Selecting key performance indicators for production with a linear programming approach

Nicole Stricker, Fabio Echsler Minguillon and Gisela Lanza

International Journal of Production Research, 2017, vol. 55, issue 19, 5537-5549

Abstract: Modern production systems are prone to disruptions due to shorter product life cycles, growing variant diversity and progressively distributed production. At the same time, reduced time and capacity buffers diminish mitigation opportunities, requiring better tools for production control. Performance measurement with key performance indicators (KPIs) is a widely used instrument to detect changes in production system performance in order to coordinate appropriate countermeasures. The main challenge in planning KPI systems consists in determining relevant KPIs. On the one hand, enough KPIs must be selected for a sufficiently high information content. On the other hand, the cognitive abilities of users are not to be overstrained by selecting too many KPIs. This tradeoff is addressed in a proposed selection process using an integer linear programme for objective KPI selection. In order to achieve this goal, crucial facets of the information content requirement are formalised mathematically. The developed method is validated using a practical application example, showing the influence of model parameter selection on optimisation results. The formalisation of the information content is shown to be a novel and promising approach.

Date: 2017
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Citations: View citations in EconPapers (5)

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DOI: 10.1080/00207543.2017.1287444

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