Models,methods and tools for interorganizational logistics operations

Enterprise modelling is today one of the key techniques to improve the performances of an enterprise. This paper first defines enterprise modelling techniques as compared to BPR techniques. Then the latest developments in GRAI methodology are presented. Finally, examples of industrial applications are presented for three methods: GIM (GRAI Integrated Method) for re-engineering, GIMSOFT for the choice of an ERP software package and ECOGRAI for the design and implementation of performance indicator system.     

Association of DEA super-efficiency estimates with financial ratios: Investigating the case for Chinese banks

The great majority of applications of the popular frontier technique data envelopment analysis (DEA) do not test for the association of efficiency estimates with key performance indicators used by industry observers. Nevertheless, identifying efficiency estimates’ associations with commonly accepted financial measures of performance could guide benchmarking activities, pricing decisions, and regulatory monitoring. Thus, the current paper investigates to what extent bank DEA super-efficiency estimates are associated with key financial ratios. A low correlation may present an opportunity to address inefficiencies that were not obvious in financial ratio analysis, thus enabling an update of inferences drawn from ratios. Regressing ratios on efficiency estimates may also help predict financial ratios. Where an input–output specification is comprised of key financial ratios, DEA can also be used to objectively identify benchmarks for ratio analysis based on actual observed data collected from peers. Nine super-efficiency DEA formulations across two profitability models are systematically tested. The slacks-based measure of DEA with a parsimonious profitability efficiency model emerges as the most significant combination explaining the variation in the two industry ratios, post-tax profit/average total assets and return on average equity.     

Effect of best management practices on the performance and productivity of small firms

Abstract

Recent research on productivity finds that best management practices are a crucial but neglected element in explaining firm productivity. This stream of research also focuses on why a large number of firms may not implement best management practices despite their apparent benefits. In this paper, we examine the adoption of best management practices in small leveraged buyout (LBO) firms. Our choice of small LBO is motivated by the fact that these firms undergo extensive restructuring and, therefore, there is an opportunity to study the adoption process of best management practices. The findings show that buyout companies introduce best management practices (operations, monitoring, targets and incentive-related practices) at different stages of their development, and more importantly, these practices evolve in response to changes in various firm-level characteristics. For example, companies emphasizing cost leadership tend to follow targets and monitoring related practices while firms following a differentiation strategy are more likely to implement incentives and operations related management practices. Buyout sponsors’ board representatives and new CEO also play a critical role in the adoption of these best management practices which are linked to superior firm performance, measured as growth in revenues, productivity and return on assets.     

A decomposition technique for quantifying real process performance

A decomposition technique for quantifying the impacts of changes in product mix and process performance on aggregate process-related indicators is presented. Through application of the technique, the real performance of a process can be quantified. Changes in real performance over time can be monitored to provide useful information for process evaluation and production planning. Two case studies, one related to the aggregate defective rate for an assembly line of an integrated circuit fabrication plant and the other to the aggregate inventory turnover for a tyre distribution company, are presented to illustrate the application of the technique.     

Examining the Effects of Feedback Accuracy and Timing on Skill Acquisition

ABSTRACT

Feedback involves providing information about past performance and indicating how to improve future performance. Although the literature contains numerous examples of feedback as an effective method for improving performance across a range of organizational settings, much remains unknown about the specifics of how feedback acts to change behavior. This study evaluated the combined effects of feedback accuracy (100%, 80%, 20%) and timing (feedback following each trial or after a block of 25 trials) on skill acquisition in undergraduate students when presented with a computerized match-to-sample task that required participants to learn the names of shapes. Results reveal that feedback accuracy had a significantly greater effect on performance than the timing of the feedback.     

The contribution of measurement and information infrastructure to TQM success

There is currently some debate about which TQM practices contribute most to superior performance outcomes. Several proponents argue that softer TQM practices such as leadership, human resource management, and customer focus have more impact than benchmarking, process analysis or performance measurement. The evidence for which TQM factors contribute most to improved performance is not yet conclusive, and sometimes contradictory. Using data from a longitudinal study of 67 TQM firms we contribute to this debate. Our central hypothesis is that measurement of key TQM practices and performance outcomes is essential for TQM success. We examine the measurement practices of this cohort of firms, and report on the changes in their measurement behavior over time. Specifically, we analyze seven dimensions of measurement relating to customer satisfaction, employee satisfaction, process performance, impact of TQM on costs, impact of TQM on sales, self-assessment, and benchmarking. We calculate a measurement-intensity score for each firm, based on how many of these seven parameters were being measured, and we show that increased measurement intensity is strongly associated with perceived TQM success. Finally, using multivariate discriminant analysis, we identify eight variables that explain the level of TQM success with a classification accuracy of almost 90%. We conclude that to attain the highest levels of TQM success, firms need to engage in the measurement practices of self-assessment and benchmarking, but our data suggest that an appropriate measurement framework needs to be in place beforehand.     

The application of a performance management system in hospitals: A hypothetical example

Abstract

The central theme of this article is performance management, defined as activities of organizations aimed at an effective and efficient use of their human resources. The organization focused on in particular is the hospital. Three principles taken from motivation theory are dealt with which are basic to performance management: goal setting, feedback and reinforcement. Next, a recently developed procedure (Pritchard 1990, Pritchard et al. 1988, 1989) for the design of performance management systems is described. This procedure, ProMES: Productivity Measurement and Enhancement Systems, is explained using a team of ward nurses as a hypothetical example. In addition to the nursing wards example, other potential applications of the ProMES technique to several hospitals areas are mentioned. Finally, some conditions that should be fulfilled in order to successfully start a ProMES project are discussed.     

Benchmarking Labour Market Performances and Policies

The recent EU initiatives on employment policy and the “Luxembourg employment strategy” underscore the relevance of benchmarking as an instrument for improving labour market performance and labour policy effectiveness. This paper presents the major results of a research project aimed at exploring the application of benchmarking techniques to convergence between the European labour markets. After synthetically describing the development of benchmarking techniques in the private and the public sectors, the paper addresses the crucial question of defining labour market performance and presents the possibility of creating labour market performance and policy benchmarks through the construction of efficiency frontiers. A second possibility explored is the radar-chart approach, a presentation technique that allows both for single dimension and overall performance monitoring. The paper then faces the problem of broadening the scope of benchmarking from the identification of benchmarks to the understanding of performance gaps through more comprehensive analytical tools. In this area, useful contributions are provided by the employment systems and the transitional labour markets approaches. The concluding section stresses the role of normative decisions, as well as the possible political challenges implied by a thorough application of benchmarking techniques to labour market convergence.     

Is there potential in assessing for high-potential? Evaluating the relationships between performance ratings,leadership assessment data,designated high-potential status and promotion outcomes in a global organization

While leadership is a critical component of organizational success, organizations need to be more effective at classifying talent based on future potential vs current performance. This need raises the question as to whether the assessment of leadership potential is truly adding value or enhancing the talent review and classification process. Data from 9,784 participants in PepsiCo’s Leadership Assessment and Development (LeAD) program—a multi-trait, multi-method (MTMM) assessment and development process—are used to examine relationships between individual performance, assessed potential, organizationally designated potential, and promotion rates post assessment. Results from the analyses indicate that assessed potential provides unique variance above performance alone in determining process outcomes (i.e., designated potential and promotions), and therefore can be useful for making more informed talent management decisions. The applications of these measures within the current organization as well as limitations of the study and areas for future research are discussed.     

Incorporating quality into data envelopment analysis of nursing home performance: A case study

When using data envelopment analysis (DEA) as a benchmarking technique for nursing homes, it is essential to include measures of the quality of care. We survey applications where quality has been incorporated into DEA models and consider the concerns that arise when the results show that quality measures have been effectively ignored. Three modeling techniques are identified that address these concerns. Each of these techniques requires some input from management as to the proper emphasis to be placed on the quality aspect of performance. We report the results of a case study in which we apply these techniques to a DEA model of nursing home performance. We examine in depth not only the resulting efficiency scores, but also the benchmark sets and the weights given to the input and output measures. We find that two of the techniques are effective in insuring that DEA results discriminate between high and low quality performance.     

Performance and burnout in intensive care units

Abstract

The relationship between three different performance measures and burnout was explored in 20 Dutch Intensive Care Units (ICUs). Burnout (i.e. emotional exhaustion and depersonalization) proved to be significantly related to nurses' perceptions of performance as well as to objectively assessed unit performance. Subjective performance measures relate negatively to burnout levels of nurses, whereas an objective performance measure relates positively to burnout. Furthermore, subjectively assessed personal performance (i.e. personal accomplishment) is more strongly related to burnout than subjectively assessed unit performance. A model test of the relationship between both types of subjective performance and burnout reveals that nurses' perception of unit performance is indirectly related to burnout through perception of personal performance. This model holds similarly for objectively well- and poor-performing ICUs.     

An empirical assessment of the operational performance through internal benchmarking: a case of a global logistics firm

This article solves an operational performance measurement problem of a global logistics firm through an internal benchmarking tool. The intended impact is to enable logistics firms to form a deeper understanding of their own internal processes and metrics. The methodology of this in-depth action research involves a sequential approach with a series of interviews, questionnaire-based surveys, operations data collated through observations and process mapping yielding real-world data. A series of statistical tests are conducted to analyse the collated data. Strategic priorities of the firm are integrated with the firm’s operational performance to ascertain the effective performance by considering both the tangible and intangible measures. The outcomes inform both practitioners and academics how the firm could improve its freight forwarding business’s profitability by ensuring that its operations meet the prioritised criteria. The ‘best practice’ derived from internal benchmarking forms an intermediate step towards external benchmarking. The outcomes facilitate investigating the current business strategy, the standard operating procedures and the scope of improving those.     

Global product development projects: measuring performance and monitoring the risks

Abstract

This article investigates the development and application of key performance indicators for global product development. Two in-depth, longitudinal case studies with multinational Danish manufacturing companies were conducted, and highlight how key performance indicators, typically used for collocated, cross-functional product development, do not provide the predictive insight required to avoid the additional risks encountered in the global product development environment. Grounded in the case study results and building on established methodologies in performance measurement literature, a framework was developed and validated in two additional Danish companies to support project managers to develop: preventive indicators, which support the avoidance of identified risks, and outcome indicators, which support the measurement towards the attainment of project objectives. The study is unique as it is one of the very few longitudinal studies of engineering design activities in a global context, providing the in-depth contextual understanding towards key risks and their influence on performance; an important step to support researchers and practitioners with the development of preventive measures.     

Common benchmarking and ranking of units with DEA

This paper develops a common framework for benchmarking and ranking units with DEA. In many DEA applications, decision making units (DMUs) experience similar circumstances, so benchmarking analyses in those situations should identify common best practices in their management plans. We propose a DEA-based approach for the benchmarking to be used when there is no need (nor wish) to allow for individual circumstances of the DMUs. This approach identifies a common best practice frontier as the facet of the DEA efficient frontier spanned by the technically efficient DMUs in a common reference group. The common reference group is selected as that which provides the closest targets. A model is developed which allows us to deal not only with the setting of targets but also with the measurement of efficiency, because we can define efficiency scores of the DMUs by using the common set of weights (CSW) it provides. Since these weights are common to all the DMUs, the resulting efficiency scores can be used to derive a ranking of units. We discuss the existence of alternative optimal solutions for the CSW and find the range of possible rankings for each DMU which would result from considering all these alternate optima. These ranking ranges allow us to gain insight into the robustness of the rankings.     

Application of TOC/OPT rules in a medium sized shop

Abstract

Abstract. Theory of constraints (TOC) and optimized production technology (OPT) are frequently presented as the better options for production control systems. Despite this enthusiasm, there is very little literature on how these principles can be implemented in practice without having to resort to the expensive proprietary software. In this paper we present a case study in which the OPT/TOC ideas were implemented without using the software. Management's major concern was reduction of work in process and increased delivery performance. It was decided to test whether the ideas of OPT/TOC were applicable in this environment and more importantly to which extent these two performance measures could be improved. The paper reports on the methodology used to test the OPT/TOC ideas in this shop and presents some early results of improvement, as well as some new problems which arose due to the new approach.     

Exploring the Effects of Cultural Variables in the Implementation of Behavior-Based Safety in Two Organizations

Abstract

The present case study examines how culture can influence behavior-based safety in different organizational settings and how behavior-based safety can impact different organizational cultures. Behavior-based safety processes implemented in two culturally diverse work settings are described. Specifically, despite identical implementation plans, similarities and differences in the actual implementation of the two behavior-based safety processes are presented with an emphasis on the effects of employee-driven decisions. Data on both implementations and outcome measures are provided. The results are discussed with respect to the potential impact of specific cultural variables.     

On-shift and daily variations in self-report and performance measures in rotating-shift and permanent night nurses

Abstract

An intensive study was conducted of the influence of type of shift system, type of shift, and time-into-shift on a battery of on-shift and daily measures obtained from 61 female nurses over a 28-day period. Thirty-two rotating-shift nurses and 28 permanent night nurses recorded data on a hand-held computer at the start and end of each day, and every 2-h during their shifts. The measures included a sleep diary, self-ratings of mood, workload, and personal disruption, and two cognitive performance tasks. These results suggest that the permanent night nurses were no worse off and for some measures were actually better off than the rotating-shift nurses after controlling for differences in age and shiftwork experience; the night-shift was problematic for the rotating-shift nurses but so was the early shift; mood deteriorated and reaction time got slower over the course of the night-shift but extra long responses (which may correspond to lapses of attention) and rated workload were lower on the night-shift. The relatively large number of consecutive night-shifts worked by the rotating-shift nurses, the uneven distribution of workload between shifts, and the long night-shift may have contributed to these results.     

DEVELOPING SOPHISTICATED QUALITY IMPROVEMENT APPROACHES THROUGH BUSINESS-ACADEME COLLABORATIONS: INTRODUCTION TO THE SPECIAL ISSUE

The pursuit of better performance has led to a number of business-academe collaborations. These collaborators have developed a number of sophisticated approaches that go far beyond such traditional simple methods as benchmarking against the best company, Ishikawa diagrams on feedback and control, Pareto diagrams, incentive systems based solely on output or quality, standard process control charts, and separate treatment of control charts and product inspection. The authors in this special issue report on approaches like benchmarking industrial performance through industry studies; the use of an artificial-intelligence statistical-tree growing method to analyze complex customer service data; an incentive system based on the total quality management (TQM) concepts of continuous improvement, teamwork, adaptation to change, and a focus on customer satisfaction; and integration of product inspection and process control. Because of the continuing widespread interest in TQM, there is an opportunity to take stock of how successful TQM initiatives have been and how we should consolidate and further extend the knowledge in TQM. Two of the papers report on the gap between what organizations espouse as TQM and what they actually implement and on the literature on TQM.