Communicating performance measures : Supporting continuous improvement in manufacturing companies

University dissertation from Skövde : University of Skövde

Abstract: Manufacturing enterprises are a key driver of economic growth (Eurostat, 2016). Implementing continuous improvement (CI) is commonly used to increase competitiveness (Hyland et al., 2007), but despite the well-known theory of CI, many manufacturing companies fail in implementing it (Bhasin, 2012; Nordin et al., 2012; Tiwari et al., 2007).An identified critical success factor in CI implementation is the evaluation of performance, including the performance evaluation system itself, the linkage between targets at different company levels, and continual evaluation of performance (Bakås et al., 2011; Scherrer-Rathje et al., 2009; Ukko et al., 2009). Another critical success factor in CI implementation is the communication of performance measures (Bakås et al., 2011; Ukko et al., 2009).This research explores the communication of performance measures. The aim is to support CI by improving the communication of performance measures, and to this end, this thesis concentrates on identifying the main challenges in the communication of performance measures supporting CI. The research scope is manufacturing companies in general, and manufacturing SMEs in particular. The relevant literature concerning the communication of performance measures in manufacturing companies is identified and summarized. Also, current practice is explored, focusing on how performance measures are communicated in manufacturing companies, and whether and how the communication supports CI. This has been done to identify divergences between current practice and theory. Finally, theory and empirical findings are synthesized to identify some of the main challenges to be addressed in order to succeed in CI.The main task is to support CI efforts in manufacturing SMEs, eliminating the identified divergences in the communication of performance measures by adapting these measures to these manufacturing SMEs. These challenges can be summarized as follows: - using both financial performance measures as well as objective and subjective, non-financial performance measures  - aligning performance measures with strategy and targets  - integrating all performance measure communication, as related to both daily performance and CI, in the same communication loop.  - forming two-way communication channels between managers and operators  - aligning oral and written communication channels  - exploring how information systems can facilitate the communication of performance measures  - using and optimizing the visual communication of performance measures

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