Development of an integrated performance measurement framework for lean organizations

Abstract

Purpose The purpose of this paper is to propose an integrated performance measurement framework to measure the effect of lean implementation throughout all functions of an organization. Design/methodology/approach The paper identifies the seven categories representing all organizational functions. These categories have been divided into 26 performance dimensions and key performance indicators (KPIs) for each performance dimension have been identified to measure lean performance. The interrelationship of each category with lean principles and/or lean wastes has been identified. KPIs are developed on the basis of identified criteria, frequency analysis of existing literature, and discussion with industry professionals. Finally, an integrated performance measurement framework is proposed. Findings The proposed framework evaluates the organization under seven categories – manufacturing process, new product development (NPD), human resource management, finance, administration, customer management, and supplier management. In total, 26 dimensions and 119 key performance indicators have been identified under the seven categories. Research limitations/implications The proposed framework is a conceptual framework and it is to be tested by empirical and cross-sectional studies. Originality/value The main novelty of the research is that the leanness of the organization has been measured throughout the supply chain of the organization in an integrated way. The various areas of measurement are manufacturing process, NPD, finance, administration, customer management, and supplier management. Further, the proposed KPIs are also categorized as qualitative or quantitative, strategic or operational, social or technical, financial or non-financial, leading or lagging, static or dynamic. This paper contributes to the body of knowledge in performance measurement.