The Development of Key Performance Indicators (KPIs) at an Aerospace Manufacturing Company

Mohamad, Effendi (2009) The Development of Key Performance Indicators (KPIs) at an Aerospace Manufacturing Company. Project Report. Penerbit Universiti Teknikal Malaysia Melaka.

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Abstract

The title of this study is “The Development of Key Performance Indicators (KPIs) at an Aerospace Manufacturing Company”. This study focuses on the issue of the KPIs development which is linked to the goal, objective, mission and vision of ABC Company. The KPIs are developed to provide this company a good performance measurement tools in supporting the success of its Lean Manufacturing journey and to be cost-competitive. The aim of these efforts is to achieve the company’s expectation of a positive gross profit around 30% and pre-tax profit of 5%. In this study, a set of KPIs measured both objectively and subjectively are developed through a comprehensive extensive literature review (case study reports), internal benchmark activities and best practice benchmark on non – competitor company. The ABC Company KPIs were identified and created through brainstorming and group discussions during a two day workshop. The other objective of this study is to learn and investigate the current communication gap at all level by using semi-structure interview and focus group discussion. A standard reporting report was also created to overcome this communications issue by having each person in each level to review and reports their standard operation to their subordinates regularly based on the decided frequency. The outcomes of KPIs implementation was tested in Strategic Development Department (SDD) and Manufacturing Operation B2 Department that have been chosen as the pilot area of the study. As a company that has been implementing Lean Manufacturing, this study also assessed the level of achievement of lean implementation efforts before and after the development of KPIs by using Red Amber Green (RAG) status. Subsequently, a new Lean House was constructed to ensure alignment between on the new KPIs and the lean manufacturing programme.

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