Linking performance measurements and manufacturing process improvements: the two-stage analytical framework

This article intends to extend the use of network data envelopment analysis (NDEA) to build performance measurement system (PMS) for assessing manufacturing operation performance and setting targets for the process improvements. A new integrated framework is proposed to link the operational NDEA-based PMS with the upper hierarchical level in a manufacturing enterprise, to ensure a strategic fit between the operations and strategy. This two-stage analytical framework is developed based on the process approach technique that enables researchers to develop procedures instead of descriptive theories. A case study is provided to validate the applicability of the proposed framework in a real manufacturing enterprise. The result of the case study shows that the NDEA-based PMS is effective at delivering a holistic view of performance through its composite index, as well as the detailed performance of each process, and providing recommendation of targets to improve the underperforming processes. In the case study, we also illustrate how the NDEA-based PMS can be linked to the enterprise's balanced scorecard.