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Performance Measurement Essay

2782 words - 12 pages

When a procedure, a model, an approach, a case study, or other research is undertaken, generally some measure of the system's performance is presented and perhaps analyzed. A large number of different types of performance measures have been used to characterize systems, particularly production, distribution, and inventory systems. Such a large number of available performance measures makes performance measure selection difficult. Generally, performance measurement research focuses on analyzing performance measurement systems that are already in use, categorizing performance measures and then studying the measures within a category, and building rules of thumb or frameworks ...view middle of the document...

The model may then compare manufacturing lead time or due-date performance by changing the system's configuration. In this way, a single type of measure has been chosen, time, but within this category, many different specific measures of time may be used. Thus, measures within a category can be compared and analyzed, so that performance measure selection within a category may be easier. Although with this approach, the performance category is already determined.

One of the most important measurements is balanced scorecard. Kaplan & Norton (1996) proposed the BSC concept, which claims that performance evaluation criteria should include non-financial perspectives such as customer, internal business process, and learning and growth perspectives, as well as the financial perspective. They also proposed a layer structure for each of the four perspectives, with the three layers comprised of: mission, objectives, and measures. The BSC has been applied in many industries such as banking (Beechey & Garlick, 1999), healthcare (Stewart & Bestor, 2000; Zelman et al., 2003), and hotels (Denton & White, 2000). Small companies’ characteristics are considered by Chow et al. (1997). The BSC has also been applied in various business processes such as product development (Curtis & Ellis, 1997), public relations management (Fleisher & Mahaffy, 1997), internal auditing processes (Ziegenfuss, 2000), and information technology management (van der Zee & De Jong, 1999). The notion of the BSC has been applied to various business activities such as IS activities, e-commerce, Customer Relationship Management (CRM), and SCM (Jones & Hughes, 2001). Martinsons et al. (1999) developed a BSC for information systems that measured and evaluated IS activities from the following perspectives: business value, user orientation, internal process and future readiness. Hasan & Tibbits (2000) proposed a BSC for e-commerce based on Martinsons’ IS scorecard, the literature on management of e-commerce, and their own case study. Kim et al. (2003) suggested a BSC for evaluating the effectiveness of CRM solutions which consisted of four perspectives: customer value, customer satisfaction, customer interaction, and customer knowledge. Brewer & Speh (2000) used the BSC to measure supply chain performance, and showed a fraction of the possible measures that can be developed. Although the performance measurement of SCM may be studied as a BSC from the purely SCM perspective, this approach is not effective for corporate-level evaluation because many measures will also be influenced by other business activities. Therefore, this study attempts to reconcile the SCM measures with the corporate-level BSC by merging and identifying its relationship with SCM activities. This approach must be extended to other business activities such as CRM. Ultimately, using the BSC framework in SEM will allow companies to trace the key business activities that influence...

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