nd Business Management. © WBW ... Measurement and Management System ... June 2016. Page 4. PMM. System. Characteristics of PMM-Systems. N. O. S. W ...
MOTSP 2016 DI Bernd Kleindienst Porec, 01.06.2016
© WBW, Kleindienst
June 2016
Page 1
Chair of Economic- and Business Management
Participatory Development of a Performance Measurement and Management System
Criticism of traditional accounting based measurement systems
Performance Measurement and Management System (PMMS) In practice • Only partly used • Not designed in the way intended by the literature • Not able to exploid their full potential • Impact on organizational performance contractionary results
© WBW, Kleindienst
June 2016
Page 2
Chair of Economic- and Business Management
Initial Situation
Development and Implementation Process Has big effect on success or failure of a PMM-initiative (Möller et al., 2015)
Problems within this process main reason why PMMinitiatives fail (Neely & Bourne, 2000) Chair of Economic- and Business Management
Existing design and implementation processes: (Neely et al., 2000; Bourne et al., 2003a; Schreyer, 2007; Lohmann et al., 2004; Nudurupati et al. 2011)
Only partial processes, imprecise and not described in detail Lack change management aspects Little advise on the implementation Tools and techniques assisting the process are missing
Need for more detailed description of the process (Schreyer, 2007)
© WBW, Kleindienst
June 2016
Page 3
Chair of Economic- and Business Management
Characteristics of PMM-Systems
PMM System N O W S
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June 2016
Page 4
KPI... Key Performance Indicator
Preparation
Concept
Refine
Pilot
• Define objectives and scope of the PMM initiative
• Questionnaires / interviews
• Check availability of data and effort for KPI collection
• Implementation in pilot area
• Refine KPIs
• Collect data and visualize PMM dashboard
• Specify project team • Make a project plan • Evaluate existing system and documents • Start the PMM initiative © WBW, Kleindienst
• Identify critical success factors • Set perspectives for the dashboard
• Adopt PMMsystem
• Choose KPIs
• Detailed definition of KPIs
• Adopt PMMsystem
• Prepare KPI spec sheets and a PMMS guideline
• Determine next steps
• Identify relationship between KPIs • Develop reporting process
June 2016
• Lessons Learned
Page 5
Chair of Economic- and Business Management
The Development and Implementation Process
The four fields of coordination Strategy Stakeholder requirements Key business activities Strategic orientation Targets & Measures Effectiveness
• Operational and organizational structure • Fine-tuning of business activities • Efficiency
Culture • • • •
Organizational culture Values and principles Overcoming resistance Change
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Chair of Economic- and Business Management
• • • • •
Structure
Data • • • •
June 2016
Quality and timeliness of data Gathering information Information management Communication processes
Page 6
Chair of Economic- and Business Management
Change process during the development and implementation
© WBW, Kleindienst
June 2016
(Kleindienst & Biedermann, 2016) Page 7
Preparation
Concept
Refine
Pilot
KPI... Key Performance Indicator
KPI Workshop KPI workshop Clarify initial situation and goals
Dashboard: Perspective 1
Discuss sucess factors
Chair of Economic- and Business Management
KPIs
Perspective 2 KPIs
Identify critical sucess factors (CSFs) Perspective 3
Dervive dashboard perspectives and assign CSFs
KPIs
Perspective 4
Find KPIs for each CSFs
© WBW, Kleindienst
June 2016
KPIs
Page 8
Preparation
Concept
Refine
Pilot
Find KPIs Critical sucess factors Internal Processes OEE Chair of Economic- and Business Management
High machine availability, reduction of waste Highquality products
Cycle time
Reduction of non-value-added time
Customer / Stakeholder Scrap rate
Increasing internal on-time delivery
On-time delivery perf. (internal)
© WBW, Kleindienst
June 2016
Page 9
Preparation
Identify relationship between KPIs
Concept
Pilot
KPI... Key Performance Indicator Product quality is moderate more important than product cost
Nr.
Kriterium/Anforderung
1
2
3
4
5
1
Product costs
1
5
1/3
1/5
1/7
2
Cycle time
1/5
1
1/3
1/3
1/3
3
Product quality
3
3
1
3
5
4
Flexibility
5
3
1/3
1
1/3
5
Delivery capability
7
3
1/5
3
1
Scale:
Importance of the KPIs:
Refine
1 = Equal Importance 3 = Moderate importance 5 = Strong importance 7 = Very strong importance 9 = Extreme importance 2, 4, 6, 8 = Intermediate values
Lower importance Reciprocals of above 1/Scale
Cross-Impact-Analysis: Flexibility has a strong influence on delivery capability KPI (Row affects column)
1
2
3
4
5
Aktive sum
1
Product costs
x
0
3
1
0
4
80 %
2
Cycle time
0
x
0
3
2
5
100 %
3
Product quality
2
0
X
0
1
3
60 %
4
Flexibility
1
0
0
X
3
4
80 %
5
Delivery capability
1
1
0
3
x
5
100 %
4
1
3
7
6
57 %
14 %
43 %
100 %
85 %
Passive sum
KPI 10 KPI 4
Active KPIs
KPI 12
KPI 9
Critical KPIs
KPI 7
KPI 3
KPI 8
Delivery capability has a strong influence on flexibility
0%
Assessment:
0 = No influence 1 = Little influence 2 = Medium influence 3 = Strong influence
KPI 2
KPI 11
Active Strength
No
KPI 5
KPI 6
KPI 1
Chair of Economic- and Business Management
100%
Flexibility is moderate less important than product quality
Indifferent KPIs 0%
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Passive KPIs
Passive Strength June 2016
100% Page 10
Conclusion PMM-systems enable effective analysis, controlling and management of organizations
Systematic development and implementation process can Chair of Economic- and Business Management
increase the likelihood of success
Proposed Model Detailed development and implementation process Uses Insights from change management Involvement of employees Includes several tools which assist the change process
© WBW, Kleindienst
June 2016
Page 11
MOTSP 2016 DI Bernd Kleindienst Porec, 01.06.2016
© WBW, Kleindienst
June 2016
Page 12
Chair of Economic- and Business Management
Participatory Development of a Performance Measurement and Management System
