Assessing the Process Performance Measurement of Lilac Manufacturing
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Date
2022-06
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Addis Ababa University
Abstract
Corporate performance management is one of the defining elements of leadership within an organization, particularly in the manufacturing business sector. It deals with the concept of how to measure and manage the activities and performances in an organization and identifies the key areas which need focus in order to achieve goals set in the strategic planning. This research focuses on one of the perspectives of corporate performance measurement, operational perspective. It deals with identifying the gaps and assessing the current process performance measurement tools set in Lilac Manufacturing. (Wade 2001) expresses that the process architecture (which is one of the three architectures of an organization) must measure five fundamental elements in order to assure the ideal process performance in an organization, these elements are; Cost, Cycle-Time, Quality, Quantity, and Conformance to Standard while setting KPIs and CSFs to maintain those elements level of success. In conducting this research, the five gap areas of process performance measurement of Lilac Manufacturing was assessed as the main goal was to identify and understand the extent to which manufacturing company has been able to implement corporate performance management and how those metrics are put in place while describing the misalignment that pertains in comparison to the theoretical description of process performance measurement. The gaps were identified in each of those measurement tool which were assess through the quantitative and qualitative data collected and analyzed using questionnaire and interview of employees and management. Using a descriptive approach, the research was able to assess and describe the differences and misalignments that exist between the theories and the practical measurement being used in the company. The research ultimately assessed these gaps and their viable recommendations; Cost measurement can be managed using Activity-Based Costing (ABC), Cycle Time management can be attained using JIT and OPT approach, Quality and Standard Conformance can be better managed using Six Sigma approach (DMAIC), and KPIs and CSFs must focus on those tools while adopting best practices and Balance Score Card alongside a development of a process map.
Keywords: cost, cycle-time, quantity, quality, conformance to standards, KPIs, and CSFs