Definition and aggregation of a performance measurement system in three aeronautical workshops using the ECOGRAI method

The requirement for a performance measurement system is essential in order to know the status of the production system and then to improve its control. Focused on research on the control of production systems for 20 years with the development of GRAI methodology, the LAPS/GRAI of University Bordeaux 1 worked for more than 10 years on the definition and the implementation of performance indicator systems through the development of ECOGRAI method and on the aggregation of performance. This paper presents an application of the ECOGRAI method to a workshop inside an aeronautical subcontracting company close to Bordeaux. The first part of the paper will be dedicated to a short presentation of the ECOGRAI method. In particular, we will present six phases of the structured approach and the main tools which are used in the method: the GRAI grid, the coherence panel and the specification sheet and the identity card of the indicators. In the second part, we will present a test case. First, we will present the context of the test case and the objectives that we had to meet. Then we will present the models of the control system and of the physical system through the GRAI grid and actigrams. We will show how we proposed to model the global control of the company and the detailed control of each workshop. Then, we will focus particularly on the way we have identified the performance indicators, based on the objectives and decision variables of the GRAI grid. We will also show how we solved the problem of aggregation of performance in relation to the coordination of decision-making. In the third part, we will detail how we ensured that these indicators were adapted to the control of the workshop and how we ensured their consistency. Finally, we will show to what extent the implementation of the coherent performance indicator system had an impact on the organization and the running of the workshop.     

Strategic monitoring at a chemical company

This article describes the development and introduction of a performance measurement system at the Dutch chemical company DSM. This system aims to measure progress toward strategic objectives and key success factors. As such, it can be regarded as a strategic monitoring device which supplements the customary financial controls. The article outlines the company context, the reasons for developing performance measurement, the development and implementation process and the actual approach adopted and concludes with some practical guidelines based on the experiences gained in this case.     

Purchasing performance management systems: an empirical investigation

This article aims at further developing the purchasing performance management systems (PPMSs) body of knowledge, assuming the wider perspective of the adoption process rather than key performance indicators (KPIs) only. In particular, the research questions are focused on understanding what are the most adopted indicators, what are the key elements characterising the implementation process and what are the differences among different organisational levels and different purchasing categories. The literature provides a framework for classifying purchasing KPIs, identifying the implementation process and the PPMS architecture, thus supporting the empirical research protocol. Nine case studies of large multinationals belonging to different industries are conducted. Empirical evidence shows that companies are still adopting mainly an external perspective, by focusing on performance measurement efforts on suppliers. Widely adopted indicators mainly measure cost, time and quality. However, the purchasing department has acquired an important role within the organisation and new performance indicators have been created; flexibility, innovation and sustainability are becoming increasingly important.     

Strategic performance measurement in a healthcare organisation: A multiple criteria approach based on balanced scorecard

The Balanced Scorecard (BSC) methodology focuses on major critical issues of modern business organisations: the effective measurement of corporate performance and the evaluation of the successful implementation of corporate strategy. Despite the increased adoption of the BSC methodology by numerous business organisations during the last decade, limited case studies concern non-profit organisations (e.g. public sector, educational institutions, healthcare organisations, etc.). The main aim of this study is to present the development of a performance measurement system for public health care organisations, in the context of BSC methodology. The proposed approach considers the distinguished characteristics of the aforementioned sector (e.g. lack of competition, social character of organisations, etc.). The proposed measurement system contains the most important financial performance indicators, as well as non-financial performance indicators that are able to examine the quality of the provided services, the satisfaction of internal and external customers, the self-improvement system of the organisation and the ability of the organisation to adapt and change. These indicators play the role of Key Performance Indicators (KPIs), in the context of BSC methodology. The presented analysis is based on a MCDA approach, where the UTASTAR method is used in order to aggregate the marginal performance of KPIs. This approach is able to take into account the preferences of the management of the organisation regarding the achievement of the defined strategic objectives. The main results of the proposed approach refer to the evaluation of the overall scores for each one of the main dimensions of the BSC methodology (i.e. financial, customer, internal business process, and innovation-learning). These results are able to help the organisation to evaluate and revise its strategy, and generally to adopt modern management approaches in every day practise.     

An early warning system for strategic planning

Early warning indicators, weak or strong signals, alert coefficients, early warning or recognition systems and other terms can be found more and more frequently in the business related literature. Some progress-minded companies have adopted the theory and are about to initiate operational future observation systems, well adjusted to their own objectives. The author points out the significance and the advantages to a company of introducing an early warning or early recognition system and discloses the risks and problems that are associated with an improper implementation. He then outlines the different ways of utilizing the instrument of strategic early recognition for large and medium-sized enterprises.     

Does business model affect accounting choices? An empirical analysis of European listed companies

Financial accounting research increasingly includes business model (BM) constructs, but the ability of financial reporting to capture BM characteristics has not been verified. This study empirically explores the links between BMs and accounting choices by clustering a sample of 103 European listed companies according to an innovative, nonlinear algorithm (self-organizing map) that uses pertinent industrial, strategic, governance, and financial variables to uncover different dimensions of a BM. The authors investigate accounting choices (accounting measurement, accounting treatment, and disclosure level) by companies that belong to the different identified BMs. The analysis of the relations between different company BMs and their accounting choices indicates no significant connections, which offers empirical confirmation of the criticisms regarding the inability of financial reporting to represent (or even consider) a company’s BM. The results suggest further attempt to capture BM in financial reporting, which requires regulators to establish accounting standards that acknowledge the value creation processes of an entity and incentivize managers to represent those processes.     

Assigning migrants to customer contact jobs: a context-specific exploration of the business case for diversity

Ethnic diversity of both their labor forces and customer bases presents a challenge for companies and fuels debate on the business case for diversity: the view that diversity positively impacts firm performance. This study enriches the business case debate by focusing on a particular organizational activity, customer contact. It combines theory from strategic human resource management (SHRM), research on diversity, and research on marketing to analyze what drives companies to assign migrants to customer contact jobs and which performance impacts ensue. We test our hypotheses in data from 338 German business companies. Companies that recognize the value in ethnic diversity and seek to respond to customer diversity are especially likely to assign migrants to customer contact jobs. The analyses reveal a positive impact of migrants in customer contact jobs on company profitability. This impact is enhanced by a broad range of equality and diversity practices and a supportive works council. These moderators have stronger effects than two other moderators related to business strategy: the market served by a company, and its competitive strategy. The paper contributes to SHRM research in general and diversity research in particular through its original examination associating the business case for ethnic diversity with the role of equality and diversity practices and institutions. The study findings can help managers to decide whether to leverage staff ethnic diversity and show that collaboration between HR management and marketing functions is useful to achieve a strategic fit among practices.     

A multi-criteria approach for managing inter-enterprise collaborative relationships

Collaboration amongst enterprises is a common strategy used to increase competitiveness. Thus, enterprises that are collaborating need to define and use performance measurement/management frameworks composed of performance elements (objectives, performance indicators, etc.) that facilitate the management of their activity, as well as monitor their strategy and processes. There are many factors, e.g. trust, interoperability of Information Systems, etc. that need to be managed properly in order to support collaborative success. However, such factors and performance are not usually managed together. Furthermore, these factors and performance elements are interrelated but these influences are commonly overlooked. This paper aims to present an approach based on the Analytic Network Process (ANP) to manage collaborative relationships under an integrated approach by considering not only the inter-enterprise performance elements, but also the factors that influence collaboration. The approach is then applied to a collaborative enterprise network belonging to the renewable energy sector. With this innovative approach, enterprises will obtain significant information for the decision-making process, regarding which are the factors and performance elements that have the greatest impact on their competitiveness, and therefore should be prioritized.     

Sustaining the Financial Value of Global CSR: Reconciling Corporate and Stakeholder Interests in a Less Regulated Environment

In this article we examine the association between corporate social responsibility (CSR) and firm value. This line of research is important since firms continue to invest in CSR even though past studies reveal a limited linkage between financial value and CSR. However, the business case for CSR or “doing good while making a profit,” appears to be advancing within the business ethics literature as a preferred conception of CSR. We conjecture that the greater unification and refinement of both profit maximization and stakeholder interests through corporate acts, not statements alone, will sustain the financial value of CSR in a less regulated global business environment. We study the triangle of what companies say, what companies do, and firm financial performance. We analyze Fortune 250 firms and find a positive association between what companies do based on KLD Research and Analytics, Inc. (KLD) ratings, and what companies state about ethics in their CSR statements. We then employ regression analysis and find that companies’ socially responsible acts are positively associated with overall firm value and financial performance. Yet we do not find a statistically significant association between what companies say regarding ethics in their CSR statements and their financial outcomes. These results suggest that firm value and financial performance is associated with what companies do and not what they say. Our results seem to be driven by multinational corporations (MNCs) and not by non‐MNCs. This is possibly because MNCs generally operate in a less regulated global business environment that often necessitates strong ethical corporate leadership to further stakeholder interests. Overall, these results help reconcile corporate and stakeholder objectives since evidence of a link between financial performance and doing good sustains global CSR.     

Enhancing competitive advantage by constructing supply chains to achieve superior performance

This paper studies the impact of configuring supply chain design strategies on performance using real-world example of aligning different supply chain practices to supply chain strategies to achieve competitive advantage. The paper first carries out a synthesis of literature categorising the supply chain strategies, practices and linking them to contexts and competitive advantage. The paper then uses a case study methodology to explore the process of adjusting supply chain strategies and aligned practices to gain competitive advantage in different contexts. The paper reports two case examples of a leaf tobacco company and a mosquito coil manufacturer from India facing different demand characteristics and implementing different supply chain strategies for enhancing performance objectives. Both companies faced a change in their business environment and competitive priorities. In both the examples, companies used a combination of practices for implementing appropriate supply chain strategies to gain competitive advantage. This paper contributes to the academic discipline of supply chain management through developing theory showing the transition of supply chain strategies for achieving superior performance in different business environments. The paper has wide managerial implications by reporting real-life implementation of different supply chain strategies thus bridging the practice-theory gap.     

The role of business in society

This is one of a series of articles dealing with social and political issues relevant to business. It is intended to present some of the dilemmas which face top management in setting objectives and policies for the business. A number of key issues are isolated, matching economic objectives and social responsibilities, defining the rôle of the huge multi-national company, reconciling the different aims of owners, managers, and employees, etc. Finally the authors pose the problem: how should the modern corporation be controlled to ensure that it operates in the interests of the community at large, as well as the shareholders?     

Corporate planning and management by objectives

Management by Objectives seeks to integrate the company's objectives for profit and growth with the personal goals and satisfaction of managers. The system requires a review of company objectives and an attempt to translate these into key objectives and performance standards to which individual managers are committed. MBO dependes for its success on the existence of a company environment in which the individual can grow and provides a basis for harnessing the human resources of the organization in the achievement of company objectives.     

The Ecological Footprint: A Metric for Corporate Sustainability

From a business perspective, one of the emerging debates is how can businesses contribute to the objectives of sustainable development. This article presents the ecological footprint accounting tool and demonstrates its usefulness in measuring and monitoring corporate sustainability. The application of the ecological footprint is based on a case study of the city of Liverpool whilst its usefulness to businesses is demonstrated with data available in the environmental reports of various companies. For companies, the ecological footprint is able to take a given environmental impact and through its methodology convert this impact into a land measurement (hectares). Once all environmental impacts are considered and measured, the ecological footprint becomes the total area of land required to support a company in terms of the resources they consume and the waste that they produce. An ecological footprint analysis can highlight how near or far a company is from being sustainable and identify those aspects that have the greatest ecological effect. The usefulness of the ecological footprint is the use of a land measurement that enables it to be readily and easily understood by all that have a vested interested in a company's environmental performance. The metaphorical resonance of the ecological footprint is seen as one of a number of powerful attributes.     

Setting objectives in terms of added value

The concept of added value is not new but this paper examines some new aspects of the implications of added value for corporate policy making. Whilst the concept has been recognised as a sound basis for the measurement of performance what implications has it for the wider corporate objectives which are often an accepted part of company policy? The author examines the many different ‘stakeholder’ interests from the point of view of added value and examines some of the implications and limitations of the added value concept to the nonmarketed services such as education and health.The author concludes by examining the implications of use of the added value concept for capital appraisal and investment analysis. In this context the author proposes a broadening of the views taken of capital investment analysis and postulates a number of interesting future avenues for study.     

销售及运营计划（S＆OP）与企业各资源规划系统关系探微

21世纪的竞争是供应链之间的竞争。而销售及运营计划（S＆OP），一个先进、实用、成效显著的决策工具，能够为高层管理者构建随需而动的高效供应链。本文从企业目标层级，内部资源计划体系以及各职能部门的连接三方面着手探索了销售及运营计划（S＆OP）的运行机制。     

Assessment of supplier performance based on product-development strategy by applying multi-granularity linguistic term sets

Measuring supplier performance possesses the properties of multi-dimension and multi-scale, it increases the complexity of the aggregation and assessment process. A focal company must develop an effective procedure for overcoming the complexity of performance measurement. Furthermore, the assessment of supplier performance must conform to the product-developed strategy of the focal company. This study is a further research deeper into the concept already introduced in Chang et al. [1] [Applying fuzzy linguistic quantifier to select supply chain partners at different phases of product life cycle. International Journal of Production Economics 2006; 100(2):348–59]; using multi-granularity linguistic variable and numerical ration scale to represent the overall supply performance. By unifying the derived information, the measurement complexity could be resolved. The fuzzy preference was constructed to adjust the consistent direction and transform information into fuzzy relationship. Finally, fuzzy linguistic quantifier guided ordered weighted aggregation (FLQG-OWA) operator with maximal entropy was computed and aggregated with all indicators to meet the current policy of the focal company.     

Measuring agri-food supply chain performance and risk through a new analytical framework: a case study of New Zealand dairy

Abstract

Many researchers and practitioners have long recognized the significance of measuring performance. Although general guidelines for measuring business performance are widely available, no appropriate measurement frameworks have been developed for measuring agri-food supply chain performance. Particularly, food quality and risk-related indicators have not been well integrated into existing performance measurement systems. Our research, therefore, addresses this knowledge gap by first providing an in-depth review of extant performance measurement systems and frameworks. It then develops an analytical framework by extending the Supply Chain Operations Reference (SCOR) model which has been extensively implemented across non-food industries. The analytical framework is further validated by utilizing a case study of 50 farmers and 10 dairy companies, operating in the New Zealand dairy industry.

Our pilot testing and subsequent findings show that the individual metrics interlocked with the analytical framework are in-line with the key industrial practices adapted by the New Zealand dairy industry. In addition, the framework is flexible and scalable to evaluate and benchmark other agri-food supply chains – ranging from fresh products such as fruits and vegetables to processed foods such as canned fruits. The findings further show that the detailed information required for measuring the level-3 SCOR metrics is not easily available in the industry, as researchers need to access specific company records that may be confidential. Consequently, this study provides how agri-food supply chain managers can employ our new analytical framework in-conjunction with the SCOR model for a deeper understanding of the complicated performance measurement indicators applied in their agri-food production systems and relevant supply chains.     

Measuring operational excellence: an operational excellence profitability (OEP) approach

The pursuit of operational excellence in the manufacturing industry is at rise but its measurement still lacks of appropriate indicators to determine its financial benefits. The ambiguity is due to the impact arisen from manufacturing fluctuations such as price and cost, production mix and direct and indirect parameters variations. Manufacturing fluctuations distort the cost benefit of operational excellence. This paper, therefore, proposes the OEP (Operational Excellence Profitability) indicators to isolate the impact of manufacturing fluctuation and distinctly identify the payback of operational excellence strategies and initiatives through cost benefits of achieving higher efficiency and yield. The paper presents the conceptual and mathematical development of the proposed OEP indicators and the formulas used for their calculation. Hypothetical and industrial-based investigations and applications of the OEP indicators are conducted for their validation. The results obtained from the hypothetical exercise and industrial case suggest that OEP indicators can provide an effective cost-benefit analysis of operational excellence. This would contribute in providing manufacturing organizations with more complete information regarding the performance of their processes, which will allow their directors and managers to take better decisions related to the management and improvement of their processes.     

A profitability model for tactical planning

Simple models reflecting changes in aggregate company behaviour in response to changes imposed by management decisions and/or factors outside the direct control of management provide useful tools for tactical planning purposes.One such model is discussed in this paper. The model enables management to assess explicitly and quantitatively the effect on the rate of return on capital employed of primary causes of change in any of the key variables affecting company performance, such as the unit price, the unit cost, the output level and the capital employed. Simple functional relationships are proposed between the major variables in the model, such as the level of output and the unit cost, the unit price and the volume of sales, the working capital requirements and the general level of the firm's activity, etc. and these are based on analytical considerations, empirical evidence and a series of assumptions. These relationships give rise to a set of parameters which are incorporated in the model and describe the operational (cost structure), financial (capital structure) and marketing (elasticity of demand) position of the company under study.Numerical results obtained from the model seem to suggest that the sensitivity of the rate of return to some of the parameters and underlying assumptions is relatively small, implying that the inter-dependence between some of the variables can be ignored, thus simplifying the problems associated with data collection and model evaluation.Both the model and the methodology of analysis employed are flexible enough to allow: (1) application of the model to alternative sets of functional relationships between variables and/or underlying assumptions; (2) further decomposition of the model to include additional variables depending on the particular objectives of the study; (3) modification of the model to explore the effects of management decisions or those of changes in external factors on productive unit and product profitability; and (4) analysis of models reflecting the effects of changes which are imposed on the system on measures of business performance other than the rate of return on capital employed.     

市场导向、创新与企业表现的关系——基于中国服务业的实证研究

市场导向的采用可以产生良好的企业表现等命题已被广泛接受,然而,二者之间具体关系的实证分析尚还不足,尤其是中国服务业中二者的具体关系研究几乎空白。本文以中国服务业企业为研究对象,提出了市场导向、创新与企业表现关系的假设模型,根据570个服务企业样本数据,利用回归分析及结构方程模型进行了检验,发现中国服务业中市场导向是通过创新的介入与递推而对企业表现发挥作用的。因此,中国服务业企业在市场导向的应用过程中要注意对创新活动的支持,这样才能充分发挥市场导向的作用。