International Journal of Innovation, Management and Technology, Vol. 5, No.
1, February 2014
Operational Performance Metrics in Manufacturing
Process: Based on SCOR Model and RFID Technology
Gyusun Hwang, Sumin Han, Sungbum Jun, and Jinwoo Park
AbstractPerformance measurement is the fundamental
activity to evaluate the competitiveness of a company. By
suggesting the method of performance measurement, we can
expect that the result can affect several management
components consisting of following three levels: Strategic level,
Tactical level, and Operational level. However, the metrics
belonging to different levels are not integrated, therefore a huge
gap among the different levels exist. So this paper covers the
metric-gap among these levels, and finally focuses on the
performance of operational level. In order to achieve this
purpose, we review the SCOR model and define the problems of
the metrics in SCOR model.
The aim of this paper is to develop a process for tracking the
metrics of the operational level with the ERP systems. As the
result of study, we expect that the performance of several key
metrics can be automatically measured in real time. To do this,
we design the procedure of measuring performance and
extracting the possible metrics of RFID on the operational level
when RFID is implemented to a SCOR model based ERP
system.
Index TermsPerformance measurement, performance
metrics, SCOR model, RFID (radio frequency identification)
technology, ERP system.
I. INTRODUCTION
To compete in the global markets, organizations strive to
make the outstand performance. And evaluating an
appropriate performance is a key role in companys success.
For this reason, performance measurement has gained a
tremendous amount of the attention, because it has a
significant influences on performance themselves.
The lack of proper performance measure will result in
failure to meet customer needs. And this result causes the
companys low competitiveness and provokes the low profit
business, if bad performance measurement is lasting. It is
generally believed that a well-extracted metrics can increase
the chances for success by inspecting the entire process of the
company environment. And result of the performance
measurement delivers companys competitive advantages
through correcting the companys defects.
In manufacturing company, operational performance has a
major impact on product cost, product reliability, cycle time,
etc. So the measurement of manufacturing performance
Manuscript received December 31, 2013; revised February 10, 2014. This
work was supported in the ASRI (Automation and Systems Research
Institute) in Seoul National University in the form of resources and
administrative support.
The authors are with the Dept. of Industrial Engineering at Seoul National
University, Seoul, Republic of Korea (e-mail: skyair21@mailab.snu.ac.kr,
hans8501@mailab.snu.ac.kr, junsb87@mailab.snu.ac.kr,
autofact@snu.ac.kr).
DOI: 10.7763/IJIMT.2014.V5.485
remains an important subject in recent studies. SCOR model,
which is the reference model of this paper, covers all of the
supply chain management (SCM). Due to its wide range of
concerned, the scope of this paper is limited in the
manufacturing aspects.
In general, there are hierarchy levels in companys
management components. And they are strategic, tactical,
and operational levels which are distinguished by their duties,
positions, job tenure, etc. Top management in strategic level
needs financial measures for management level decisions.
But lower management situated in tactical and operational
level and workers need operational measures for daily
business [1].
Fig. 1. Characteristics measurement of management level.
TABLE I: METRICS IN MANAGEMENT LEVEL
Metrics
Lead time, Quality level, Cost saving,
Supplier pricing, Order cycle time, Cash
flow, Total cash flow time, Capacity, Rate
Strategic level of return on investment, Level of customer
perceived value of product, Net profit vs
productivity ratio, Range of product and
services, Variations against budget
Accuracy of forecasting techniques,
Effectiveness of master production
Tactical level schedule, Flexibility, Customer service
satisfaction, Customer query time, Order
entry method, Flexibility
Defect free rate, Capacity utilization, Lead
time, Range of product and services,
Operational level Effectiveness of scheduling techniques,
Incoming stock level, Work in progress,
Finished goods in transit
There is a lack of a clear distinction between metrics at
strategic, tactical, and operational levels. These limitations
should be complemented by balanced approach. And metrics
and measurement should be classified at strategic, tactical,
and operational levels, and be non-financial measures, as
well. Gunasekaran et al., present the metrics regarding the
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 International Journal of Innovation, Management and Technology, Vol. 5, No. 1, February 2014
management levels [2]. And Table I presents the metrics in
each management level regarding the manufacturing process.
II. PERFORMANCE MEASUREMENT AND METRICS
A. Performance Measurement
Performance measurement is indispensable for managing
the state of the system and taking the appropriate actions for
maintaining companys competitiveness. And many
companies conduct performance measurement for measuring,
evaluating, and monitoring their operations of the entire
activities [3].
Fig. 2. Functions of performance management.
There are some important criteria for effective
performance measurement.
1) The measures should link between strategy, execution,
and value creation. And the measures should indicate
the comprehensive performance of activities.
Performance measurement takes into account the overall
companys activities. In order to achieve this, measures
should align the activities from business to operations.
2) The measures should involve relevant non-financial and
intangible dimensions of performances. In general,
especially in Top management level, financial measures
Fig. 3. Flow of the performance analysis.
The metrics used in operational level are to reflect the
current status of manufacturing situation [5]. In the shop level,
there are many machines and work in process (WIP) parts
exists. Metrics are critical elements in representing the
dynamic circumstance of the shop environment. So metrics
also should be changed rapidly in order to prevent metrics
becoming the obsolete. And operational metrics should
monitor and control the operational efficiency. Finally,
operational metrics are used to gauge and measure how a
manufacturing business is performing, which is measure of
how effectively the operations and business is achieving its
defined goals.
The metrics are related to the specific manufacturing goals.
And metrics reveal a real insight of performance
measurement, the appropriate performance measures that
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are frequently used to gauge the performance or the firm.
But on the point of the low management levels views,
there are many aspects concerned with intangible
performances such as effectiveness of the scheduling,
human resource related measures, etc. And those
non-financial measures also important factors required
to manage the companys activities.
3) The measures should capture the reality adequately. As
the circumstance of the companys environment is
dynamic status, measures could be obsolete. And this
obsolete prevent the measuring the performance
effectively. So measures should represent the actual
circumstance of the companys environment.
4) The measures should be observable and measurable
which have quantitative terms. And this criterion
ensures that measures can be applied to the analytic
method.
In short, measure must be a simple, intuitive, and easy to
evaluate the performance. And measure has to be pervasive
which represent to the circumstance of the system.
B. Metrics Characteristics Related with the
Manufacturing Performance
The metrics are very important source of the performance
measurement, because most of the performance measure is
evaluated by the metrics. There should be inefficiency and
disruption in manufacturing interactions, if metrics are
falsely collected or misaligned. Therefore, appropriate
metrics should be extracted. The appropriate performance
metrics can be used to evaluate the probability of success in
achieving the target, to provide advice or corrective
suggestions to the organization, to evaluate the internal input
and output [4].
best suit the operational level context are required. Finally,
the metrics are to drive the effectiveness of manufacturing
decisions.
Extracting the effective metrics follows this procedure:
First, Identify the defining elements and different metrics.
Second, Position the metrics within the operations
management research environment. Third, identify the
special research challenges associated with metrics. Finally,
introduce the articles that comprise the special issues [6].
III. SCOR MODEL
A. Introduction of the SCOR Model
The supply chain operations reference (SCOR) model is a
 International Journal of Innovation, Management and Technology, Vol. 5, No. 1, February 2014

business process reference model. It covers all elements of
demand satisfaction process that begins with the initial signal
of demand and ends with the final signal that demand has
been satisfied. The SCOR model integrates the concepts of
Business Process Reengineering, benchmarking, process
measurement. Adopting the SCOR model is helpful for
mangers to standardize the description of supply chain, which
is useful to form a unified understanding.
The SCOR model advocates hundreds of performance
metrics used in conjunction with five performance attributes:
Reliability, responsiveness, flexibility, cost, and asset metrics
[7]. The structure of the SCOR model includes four levels
that represent the companys activity covering front-end and
back-end. SCOR model presents the five primary
management processes: Plan, Source, Make, Deliver, and
Return. Fig. 4 presents the structure of the SCOR model
primary process.
Fig. 4. The end to end processes of the SCOR model.
we consider the Make primary management process. And J.
What presents manufacturing related aspects in SCOR model
[8]. This study enumerate the metrics in terms of 3 processes:
Make to Stock, Make to Order, and Engineer to Order. And
each aspect includes many financial and nonfinancial
metrics.
B. Problem Definition
There are too many metrics in the SCOR model. And this
problem makes some problems.
1) Large number of metrics makes it difficult to identify
the actual circumstance.
2) SCOR model does not present the connecting method
between performance measurement and the information
system.
3) Those metrics have inter-correlated relationship,
because metrics are organized in the hierarchical
structure.
4) Those metrics cannot be measured by data-set based and
it brings about the additional work if they take a
performance measurement
To solve those problems, this study reorganizes the
operational metrics taking about 64 metrics. And we also
present the method of the automatic performance
measurement method by adopting the RFID technology.
Inserting the performance measurement method into the ERP
system may reduce the additional work conducted for
performance measurement.

TABLE II : SCOR MODEL ASPECTS (MANUFACTURING) [8] IV. MANUFACTURING PROCESS AND ENTERPRISE
RESOURCE PLANNING (ERP) IN PERFORMANCE
Process Aspects
MEASUREMENT
Cash to Cash Cycle time
Cost of Goods Sold In an attempt to provide a better understanding of how the
Cost to Make manufacturing function can be used to support corporate
Downside Make Adaptability objective, this figure shows the overall process of company
Make to Stock Make Cycle Time
(M1) Order Fulfillment Cycle Time
activities.
Return on Supply Chain
Fixed Assets
Return on Working Capital
Upside Make Adaptability
Cash to Cash Cycle time
Cost of Goods Sold
Cost to Make
Downside Make Adaptability
Inventory Days of Supply
Make to Order
Make Cycle Time
(M2)
Order Fulfillment Cycle Time
Perfect Order Fulfillment
Return on Supply Chain
Fixed Assets
Return on Working Capital Fig. 5. Flow chart of the overall process.
Upside Make Adaptability
Cash to Cash Cycle time
Cost of Goods Sold
From the sales and marketing functions to the customer
Cost to Make order status, many processes are participated to complete the
Downside Make Adaptability activities. And those overall processes are area of the SCOR
Engineer to Order
(M3)
Inventory Days of Supply model. As we focus on the manufacturing process, we only
Make Cycle Time consider Inventory available, Credit Check, Production
Order Fulfillment Cycle Time
Schedule, Purchasing, Back Order, Inventory File,
Return on Supply Chain
Return on Working Capital Production [9]. And we also deal with the direct linking area
Upside Make Adaptability such as Customer Oder and Process Order, because those
activities strongly influence on the manufacturing process.
This study limited its scope to the manufacturing aspects, Since the late 1980s, many companies have been

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implemented their Enterprise Resource Planning (ERP) treated as the performance evaluation automatically.
system to improve their business performance. ERP system is Many of the activities in those systems are reported
applied to manage their activities in the core business process manually and prone to data entry mistakes forcing the system
by using common database. And the ERP systems monitor to be less reliable than it could be [12]. By taking the RFID
business resources such as cash, material, and production technology, we can take much more reliability and increase
capacity. Therefore, performance measurement can be the speed at which the data is transferred to the ERP system
executed in the ERP system, because it covers overall with a higher accuracy.
companys activities and has a common database. In order to From the supply chain, the RFID technology has been
achieve measurement, key areas of a manufacturing gradually applied in the production process. For this reason
processes and ERP systems should be identified. Fig. 6 shows the appropriate design and implementation of RFID-based
the process of the manufacturing modules in ERP system. Fig. system attracts many researchers attention [13]. However,
6 includes the traditional manufacturing planning and control there are very few real case applications that can be examined,
(MPC) system [10] and several components with the view such as RFID-based production process monitoring and
point of performance measurements. analysis [14]. In the score model driven system, RFID
technology is helpful for tracking and tracing of all entities
automatically, including materials, WIP, the location of fixed
and mobile resources, etc [13]. The tracking of
manufacturing process realizes the resource management and
performance measurement much more efficiently and
automatically.
In order to achieve this, we introduce the RFID-based
performance evaluation metrics which integrates the
operational process and ERP system. RFID devices are
deployed to the shop process, conveyors, batch, pallets, etc.,
and those are converted as the meta-data. And meta-data are
able to be translated as the performance metrics which act as
the measurement of the operational process.
We analyzed the SCOR model 9.0 version and extracted
metrics which are able to link between operational level and
Fig. 6. Process of the manufacturing module in ERP. RFID criteria. Table III presents the SCOR model metrics
related with RFID [15].
As shown in the Fig. 6, sales and operation plan links the
design of a firms MPC system with its business strategy. TABLE III: SCOR MODEL METRICS RELATED WITH RFID
And this plan acts as the input data of the Master Production Attributes Operational metrics
Scheduling (MPS). MPC system includes Material % Item Location Accuracy
% of products meeting specified
Requirement Planning (MRP) and other planning processes. Environmental performance
Finally, all of the processes are concentrated on the % of products with proper environmental
Measurement of Performance. If bad performance is detected Reliability labeling
% Orders/ Lines Processed Complete
during the business process, appropriate managerial decision % Product Transferred without Transaction
may not be available until the decision may have to be made Errors
based on activities outside of the system. This result will Schedule Achievement
Balance Production Resources with
bring about bad responsiveness in the dynamic Production Requirements Cycle time
manufacturing environment. By this reason, appropriate Manage In-Process Products Cycle Time
performance measurement is important to accomplish the Schedule Production Activities Cycle Time
Stage Finished Product Cycle Time
real time measurement in ERP system. And detailed Time To reach and sustain current
procedure of the performance measurement for an ERP Transfer Product Cycle Time
Responsiveness
system is suggested in next section. Verify Product Cycle Time
Finalize Production Engineering Cycle Time
Issue Material Cycle Time
Produce and Test Cycle Time
V. RFID (RADIO FREQUENCY IDENTIFICATION) Schedule Production Activities Cycle Time
TECHNOLOGY Stage Finished Product Cycle Time
RFID technology is a conceptually simple technique, manufacturing order cycle Time
Agility Additional make volume
because data is stored in RFID tags which are attached to Current source volume
objects or located in smart cards. The data tags can be % of pallets that are usable
Cost
accessed by using radio signals and presented on a display by Capacity utilization
using a portable RFID reader. Also the data in RFID tags can Inventory Days of Supply
(Finished Goods )
be transmitted automatically to an Information Technology Inventory Days of Supply
Asset
system for further processing [11]. By application of the management (Raw Material )
RFID technology, the information of manufacturing process Inventory Days of Supply ( WIP )
can be transferred to the Enterprise Relationship Planning Percentage Excess Inventory
(ERP) in real time. Furthermore the information can be

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 International Journal of Innovation, Management and Technology, Vol. 5, No. 1, February 2014
Most of the metrics take charge of activities such as
inventory management, cycle time management, pallet
management, production process control, sorting order, and
production flexibility management. Meta data created by
RFID can be interchangeable with SCOR model. And those
data can be translated into the performance measurement in
the ERP system.
Considering those metrics, we designed the procedure of
the performance measurement in ERP system. The SCOR
model, RFID technology, manufacturing system, and ERP
system are also considered. This figure presents the
procedure of the performance measurement in ERP system.
Fig. 7. Procedure of the performance measurement in ERP system.
From the SCOR model, there are five primary
management processes: Plan, Source, Make, Deliver, and
Return. And Make process includes operational metrics
which represent the manufacturing process environment.
Management level which has strategic, tactical, operational
level considers Planning, Execution, Enabling activities. In
the scope of the SCOR model, there are many data
considering the circumstance of the manufacturing
management. And the adoption of RFID technology makes
meta-data regarding the shop circumstance such as cycle time,
pallet speed, etc. Production data, which is received from the
low level manufacturing system such as Manufacturing
Execution System, Batch system, etc., acts as the other source
of the performance measurement. Finally ERP system
database included information of management status also
acts as the performance measurement. Those metrics are the
source of the performance measurement in ERP system. And
the result of the measurement will transmit to the
management level. This feedback loop works as the
continuous improvement motivation within the companys
activities.
VI. CONCLUSION
While the performance measurement studies present the
metrics without considering of the gap among strategic,
tactical, operational level. This study arranged the refined
operational level metrics and connects the RFID related
measurement.
We analyze the process of the manufacturing module in
ERP system. And the result of the analysis is that a procedure
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has been developed which attempts to explain the mechanism
of the performance measurement in ERP system. This
procedure links different measures of operating performance:
RFID, SCOR, Production, ERP system. Performance
measurement will be executed automatically with effectively
and high accuracy, if this procedure works well.
Further research is required for some reasons. First,
extracting the operational metrics regarding SCOR model
and RFID technology should be completed by the design of
the hierarchical structure. Then, detailed implementation
method to adopt in ERP system is to be developed. Through
the further research, we are able to draw the new system
architecture for automatic performance measurement.
ACKNOWLEDGMENT
We would like to acknowledge the support by the ASRI
(Automation and Systems Research Institute) in Seoul
National University in the form of resources and
administrative support.
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 International Journal of Innovation, Management and Technology, Vol. 5, No. 1, February 2014
Gyusun Hwang was born in Kwangju, Republic of
Korea on 29th October 1986. He received his
bachelors degree in management information system
from HanYang University, Seoul on 2011. At 2011,
He entered the graduated school of Seoul National
University. And He received masters degree in
industrial engineering from Seoul National University
in 2013. Now, He is in Ph. D. course of Seoul National
University. His research interest is in manufacturing
system, Management Information System, and performance measurement.
Sumin Han was born in Seoul, Republic of Korea on
January, 1st, 1985. He got bachelors degree in
industrial engineering from Seoul National University,
Seoul on 2010. At 2010, He entered the graduated
school of Seoul National University. His research
interest is in manufacturing system, software
development process, and emergency logistics.
Now, He is in Ph. d. course of Seoul National
University. He participates in the various research
projects related to manufacturing system and emergency response systems.
55
Sungbum Jun was born on 21st July 1987 in Seoul,
Korea. He received his bachelor's degree in industrial
engineering from Seoul National University.
Since 2012, he has studied for his master degree in
industrial engineering at Seoul National University.
His current research interests are in manufacturing
systems engineering, simulation and scheduling.
Jinwoo Park was born in Seoul, Korea on December,
18th, 1952. In 1985, he received a Ph.D. degree in
industrial engineering at University of California,
Berkeley and now he is a professor of Industrial
Engineering at Seoul National University.
His current research interests are in manufacturing
systems engineering, simulation, scheduling,
Enterprise Resource Planning/Supply Chain
Management and Flexible Manufacturing
System/CIM. He is a member of Institute of Industrial Engineers (IIE),
Society of Manufacturing Engineers (SME), Association of Computing
Machinery (ACM), Institute of Electrical & Electronic Engineers (IEEE),
American Production & Inventory Control Society (APICS).