Measurement in Production System:

Performance measurement facilitates ways towards measuring operating status and progress toward goals. Several organizations still consider traditional measurement systems which over emphasize on financial criteria. This adopted strategy discourage management from obtaining strategic initiatives for improving quality and hence, thereby eliminating waste. Thus, there exists a need for such a performance measurement system that encourages competitiveness. One key element of such a system is utilizes of enlightened measures. Development of enlightened measures begins with looking outside the organization to see what customers or the market requires and then designing measures that shall guide and motivate actions toward strategic goals. Therefore, enlightened measures enhance long term improvement. The main reason of this system are to present a balance score card that gives a complete picture of the status and direction of the company in terms of both financial and non financial measures.

Objectives

After learning this unit, you should be able to understand

• criteria measures and business decisions,
• traditional performance criteria,
• restriction of traditional performance measures,
• functions of performance measurement system, and
• balanced score card.