Development of an extended enterprise performance measurement system

Abstract

This paper discusses the development of a performance measurement system specifically designed for the requirements of the extended enterprise, via two performance measurement frameworks: the structural extended enterprise balanced scorecard and the procedural framework for the selection and implementation of measures. The extended enterprise balanced scorecard offers a four-perspective framework, implemented at each node, that provides a generic structure for the management of performance measures in the extended enterprise; while the procedural framework operates at both the local and holistic levels, to provide a step-by-step generic process towards performance measure selection and implementation. When combined, the two frameworks produce the basic extended enterprise performance measurement (EEPM) system, which was subsequently tested at a first-tier supplier in the European automotive industry. The characteristics of the extended enterprise are taken as a given starting point, and the paper concludes by pointing out the need for extended enterprise performance management to balance the developments outlined here.

Keywords:

• Extended enterprise
• Performance measurement
• Intra-organisational performance measurement
• Inter-organisational performance measurement
• Balanced scorecard

Acknowledgments

The research described in this paper was produced under the MOMENT project (GRD1-2001-40488) which was funded by the European Commission's programme for Competitive and Sustainable Growth under the Fifth Framework programme.

Paul Folan received his BE in 2002 and MEngSc degrees from the National University of Ireland, Galway, in 2004, and is currently a PhD student at the same university. His main research interests include performance measurement, the extended enterprise, product lifecycle management and reverse logistics.

Jim Browne is registrar and deputy president of the National University of Ireland, Galway, as well as the founder of the Computer Integrated Manufacturing (CIM) Research Unit there. He has many years experience of working in applied research and development, including extensive experience of EU and industrially funded projects. His research interests are in the design, analysis, modelling and operation of Extended and Virtual Enterprises. He holds Bachelors and Masters degrees from NUI, Galway and PhD and DSc degrees in engineering from the University of Manchester Institute of Science and Technology. His most recent book, co-authored with Dr Hari Jagdev and Dr Attracta Brennan is entitled Strategic Decision Making in Modern Manufacturing and was published by Klewer Academic Publishers in 2004.