A study of an integrated approach for strategy formulation and performance measurement in manufacturing enterprises.

Performance measurement quantifies the efficiency and effectiveness of action that helps organisations translate their strategies into results and fixes accountability to improve performance. This research identifies two problem statements: First, can integrating strategy formulation with measurement initiatives safeguard the performance goals in manufacturing enterprises? And second, how can manufacturing enterprises derive an integrated approach that meet their requirements and needs for strategy formulation (SF) and performance measurement (PM) system implementation? This work proposes an integrated paradigm that aligns the strategy-related performance measures to attain performance improvement in manufacturing enterprises. A two-stage empirical study was conducted, with 232 Hong Kong firms and 85 Shanghai firms participating in the study. The first stage surveys identified the common success factors, problem areas and strategy choices, and examined the relationship amongst corporate, marketing, technology and operational strengths and the `reactive/proactive' strategy choices. The subsequent personal interviews in Hong Kong complemented the survey findings by examining the impact of SF/PM efforts in manufacturing enterprises. There were two series of interviews. The first series acquired the managerial views on the decision criteria on the integration of strategy formulation and performance measures, with the aid of Analytical Hierarchy Process (AHP) methodology. The second interview series derived several design elements and process considerations for aligning strategy formulation with performance measures. The empirical study used in this research provided important inputs and served as a foundation for development of a SF/PM Integration (SPI) model. In an attempt to integrate strategy formulation and performance measurement, the SPI model adopts the guiding principles embodied with the Business Excellence Models and stresses the results-oriented assessments on five categories of SF/PM criteria, namely leadership and constancy of purpose, management by process, people development, continuous improvement, and results orientation. Unlike that of the MBNQA and EQA, the point values for criteria and sub-elements of SPI model were generated collectively from the perspectives of industry practitioners in the manufacturing sectors. These were determined using the normalised weights obtained from the AHP analysis of empirical interview findings. They are taken together to calculate the overall performance index for an organisation. The process framework comprises five stages starting from strategy formulation to implementation and evaluation of an integrated performance measurement system. It encapsulates the requirements, critical processes and activities of strategy formulation and performance measures into the way they are being managed in organisations. The SPI model helps manufacturing enterprises to build a self-assessment platform for amalgamating strategies, plans and actions which can enable performance improvement. It can supplement any Business Excellence Models, and serves three important purposes. Firstly, it is a working tool for integrating SF and PM initiatives and guiding the implementation of performance measurement system in manufacturing enterprises. Secondly, using the model can help improve the effectiveness of management practices in relation to performance measures and self-assessment; and thirdly, using the model can facilitate information sharing of best practices within an organisation and benchmark performance against competitors and other organisations. Results of a post-evaluation survey affirmed that the model and processes could encourage organisational learning and provide a practical means for manufacturing enterprises to devise effective self-assessment and performance improvement. The novel contributions of the research are to identify the key SF/PM attributes, develop the self-assessment scoring method and the process framework accompanying the SPI model. Manufacturing enterprises must evolve a holistic performance measurement system matching their corporate mission, objectives and strategies. The SPI model provides them with a systems approach for building and integrating the capabilities of SF and PM to attain performance improvement goals, irrespective of their business nature and sizes

Quality and Environmental Management Linkage: A Review of the Literature

This article presents a conceptual and empirical review of the literature related to the link between the different perspectives, models, and tools associated with Quality Management and Environmental Management. Several academic works identified in the literature that aimed to establish conceptual similarities between QM and EM are reviewed and discussed. In general, terms, the scholarly literature suggests that the main quality practices and programs associated with the Quality Management paradigmsuch as ISO 9001 and Total Quality Managementfacilitate the adoption of environmental practices associated with corporate Environmental Management. However, there is evidence of certain limitations driven by different biases, whether or not they are recognized in the reviewed publications. The concentration on some avenues of research focused on very detailed aspects of the linkage between QM and EM is discussed. Conversely, lines that have been overlooked and are in need for more research were also identified. The implications for scholars, such as suggestions for further research, are included as a contribution of the article.This research was funded by the Basque Autonomous Government (Grupos de Investigacion del Sistema Universitario Vasco; GIC 15/176) and the Chaire de recherche du Canada sur l'internalisation du developpement durable et la responsabilisation des organisations

Continuous maintenance and the future – Foundations and technological challenges

High value and long life products require continuous maintenance throughout their life cycle to achieve required performance with optimum through-life cost. This paper presents foundations and technologies required to offer the maintenance service. Component and system level degradation science, assessment and modelling along with life cycle ‘big data’ analytics are the two most important knowledge and skill base required for the continuous maintenance. Advanced computing and visualisation technologies will improve efficiency of the maintenance and reduce through-life cost of the product. Future of continuous maintenance within the Industry 4.0 context also identifies the role of IoT, standards and cyber security

A framework to review performance measurement systems.

This paper describes a structured review framework for managing business performance. The framework entails the review of both business performance, including thestrategic relevance of the measures, as well as the efficiency and effectiveness of the performance measurement system itself. A range of approaches and tools are employed in the framework which features a review card providing a high level view of the review process, showing the different types of review perspectives and their interactions

Eco‐Holonic 4.0 Circular Business Model to Conceptualize Sustainable Value Chain Towards Digital Transition

The purpose of this paper is to conceptualize a circular business model based on an Eco-Holonic Architecture, through the integration of circular economy and holonic principles. A conceptual model is developed to manage the complexity of integrating circular economy principles, digital transformation, and tools and frameworks for sustainability into business models. The proposed architecture is multilevel and multiscale in order to achieve the instantiation of the sustainable value chain in any territory. The architecture promotes the incorporation of circular economy and holonic principles into new circular business models. This integrated perspective of business model can support the design and upgrade of the manufacturing companies in their respective industrial sectors. The conceptual model proposed is based on activity theory that considers the interactions between technical and social systems and allows the mitigation of the metabolic rift that exists between natural and social metabolism. This study contributes to the existing literature on circular economy, circular business models and activity theory by considering holonic paradigm concerns, which have not been explored yet. This research also offers a unique holonic architecture of circular business model by considering different levels, relationships, dynamism and contextualization (territory) aspects

A collection of tools for factory eco-efficiency

co-efficiency is generally defined as doing more with less, aiming to decouple environmental impact from economic and social value creation. This paper presents three tools to guide the implementation of eco-efficiency in factories: (1) definition and patterns of good practices for sustainable manufacturing, (2) a self-assessment tool and maturity grid, and (3) a factory modelling framework

Conceptualising the impact of information asymmetry on through-life cost: case study of machine tools sector

Information asymmetry (IA) in terms of contextual variety and importance is one of the most challenging aspects of through-life costing in product-service systems (PSS). IA is an imbalance in the information, data and knowledge shared among the parties involved in a contractual agreement. In manufacturing systems under PSS, interaction and effective communication among several parties who are involved in a contractual agreement, rely on the continuity and accuracy of information and context. In such systems, contextual variety exhibits complexity and uncertainty in through-life costing and subsequently in PSS cost assessment. Although the economic aspect of PSS has been studied previously, the impact of IA on through-life cost and for different PSS solutions has not been detailed. Considering manufacturing value chains, this paper introduces a new concept of PSS-hierarchy to perform through-life costing in the presence of IA for various PSS solutions. Moreover, this paper proposes a generic life-cycle model for different PSS solutions to assess the total cost of ownership (TCO). The proposed model has been developed to support decisions on contract design in manufacturing systems. This study considers the manufacturer, service provider and customer perspectives to develop the TCO model using a machine tool manufacturing case study

Collaborative improvement as an inspiration for supply chain collaboration

The battlefield of competition is today moving from the level of\ud individual firms to the one of the extended enterprises, that is, networks of customers and their suppliers. This paper discusses how learning and continuous improvement today take place in processes based on daily collaboration at intercompany level, i.e. Extended Manufacturing Enterprises (EMEs). The purpose of the paper is to present a preliminary theory on Collaborative Improvement (CoI), i.e. continuous improvement at the EME level. Based on a literature review on Supply Networks, and Continuous Improvement and on evidence from two explorative case studies, the paper proposes a model for Collaborative Improvement in EMEs and discusses a research approach based on Action Research and Action Learning to further develop preliminary theory and actionable knowledge on how to foster and sustain CoI in EMEs