The Use of Industrial Performance Measurements : A Case Study of a Manufacturing Organization

University essay from KTH/Skolan för industriell teknik och management (ITM)

Abstract: Performance measurements are used as evaluation tools in manufacturing organizations. The use of performance measurements should provide useful information regarding organizational performance. A challenge for manufacturing organizations is to translate the performance in an organization to quantifiable measures. Another challenge is to understand the potential of performance measurements to induce change. There are also requirements of the measures to be followed-up, in order for manufacturing organizations to go towards its objectives. Change and communication are another challenges for different departments within industrial organizations, because demands are faced for communication in order to optimize performance measurements. In this master thesis, a case study with a qualitative approach was conducted with the purpose of investigate the role of internal communication in the change of performance measurements systems in a manufacturing organization. A list of performance measurement has previously been provided and updated in the manufacturing organization. 14 employees within the manufacturing organization were interviewed regarding opinions of the performance measurements of the new implemented list. Furthermore, during the interviews the employees gave its opinions of how to follow-up the performance measurements. The employees also discussed how the communication is between the Manufacturing Engineering (ME) and the Product department in the manufacturing organization. The findings in the thesis show that after change in the organization clearer definition of performance measurements is essential. To have clear definition could lead to an increased understanding of how to optimize performance measurements. Furthermore, the findings show that effective communication between departments in manufacturing organizations can influence the performance measurement to be improved. The thesis firstly argues for the manufacturing organization to provide employees with a clearer definition of the performance measurements of the list with the performance measurements. Secondly, to have different follow-up processes of the performance measurements depending on the project the measures are applied to. Thirdly, the thesis argues for the development of communication to create a regular meeting place for the employees between the departments. The benefits of meeting these three arguments are for the manufacturing organization to improve its performance measurements.

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