Manufacturing performance measurement tool for small and medium-sized enterprises

Abstract

Competitive pressures in global manufacturing are forcing manufacturing organizations to re-examine and modify their competitive strategies. Small and Medium-sized Enterprises (SMEs) are not exempted from these pressures. They have to pay more attention to the changes in manufacturing performance system including the measures. Although manufacturing performance measurement has been in existence for many years, it seems that there is no consensus on the collective set of measures used by companies. Most researchers and authors defined the manufacturing performance measures in terms of quality, cost, delivery and flexibility. There is also a bulk of researches that used other measures such as time, human resources, financial, customer satisfaction, innovation, and efficiency. Very few researches have developed the manufacturing performance measurement for SMEs. Based on the literature review of previous studies, this study has proposed a set of manufacturing performance measures for SMEs consisting of six factors i.e. quality, delivery, cost, flexibility, time, and labor, which are the most commonly used measures in previous studies. A total of 32 dimensions were then derived from relevant literature. A survey has been conducted in matching the measures with industry practices. It was found that most of the measures are being applied by Malaysian automotive SMEs. Quality and cost were found to be the most frequently used, followed by delivery and time which also have high usage level, but labor and flexibility were placed at a low usage level. Finally, a total of 25 measures have been proposed to assess manufacturing performance in SMEs. Analytic Hierarchy Process (AHP) methodology was applied in developing a tool of manufacturing performance measurement for SMEs. This tool enables and assists SMEs in their efforts to continually improve their manufacturing performances so as to become efficient and effective. While the tool provides a systematic approach for quantitative assessment of manufacturing performance, it is not entirely automated. Thus for that purpose, a software-based tool was subsequently developed by using PHP and MySQL. Two case studies have been conducted to validate the tool. Results from the case studies suggested that the tool is appropriate and suitable to assess manufacturing performance in SMEs. The tool identifies the strengths and weaknesses that indicate where and how improvements need to be made. It provides the direction to practice continuous improvement towards achieving excellence.