Performance Measurement Systems : pre-conditions & implementation process for manufacturers moving downstream

Abstract: Manufacturers have in recent years become more and more aware of the benefits of offering more comprehensive value propositions. As the economic climate changes, more manufacturers are trying to capture value further downstream in the value chain by providing services. The field of performance management has been extensively adopted in production and the benefits of performance measurement have been widely praised both in literature and in business. The literature on performance management has also extended into service management and how to manage service performance. But how can performance measurement and performance measurement systems be implemented when the line between products and services becomes more and more unclear? Over a twenty week period, the researchers have studied, analyzed, and observed the procedures at Scania CV’s maintenance development and delivery organization. The study was conducted on Scania’s premises in Södertälje, Sweden. Scania’s Preventative Maintenance Development group develops and sets the requirements for the preventative maintenance programs Scania offers to its customers. The group had a desire to track and measure what effects changes made in the maintenance program have on the customer’s life cycle profit. At Scania’s Preventative Maintenance Development group, there is a developed performance measurement system, MPI-model, consisting of maintenance performance indicators (MPIs). The current MPI-model, however, lacks practical applicability. The master thesis has aimed at investigating how the MPI-model could be implemented in the preventative maintenance development by researching what criteria are set in literature for performance measures, how existing resources can be employed, and how performance measurement systems can be used. Apart from conducting a case study, in order to investigate how performance measurement systems could be implemented, an extensive literature review was also conducted to provide the necessary theoretical knowledge. The result of the study was a proposed three-step model that clarifies the requirements for the implementation of a performance measurement system.