A framework for supply chain performance measurement

The Toyota production System is a technology of comprehensive production management the Japanese invented a hundred years after opening up to the modern world. More than likely, another gigantic advance in production methods will not appear for some time to come.

Toyota production system

This paper addresses issues met when designing, implementing, using and continuously updating performance measurement systems in manufacturing companies. The paper develops, from theory, a framework for analysing the implementation of a performance measurement system and uses this framework to interpret three longitudinal case studies. The paper concludes that specific processes are required to continuously align the performance measurement system with strategy. When these processes are combined with a well defined model of strategic success, the measurement system can enhance the strategic management process by challenging the assumptions and the strategy itself.

Designing, implementing and updating performance measurement systems

Purpose - The purpose of this paper is to act as a meticulous conceptual paper probing the contemporary view towards lean and illustrate that, despite its discernible benefits, the implementation record suffers as the prevailing opinion fails to encapsulate that an aspiring lean enterprise shall only succeed if it views lean as a philosophy rather than another strategy. Design/methodology/approach - The paper is based on a thorough literature search concerning the success and failure of lean implementations and acts as a precursor for one of the authors utilising a combination of methodologies; namely, interviewing, survey questionnaire and participant observation in attempting to prove his PhD hypothesis. Findings - Evidently, a cocktail of factors are needed for lean success; not only is it necessary to implement most of the technical tools but an organisation's culture needs transforming too. Furthermore, the alterations need to be implemented throughout an organisation's value chain. Lean has a major strategic significance, though its implementation procedure, HRM implications, general approach to the supplier base coupled with the overall universal conviction of viewing lean as a set of tactics rather than embracing it as a philosophy advocates that this contributes to the relatively low number of successful lean initiatives. Originality/value - The paper would prove invaluable to lean practitioners through its summation of the intricacies towards lean enterprise success and academic researchers by focusing their attention towards the necessary cultural implications. © Emerald Group Publishing Limited.

Lean viewed as a philosophy

Awareness and use of agile methods has grown rapidly among the information systems development (ISD) community in recent years. Like most previous methods, the development and promotion of these methods have been almost entirely driven by practitioners and consultants, with little participation from the research community during the early stages of evolution. While these methods are now the focus of more and more research efforts, most studies are still based on XP, Scrum, and other industry-driven foundations, with little or no conceptual studies of ISD agility in existence. As a result, this study proposes that there are a number of significant conceptual shortcomings with agile methods and the associated literature in its current state, including a lack of clarity, theoretical glue, parsimony, limited applicability, and naivety regarding the evolution of the concept of agility in fields outside systems development. Furthermore, this has significant implications for practitioners, rendering agile method comparison and many other activities very difficult, especially in instances such as distributed development and large teams that are not conducive to many of the commercial agile methods. This study develops a definition and formative taxonomy of agility in an ISD context, based on a structured literature review of agility across a number of disciplines, including manufacturing and management where the concept originated, matured, and has been applied and tested thoroughly over time. The application of the texonomy in practice is then demonstrated through a series of thought trials conducted in a large multinational organization. The intention is that the definition and taxonomy can then be used as a starting point to study ISD method agility regardless of whether the method is XP or Scrum, agile or traditional, complete or fragmented, out-of-the-box or in-house, used as is or tailored to suit the project context.

https://ulir.ul.ie/bitstream/handle/10344/574/L%201.pdf;sequence=2

Agility from First Principles: Reconstructing the Concept of Agility in Information Systems Development

xi Foreword xv Preface xix List of Illustrations Chapter One: World Class Manufacturing and the Need for New Performance Measures Chapter Two: Characteristics of the New Performance Measures Chapter Three: Shortcomings of Traditional Management Accounting Chapter Four: Measurement of Delivery Performance and Customer Service Chapter Five: Measurement of Process Time Chapter Six: Measurement of Production Flexibility Chapter Seven: Measurement of Quality Performance Chapter Eight: Financial Measures Chapter Nine: Measuring Social Issues Chapter Ten: Establishing Performance Targets Chapter Eleven: Producting the New Performance Measures Chapter Twelve: Alternative Cost and Management Accounting Techniques References About the Author Index

Performance Measurement for World Class Manufacturing: A Model for American Companies

Why Is Lean Accounting Important? How Standard Costing Can Drive Wrong Behavior We Need to Show the Financial Impact of Lean Improvements We Need a Better Way to Understand Product Costs We Need New Kinds of Lean Performance Measurements We Need to Eliminate Waste from Accounting Processes and Systems We Need Better Ways of Making Decisions We Need to Focus Our Business around Customer Value Summary Exercises and Discussion Questions Maturity Path to Lean Accounting The Maturity Path Getting Started with Lean Accounting Summary Exercises and Discussion Questions Cell Performance Measurements What's Wrong with Traditional Measurements? What's Right with Lean Cell Measurements? BMA, Inc. Performance Measurement Starter Set Day-by-the-Hour Report First-Time-Through Report WIP-to-SWIP Report Operational Equipment Effectiveness Other Support Measurements in the Cell Presenting the Information Making the Cell Performance Measurements Work Nonproduction Cells and Departments Summary Exercises and Discussion Questions Financial Benefits of Lean Manufacturing The Problem Creating the Box Score Managing Capacity Making Money from Lean Manufacturing Eliminating Wasteful Transactions What Must Be in Place? Cell Transactions Labor Tracking Material Costs Inventory Tracking Summary Lean Financial Accounting A New Perspective on Internal Accounting Control Eliminating Waste from the Financial Accounting Processes Using Lean Tools to Create Change Managing by Value Stream What Is a Value Stream? Different Kinds of Value Streams Why Do We Focus on Value Streams? Why Should We Manage the Business through the Value Streams? Continuous Improvement The Maturity Path to Lean Value Stream Organization Problems and Issues How Do We Identify the Value Streams? Do We Need to Change Our Organization Chart? Develop a Plan Summary Value Stream Performance Measurements What Is the Purpose of Value Stream Performance Measurements? Value Stream Continuous Improvement Teams Value Stream Measurements and Process Control How Do Value Stream Measurements Differ from Traditional Metrics? Box Scores Sales per Person Alternative Measurements On-Time Shipment Dock-to-Dock Time First Time Through Average Cost per Unit Accounts Receivable Days Outstanding Supporting Measurements Presenting the Information Making the Value Stream Performance Measurements Work Summary Value Stream Costing What Is Wrong with Traditional Standard Costing? How Does Value Stream Costing Work? Why Is Value Stream Costing Simple? How Can We Implement Value Stream Costing? How Do We Handle Costs Outside the Value Stream? How Do We Know the Cost of a Product? Value Stream and Plant Profit and Loss Statements Calculating the Cost of Inventory Special Problems Involving Inventory Getting Started with Simpler Methods Summary Using the Box Score Reporting Value Stream Performance Showing the Effects of Lean Improvements Showing the Effects of Strategies and Plans Summary Calculating Product Costs-Features and Characteristics What Drives Cost in a Lean Value Stream? How to Use Features and Characteristics Uses of Features and Characteristics Costing Summary Eliminating More Wasteful Transactions Labor Tracking Material Costs Inventory Tracking The Internal Control System Sales, Operational, and Financial Planning (SOFP) Purpose of Lean Sales, Operations, and Financial Planning Lean Financial Planning Lean Sales, Operations, and Financial Planning Value Stream Demand Planning Value Stream Operations Planning SOFP Planning Meeting Executive SOFP Meeting Variations on a Theme Making It Happen Summary Lean Financial Accounting II Further Advances in Lean Accounting Summary The Lean Enterprise What Is a Lean Enterprise? What Lean Methods Support the Wider Lean Enterprise? Why Are Lean Enterprises So Hard on Themselves? Summary Target Costing How Does Target Costing Work? Where Is Target Costing Used? What Are the Steps We Take? After Step 3 Target Costing at ECI, Inc.: Steps 1 through 3 Understanding Customer Value Example of Target Costing at ECI: Steps 4 through 6 Calculating the Target Costs Example of Target Costing at ECI: Steps 7 through 9 Driving to Customer Value Example of Target Costing at ECI: Steps 10 through 12 Summary Expanding Value Streams Outside Our Four Walls The Lean Value Stream Revisited A Vision of the Expanded Value Stream Examining Value and Cost within Our Own Company Example of Effective Value Stream Expansion Summary The Lean Accounting Diagnostic The Maturity Path Revisited Overview of the Diagnostic Tool Working with the Diagnostic Tool Summary Performance Measurement Linkage Chart The Performance Measurement Framework Creating the Performance Measurement Starter Set Steps for Developing Performance Measures in Your Company Summary Transaction Elimination Maturity Path Table How to Use the Maturity Path Table Transaction Elimination Process Maps Summary Value Stream Cost Analysis What Is Value Stream Cost Analysis Performing the VSCA Calculations Step 1: Define the Value Stream Step 2: Analyze Capacity Future State Step 3: Simulate Uses of Capacity Summary Value Stream Mapping Value Stream Maps and Lean Accounting More Value Stream Steps on the Value Stream Map Data Box Information Summary

Practical Lean Accounting : A Proven System for Measuring and Managing the Lean Enterprise

Value stream management for lean companies, part II

The Proactive Accountant Manufacturing in the Twenty-First Century Criticism of Accountants and Controllers The Proactive Accountant Attributes of a World-Class Management Accountant Tools and Techniques The Role of the Management Accountant Shortcomings of Traditional Accounting Methods History of Management Accounting Problems with Management Accounting Lack of Relevance Cost Distortion Inflexibility Incompatibility with Lean Principles Inappropriate Links to the Financial Accounts Lean Manufacturing What Is Real Manufacturing? The Five Critical Issues of Lean Manufacturing Issue 1: Quality Issue 2: Just-in-Time Manufacturing Issue 3: World-Class People Issue 4: Flexibility Issue 5: Value to the Customer Agile Manufacturing Simplification of Accounting Systems Aspects of Traditional Accounting Systems Why Are Complex Systems Needed? The Lean Manufacturer New Accounting Goals A Four-Stage Approach to Simplification Value-Stream Accounting How Does Value-Stream Accounting Work? Plain-English Income Statements Financial Benefits of Lean Improvement Product Costing Value-Added Management What Is a Process? Value-Added Analysis Process Mapping Root-Cause Analysis Process Improvement and Reengineering Performance Measurement Characteristics of the New Performance Measures Examples of New Performance Measures at Work Implementing New Performance Measurements A New Approach to Product Design What Is Wrong with the Traditional Design Approach? Concurrent Engineering Target Costing Value Engineering Life-Cycle Costing Quality Function Deployment Variety Effectiveness Analysis Continuous Improvement Implementing the New Approach to Accounting Making the Changes Implementing the Accounting Changes What's an Accountant to Do? Interlude: Accounting Is Boring, but Controllership Is Not Interlude: Bean Counters No More South Central Bell Automatic Feed Company Appendix: Accounting and Measurement Questionnaire Instructions References Each chapter concludes with a Summary & Questions

Making the Numbers Count: The Accountant as Change Agent on the World-Class Team

Agile manufacturing is responsive, flexible manufacturing that can deliver better products, faster, at lower cost. This book is the first to show you how computerization can aid this transition. Computer systems and software designed for individual departments or functions can be adapted to create an integrated world class manufacturing environment. Case studies reveal common challenges and provide guidelines for companies just starting out. A non-technical, practical guide.

Brian H. Maskell

Papers

Performance Measurement for World Class Manufacturing: A Model for American Companies

Practical Lean Accounting : A Proven System for Measuring and Managing the Lean Enterprise

Value stream management for lean companies, part II

Making the Numbers Count: The Accountant as Change Agent on the World-Class Team

Software and the Agile Manufacturer: Computer Systems and World Class Manufacturing