Centre for Strategy and Performance

Developing a Predictive Performance Measurement System

Aims

• To develop a design process for developing a predictive performance measurement system.
• To develop a software tool to support the development of a predictive performance measurement system.
• To understand better the process for building knowledge about performance linkages in organisations.

Industrial issues

Traditionally, performance measurement systems have been mainly backward-looking, used for tracking and reporting the past. Although this performance information is necessary, industrial companies also require information that can be used to manage future performance, for example, planning, performance forecasting and target setting.

Currently, existing performance measurement system design processes do not include a forward-looking (predictive) mechanism to help managers to predict what may happen and allow them to identify potential problems.

Research approach

This research investigates the development of a forward-looking, predictive performance mechanism (see figure 1), to help managers to quantitatively predict and manage operations performance. This is being developed using inputs from theory and practice. It currently consists of two integrated modules. The first module is based on a strategic mapping tool, which enables managers to build a performance model by identifying and linking production variables. The second module comprises a fuzzy expert system, which enables managers to predict an output value from given input values.

The proposed tool and design process will be implemented and tested in a number of manufacturing companies. Comments and feedback will be used to refine the tool and the design process.

Figure 1: A Framework for Predictive Performance Measurement System

Outcomes

• A design process and a tool for developing a predictive performance measurement system
• Enhanced understanding of the process for extracting organisational knowledge

Researchers

Chatchai Unahabhokha

Ken Platts

Kim Hua Tan