PERFORMANCE MEASUREMENT IN A MANUFACTURING COMPANY (THE CASE OF ALFA LAVAL LUND AB)

Abstract: In today's competitive environment and globalized economy, customers are demanding more varieties and better quality products with faster and reliable deliveries. New manufacturing technologies are developing rapidly, resulting in new products, innovations and improvements in the manufacturing process, thus, requiring a proactive approach by organizations. To be proactive, organizations require innovative methods of performance measurement, to assess their progress towards achieving organizational mission, vision and strategic objectives. The recent performance measurement literature has put forward a number of suggestions, recommendations and performance measurement frameworks for manufacturing companies. The purpose of this thesis is to assess the extent to which manufacturing companies are following these prescriptions. This research adopts an exploratory case study approach with a qualitative research method for collecting and analyzing the data. The case chosen in this study is Alfa Laval Lund AB. In this research, the main methods used for data collection are interview, questionnaire and electronic database. The empirical findings were analyzed through identifying themes from the data, by relying on theoretical propositions derived from the literature. In evaluating the organisation’s performance measurement system, Kaplan and Norton’s balanced scorecard was used as an ideal model. The results show that Alfa Laval Lund AB follows the prescriptions of the recent performance measurement literature, thus, increasing its level of performance measurement competence. The concept of performance measurement competence suggests that organizations use measures that fit with their strategy, their organizational structure and the environmental uncertainty that they face. The type of strategy employed by a firm should influence the design of its performance measurement system.