2 part Production Management Roberto Cigolini 2017

Inizio Seconda Parte

Performance Measurements

Question Marks

• Why performance measurement?
• Some definitions
• Operative conditions & performance
• Internal and external performance

1. Why Performance Measurement Are Important

To take the right decisions. Could be considered as part of a warning system.Provide signals (regarding results, company status, environmental variables, and customer requirements).Perceive signals to improve the quality of decision & timeliness.

* (e.g. dashboard of KPI is useful to assess the condition and take decision)

To learn. Measure performance help to trace the system (to understand what is wrong is necessary to know) what has been done.

To motivate. Link performance to motivation.In order to motivate employees it is important to share results, measure the result of everyone.

Remember ● We cannot improve what we cannot measure.

2. Some Definitions

Performance are the result, measured against a multi-dimensional scale, of the loyalty and productive effort. Result of the problem.

Operative Conditions are the external and internal context in which the result is obtained.Performance and Operative Conditions need to be both taken into account, but they should not be mixed up.

e.g. Baking a CakeResult: cake. How can I achieve quality? ● By through performance definition

Internal Operative Conditions: Machine obsolescenceExternal Operative Conditions: Exchange rate instability

INIZIO SECONDA PARTE

PERFORMANCE MEASUREMENTS

? QUESTION MARKS

• WHAY PERFORMANCE MEASUREMENT?
• SOME DEFINITIONS
• OPERATIVE CONDITIONS & PERFORMANCE
• INTERNAL AND EXTERNAL PERFORMANCE

1. WHY PERFORMANCE MEASUREMENT ARE IMPORTANT

TO TAKE THE RIGHT DECISIONS. COULD BE CONSIDERED AS A PART OF WARNINGS SYSTEM.

PROVIDE SIGNALS (previous results, company status, environmental variables and customer requirements)

PERCEIVE SIGNALS TO IMPROVE THE QUALITY OF DECISION & TIMELINESS

A DASHBOARD OF KPI IS USEFUL TO EVALUATE THE CONDITION AND TAKE DECISIONS

• TO LEARN: MEASURE PERFORMANCE HELP TO TRACE THE SYSTEM TO understand what is wrong, it necessary to know WHAT HAS BEEN DONE
• TO MOTIVATE: LINK PERFORMANCE TO MOTIVATION.

In order to motivate employees, it is useful to talk about results, measure the results of everyone.

PERFORMANCE = ACHIEVEMENT UNIT

REFERENCE TO COGNITIVE BIASES, employee.

REMEMBERWE CANNOT IMPROVE WHAT WE CANNOT MEASURE

2. SOME DEFINITIONS

• PERFORMANCE are the result, measured against a multi-dimensional scale, of the right and productive.
• RESULT OF THE PROCESS
• OPERATIVE CONDITIONS: ARE THE EXTERNAL AND INTERNAL CONTEXT IN WHICH THE RESULT IS OBTAINED

INTERVENING IN OPERATIVE CONDITIONS TO INCREASE PERFORMANCE

PERFORMANCE AND OPERATIVE CONDITIONS tend to fluctuate and be better off later in career, but they should not be mixed up.

(a) BAKING A CAKE

RESULT: CAKE. How can I achieve quality? ➔ Through PERFORMANCE DEF

TO UNDERSTAND QUALITY (DEFINING)PERFORMANCE DIFFERENCE IS USEFUL TO VALUE OPERATIVE CONDITIONS

OPERATIVE CONDITIONS FRAMEWORK

(b) INTERNAL OPERATING CONDITIONS: Machine obsolescenceEXTERNAL OPERATIVE CONDITIONS: Ex. Brokerage rate instability

3. INTERNAL AND EXTERNAL PERFORMANCE

EXTERNAL PERFORMANCES • DIRECTLY PERCEIVED BY • CLIENT VALUE MEASURE; • ARE PERFORMED DIRECTLY MEASURABLE FROM OUTSIDE PRODUCTION SYSTEM. → DEGREE OF WASTE REDUCTION.

INTERNAL PERFORMANCES → PERFORMANCES WHOSE MEASUREMENT • OF SPECIFIC INTEREST OF THE • COMPANY, BUT NOT OF THE CLIENT. ANY MORE? REDUCE COST = END PRODUCTIVITY. INTERNAL PERFORMANCES LEAD TO EXTERNAL ONES.

EXTERNAL PERFORMANCE DELIVERY LEAD TIME TO PRODUCE A PRODUCT WITH A GIVEN QUALITY OPERATION COST\PROFIT LEVEL COST

INTERNAL PERFORMANCE REDUCE WASTE INTERPRETED BY QUALITY CONTROL

PERFORMANCE MEASUREMENT INDEED TO IMPLY A CERTAIN PERFORMANCE MUST BE