Establishing Performance Measurement System:

In order to establish performance measurement system one must start with a review of current measures and systems. It includes the following activities:

• Documenting current activities.
• Confirming strategic objectives.
• Identify success factors critical for meeting objectives.
• Identify manufacturing process trends affecting the company.
• Finding new and revised performance measures.
• Comparing current and proposed measures.

After establishment of the system, the criteria measures should be periodically reviewed in the context of current business needs. As today's measures may not satisfy the needs in the future environment.

There are eight performance measures of any production system :

1. Manufacturing lead time

2. Work-in-process

3. Machine utilisation

4. Throughput

5. Capacity

6. Flexibility

7. Per formability

8. Quality