCE MEASUREMENT SYSTEM
Performance Measurement Questionnaire

SMART System

Balanced Scorecard

Cambridge Model

Integrated Performance Measurement System
TRADITIONAL
PERFORMANCE MEASUREMENT SYSTEM:
Lack of relevance
Lagging metrics
Short-termism
Inflexible
Does not foster improvement
Cost distortion
Traditional performance measurement systems produce information
that are too late, too aggregate, and too distorted to be relevant for
managers planning and control decisions (Kaplan and Johnson)
PERFORMANCE MEASUREMENT FOR
WORLD CLASS MANUFACTURING
(Brian Maskell)
they are directly related to manufacturing strategy
they primarily use non-financial measures
they vary between locations
they change over times as needs change
they are simple and easy to use
they provide fast feedback to operators and managers
they are intended to foster improvement rather than
just monitor
PERFORMANCE CRITERIA SYSTEM
(Shlomo Globerson)

The value of P.C must be the same for the same
performance
P.C must be derived from the companys objective
They make it possible to compare organisations which
are in the same business
Their purpose is clear

Data collection and calculation method are clearly defined
Ratio P.C are preferred to absolute numbers
P.C should be under the control of the evaluated
organisational unit
Objective P.C are preferred to subjective P.C

PERFORMANCE MEASUREMENT QUESTI ONNAI RES
(Dixon, Nanni, and Vollmann)
management level and manufacturing affiliation
of the respondents to examine the degree of
consensus among managerial levels and functional
areas
Questionnaire I I :
Questionnaire I :
the relative degree of importance of improvement
area
to the extent the current performance measures
support or inhibit the improvement in the area
Questionnaire I I I : the degree of importance of achieving excellence in
performance factors or measures for the long-run health
of the company
the company current emphasises on performance measures
Questionnaire I V :
the most important measures against which respondents
individual performance should be judged
EXAMPLE OF QUESTIONNAIRE II
How Much Long-Run
Improvement Is Required?
IMPROVEMENT AREAS
Do Current Performance
Measures Support Improvement
RELIABILITY OF PRODUCTS IN FIELD

COMPETITIVENESS OF COMPANY PRICES

ABILITY TO MEET PROMISED DELIVERY DATES

ABILITY TO SATISFY CUSTOMER REQUESTS
1 2 3 4 5 6 7

1 2 3 4 5 6 7

1 2 3 4 5 6 7

1 2 3 4 5 6 7



NONE
GREAT
INHIBIT
SUPPORT
1 2 3 4 5 6 7

1 2 3 4 5 6 7

1 2 3 4 5 6 7

1 2 3 4 5 6 7



GENERIC IMPROVEMENT AREAS
QUALITY
LABOUR EFFICIENCY
MACHINE EFFICIENCY
NEW PRODUCT INTRODUCTION
VOLUME FLEXIBILITY
PRODUCT MIX FLEXIBILITY
PRODUCT TECHNOLOGY
PROCESS TECHNOLOGY
MANUFACTURING THROUGHPUT TIMES
INTEGRATION WITH SUPPLIERS
INTEGRATION WITH CUSTOMERS
INFORMATION SYSTEMS
DIRECT COST REDUCTION
OVERHEAD COST REDUCTION
INVENTORY MANAGEMENT
JOB RESPONSIBILITIES
PERFORMANCE MEASUREMENT
CUSTOMER SATISFACTION
ENVIRONMENTAL CONTROL
MANUFACTURING STRATEGY
PROCUREMENT PRACTICES
OFFSHORE MANUFACTURING
CIM
EDUCATION AND TRAINING
QUESTIONNAIRES III
Relative Importance
to the Company
Performance Factors
Emphasis of
Measurement
Inventory turnover

Conformance to specification

Cost of quality
1 2 3 4 5 6 7

1 2 3 4 5 6 7

1 2 3 4 5 6 7


Very
Unimportant
Very
Important
No
Emphasis
Major
Emphasis
1 2 3 4 5 6 7

1 2 3 4 5 6 7

1 2 3 4 5 6 7


PERFORMANCE MEASUREMENT QUESTI ONNAI RES
ANALYSI S
Alignment analysis : to identify to the extent to which a companys strategy,
actions, and measures line up with each others
IMPROVEMENT AREAS
Alignment of Improvement Areas (Actions) with Strategy
Top Quartile Bottom Quartile
New product introduction
Customer satisfaction
Product technology
Quality
Integration with customers
Manufacturing throughput time
Job responsibility
Machine efficiency
Direct cost reduction
Environmental control
Labour efficiency
Offshore manufacturing
Congruence analysis : to provide a detailed look at how well the
measurement system supports an organisations
actions and strategy through gap and false alarm
signal
Importance= high
Support = low
Gap = Importance - Support
Importance = low
Support = high
False Alarm = Importance - Support
Consensus analysis : to contrast the perceptions between hierarchical
levels and across functional organisations about
the importance of improvement area and performance
measures (ranking the means)
Importance
High
Low
Division Plant Middle Supervisor
Consensus across management level of Indirect Labour Productivity
Confusion analysis : to determine the relative extent of consensus in
opinions on each improvement area and performance
factor item within a group
(ranking the standard deviations)
IMPROVEMENT AREAS
Top and Bottom Quartiles of Strategies and Ranks of Standard Deviations
Top Quartile Bottom Quartile
New product introduction (24)
Customer satisfaction (19)
Product technology (23)
Quality (16)
Integration with customers (22)
Manufacturing throughput time (21)
Job responsibility (9)
Machine efficiency (4)
Direct cost reduction (5)
Environmental control (3)
Labour efficiency (1)
Offshore manufacturing (2)
Financial
Perspective
Objectives
Measures
Targets
Initiatives
1 2 3
Learning and Growth
Perspective
Objectives
Measures
Targets
Initiatives
1 2 3
Customer
Perspective
Objectives
Measures
Targets
Initiatives
1 2 3
Internal Business Process
Perspective
Objectives
Measures
Targets
Initiatives
1 2 3
Business Strategy
To succeed financially,
how should we appear
to our shareholders?.
To satisfy our
shareholders
and customers,
what business
processes must
we excel at?.
To achieve our
vision,how will we
sustain our ability to
change and improve
To achieve our
vision, how should
we appear to our
customers?.
BALANCED SCORECARD
(Kaplan and Norton)
Part 1
Grouping Products
Part2
Agreeing business
objectives
Part 3
Agreeing performance
measures for the
business objectives
Part 4
Mapping performance
measures and activities
Part 7
Sign off
Part 5
Evaluating options
- which of these are
key?
Part 6
Agreeing performance
measures for the key
activities
Part 8
Implementation
and ongoing
management
CAMBRIDGE MODEL
(Andy Neely)
INTEGRATED
PERFORMANCE MEASUREMENT SYSTEM
(Centre for Strategic Manufacturing)
The Business
Business Units
Business Processes
Activities
IPMS BUSINESS STRUCTURE
The Business
Business Units
Business Processes
Activities
Stakeholders
Objectives
Measures
Business Units
Business Unit Classification, RONA,
ROI, Performance Measures Classi-
fication
External Monitor
Stakeholders
External Monitor
Objectives
Measures
The Business
EFQM, Financial Models, RONA and ROI trees, etc.
Stakeholders
External Monitor
Objectives
Measures
Stakeholders
External Monitor
Objectives
Measures
Stakeholders
External Monitor
Objectives
Measures
Business Units
Business Units Classification, RONA/ROI Tress,
Performance Measures Classifications
Systems Classification,
Performance Measures Classification
Systems Classification,
Performance Measures Classification
Business Processes
Activities
Framework Performance Prism
Framework Performance Prism (2)
APPLYING THE PERFORMANCE PRISM TO
MEASURES DESIGN
Five distinct, but logically interlinked, perspectives on performance
have been identified together with five key questions for
measurement design:
Stakeholder Satisfaction who are the key stakeholders and what
do they want and need?
Strategies what strategies do we have to put in place to satisfy
the wants and needs of these key stakeholders?
Processes what critical processes do we require if we are to
execute these strategies?
Capabilities what capabilities do we need to operate and
enhance these processes?
Stakeholder Contribution what contributions do we require from
our stakeholders if we are to maintain and develop these
capabilities?

Stakeholder and Organization Wants and
Needs (1):
Company Objectives:
- Improve OTD
- Develop Employee PM
Target
Setting
Company Target:
- OTD = 100 %
-Employee PM Finish 2001
Objectives
Deployment
Target
Deployment
Department Objectives :
- Train Employee (HRM)
- Develop PM (Dev. M)
Department Target :
- Train Emp. Ratio = 25%
-Employee PM Finish 2001
Resources
Bargaining
Define
Activity
Activity Plan:
- Develop training plan
- Set up project team
Resources Requirement:
- No Additional Res. Req.
- Hire 2 programmers
- Hire 1 business analyst
Last year performance
(Improvement Programmes):
- On Time Delivery (OTD)
Strategic plan:
2001Develop Employee PM
Business environment
changes:
- 2000 Local players
- Foreign players
Objectives
Setting
Performance Planning PT. X
Performance Accomplishment PT. X
Progress Reports :
- Training report
- Software dev. report
Activity Plan
Execution :
- Develop training plan
- Set up project tim
Activity Plan:
- Develop training plan
- Set up project team
Resources
Deployment :
- Allocate 2 programmers and 1
business analyst (additional) to
System Development
Department
Resources
Requirement:
- No Additional Res. Req.
- Hire 2 programmer
- Hire 1 business analyst
Performance Measurement PT. X
Balanced Scorecard
Model
Identification of
Key Performance Indicator (KPI)
Corporate, Business Units
Key Performance Indicator
Corporate, Business Unit
Performance Reports
Corporate, B. Unit,
B.Process, Activity
Activity Plan
- Routines
- Improvements
Company
Target
Department
Target
Performance Measurement
Key Performance Indicator
B. Process, Activity
Identification of
Key Performance Indicator (KPI)
Business Process, Activity
Business Process
Map
Performance Review
Performance Problems