An evaluation of performance measurement system operational management: Case study ETO manufacturing company

Nur Farahatan () and Dermawan Wibisiono ()

Journal of Contemporary Research in Social Sciences, 2025, vol. 7, issue 2, 19-33

Abstract: This research evaluates the performance measurement system of PT. Hegarmanah (disguised), as a case study of an Engineer-to-Order (ETO) manufacturing company that supplies High Voltage Products and Services and has found inefficiencies in inventory workflows and its misaligned suppliers. Despite robust sales supported by centralized procurement’s customers, PT. Hegarmanah faced internal issues that hindered the development of new Knowledge-based Performance Measurement Systems. This study conducted semi-structured interviews with operational and senior management representatives as part of a qualitative case study approach. The Knowledge-Based Performance Management System (KBPMS) framework was implemented, with an emphasis on specific resource capabilities, internal processes, and organizational output. The results indicated inefficiencies in inventory turnover that were caused by inadequate workflow management, insufficient supplier performance monitoring, and restricted operational cooperation. The suggested KBPMS system aims to improve team performance through smart-factory capabilities and workload optimization, expedite inventory workflows through ERP integration, and strengthen supplier data accuracy. The proposed IPMS framework addresses operational inefficiencies. Thus, a tailored performance management framework for engineer-to-order manufacturers, through the online implementation of performance measures and the enhancement of accountability, may enhance operational sustainability and align inventory practices with corporate objectives.

Keywords: ETO(Engineer-to-order); Industry 4.0; ITO (Inventory turnover); PMS (Performance measurement systems); Smart factory; Sustainable business. (search for similar items in EconPapers)
Date: 2025
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