Where ever it takes place in a manufacturing business, performance measurement is key to guiding associates to understand the result of their actions. This is something we all learnt as small children while waiting to see the result of our, on occasions, misguided actions.
The manufacturing production environment is no different and although all businesses record and report on financials using formal ERP solutions, very few apply the same solution philosophy to the plant floor. This article explorers various concepts which are easily understood but not truly embraced by many.
"While financial measures of performance are often used to gauge organizational performance, some firms have experienced negative consequences from relying solely on these measures. Traditional financial measures are better at measuring the consequences of yesterday's actions than at projecting tomorrow's performance. Therefore, it is better that managers not rely on one set of measures to provide a clear performance target."
"To be effective, performance yardsticks should continuously evolve in order to properly assess performance and focus resources on continuous improvement and motivating personnel."
