CRITICAL SUCCESS FACTORS FOR

WORLD CLASS MANUFACTURING

PERFORMANCE MEASUREMENT

By
Abhijeet K. Digalwar
Birla Institute of Technology and Science, Pilani

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Critical Success Factors for WCM
 Lynch and Cross (1991)
market share and growth, along with internally focused
measures of profit, ROA, and shareholder value.

 Maskell (1992)
quality, cost, delivery reliability, lead time, flexibility, and
employee relationships.

 Flynn et al. (1994)

Top management support, quality information, process
management, product design, work force management, supplier
involvement and customer involvement.

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Contd…
 Kasul and Motwani (1996)
Management commitment, Quality, Customer
service, Vendor and material management,
Advanced technology, Facility control,
Flexibility, Price/cost leadership and Global
competitiveness.
 Wee and Quazi (2005)
Environmental Related

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 Authors/Researchers 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Enrique, M.V. (2005) √ √ √ √

Fynes et al. (2005) √ √ √ √

Gosselin (2005) √ √ √ √ √ √ √

Hass et al. (2005) √ √ √ √ √

Hung et al. (2005), √ √ √ √

Lin and Tseng (2005) √ √ √ √ √

Madhu N. (2005) √ √ √

Mosey, S. (2005) √ √

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 Walsh (2005) √ √ √ √

Wee and Quazi (2005) √ √ √ √ √ √ √

Wong (2005) √ √

Abdel-Maksoud, A.B. (2004) √ √ √ √ √ √ √ √ √

Anderson and McAdam (2004) √ √ √ √ √ √ √

Beatham, S. et al. (2004) √ √ √ √ √ √ √

Bose, R. (2004) √

Chan P.C. and Chan P.L. (2004) √ √ √ √

Dabhilkar and Bengtsson (2004) √ √ √ √

Duncan and Elliott(2004) √ √ √ √

Gilleard and Yat-lung P(2004) √ √ √ √

Gomes et al. (2004) √ √ √ √ √ √ √ √

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 S. No. Critical Success Factor S. No. Critical Success Factor

1 Top management 9 Quality

commitment
2 Knowledge Management 10 Flexibility
3 Employee Training 11 Speed
4 Product Design and 12 Cost
Development
5 Employee Empowerment 13 Customer Involvement
6 Environmental Health and 14 Customer Satisfaction
Safety
7 Supplier and Material 15 Customer Service
Management
8 Production Planning and 16 Company Growth
Control

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Top Management Commitment

Top management acts as a driver of WCM

implementation, creating values, goals, and
systems to satisfy customer expectations and
to improve an organization’s performance.

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Knowledge Management

knowledge allows the making of

predictions, casual associations, or
descriptive decisions about what to do
The knowledge created in a company
should be reused in order to improve
business process performances

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Employee Training
Employees to be trained in skills that are
required to fulfill their WCM responsibilities
and achieve their goals. Educate employees
to increase their WCM awareness. Training
scope and content should also be regularly
reviewed and improved. Resources must also
be allocated for training

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Product Design and Development
 Involvement of all departments in design
reviews, emphasis on producibility and
introduction of innovative products and
technology

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Employee Empowerment
The importance of giving employees both the
ability and the responsibility to take active
steps to identify problems in the working
environment that affect quality or customer
service and to deal effectively with them.

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Environmental Health and Safety
Environmental information must satisfy four
main criteria;
timeliness,
accessibility,
accuracy, and
relevance.
An effective information management system
is established to collect and maintain
environmental, health and safety related
information
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Supplier Management
Supplier performance examines in terms of
reliability, competence, and cooperation and
will be based on information on the
performance of supplied components,
supplier relationships, and delivery accuracy.

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Production Planning and Control
 This construct deals with how an organization
designs and introduces products and
services, integrates production and delivery
requirements and manages performance of
suppliers. This is judged based on the
information on supplier quality management,
process flow management, product/ service
design, and benchmarking.

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Quality
Performance measures related to quality can
focus on preventing the production of non-
conforming products before shipment to the
customer and determining the consequences
of non- conforming products discovered by
customer.

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Flexibility
Includes the ability to respond quickly to
changes in customer demand and product
design changes

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Speed
Two main items of speed have been of
interest: delivery speed and the speed in
getting new products to market.

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Cost
Operating expenses defined as all the money
the system invests in converting inventory
into throughput. These costs include the
normal indirect costs such as burden and
overhead but also include direct labor costs,
which have traditionally been considered
variable costs.

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Customer Involvement
Key to continuous improvement is maintaining
a close relationship with the customer, in
order to fully determine the customer’s needs,
as well as to receive feedback on the extent
to which those needs are being met.

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Customer Satisfaction
Customer satisfaction measures provide
feedback on how well the company is doing.
The importance of customer satisfaction
probably well the company is doing.

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Customer Services
Many services sometimes referred to as
service products are intangible in nature and
comprise a combination of the customer’s
experience of the service and the outcomes
of the service

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Company Growth
This factor covers the increase of market
share, competitive position, and the capability
of staying in its business as well achieving the
world class status

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 Top Management Commitment
•Top management plays key role for resource
allocation
•Top management controls activities through
visibility
• Top management is responsible for planning for
change
•Top management monitor the progress
•Top management is responsible for corporate
quality culture
•Top management participate in manufacturing
improvement process
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 Knowledge Management
•Availability of resources for KM
•Organization culture suitable for KM
•Willingness of employees to share knowledge
•Extent of communication methods/ techniques
used for KM
•No. of times the knowledge has helped to solve
problems
•KM helps to reduce response / Lead time,
reduction in rejection, process cycle time
•Presentations, meetings, discussion etc. organized
by communities helps to create new knowledge
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 Employee Training
•. Availability of resources for training
•Frequency of training and retraining
•On-the job training, given by in-house trainer
•. Inside the company, given by in-house trainer
•Inside the company, given by outside trainer
•Application of specific skills
•Extent of training on Business objectives, Sales
techniques and customer attention, Market and
customer knowledge, Product knowledge,
Maintenance, Total quality, Job safety
•Number of training hours per worker
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 Innovation and Technology
•. Introduction of new product
•Method for process change
•Development in manufacturing processes
•Design for material recycling
•Design for disassembly
•Development of environmental friendly product
design and packaging

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 Employee Empowerment
•. Workers authorized to inspect their own work
•Workers encouraged to solve problems
•Employee satisfaction index
•Technical assistance given to workers for solving
problems
•Extent of quality circles’ usage
•Extent of cross functional teams’ usage
•Availability of reward system

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 Environmental, Health and Safety
•. Number of recordable injuries / illnesses and
number of lost workday cases
•Reduction in amount of hazardous waste
generated and quantity of toxic chemicals released
•Investment in safety (Safety training budget)
•Levels of communication about health and safety
issues
•Health and safety policies
•Health and safety auditing

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 Supplier Management
•. Extent to which you select suppliers based on
quality rather than price or schedule
•Thoroughness of your supplier rating system
•Extent to which education you provide to your
suppliers
•Extent of technical assistance you provide to your
suppliers
•Involvement of suppliers in your product
development processes
•Extension of long-term contracts to your suppliers
•Clarity of specifications provided to your suppliers
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 Production Planning and Control
•. Use of acceptance sampling to accept / reject lots
or batches of work
•Extent to which preventive / productive
maintenance work carrying
•Use of statistical tools in the control of processes
•Extent to which inspection, review or checking of
work is automated
•Stability of product schedule / work distribution
•Responsiveness to urgent deliveries
•Extent to which process design ‘fool-proof’ and
minimize chances of employee errors
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 Quality
•. Development of quality policies and system
•Effectiveness of quality department in improving
quality
•Encouragement of a company- wide culture
committed to quality improvement
•Utilization of quality staff professionals as a
consulting source
•Product reliability, durability, functionality relative to
competitors
•Consistency in quality

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 Flexibility
• Rapidly change production volume
• Rapidly change product mix
• Rapid method process change
• Ability to perform multiple task efficiently
• Extent to which quality is unaffected by
mix/volume changes
• Percentage change of order without lead time
change

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 Speed
• Time from customer’s recognition of need to
delivery
• Extent to which concurrent engineering usage
• Time to replace tools, change tools ,assemble or
move fixtures
• Percentage of output/desired output
• Percentage of improvement in response time
• Use of e-procurement
• Extent to which the multipurpose tools usage
• Customer dissatisfaction time attainment

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 Cost
• Percentage of reduction in production cost
• Percentage of reduction in cost related to labor,
material, material handling, distribution,
transportation, storage, energy
• Percentage of reduction in after sales service
cost Warranty/guaranty replacement cost)
• Percentage of reduction in total number of data
• Percentage of reduction in maintenance
cost(Equipment failure cost, breakdown cost,
repair or rework cost, spare parts inventory
cost)
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 Customer Involvement
• . Interaction with customers
• Feedback on quality ,delivery and price
performance
• Responsive to customers’ needs
• Survey on customers’ requirements
• Conducting customers meet

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 Customer Services
• Quality of consumer service
• Customer service representative’s attitude
• Customer service representative’s skill of
handling problems
• Customer service representative’s knowledge
• Quick transfer of problem to the person who
could solve the problem in the best way
• Use of information and communication system
for customer service
• Reliability of condition of product

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 Customer Satisfaction
• Customer satisfaction by product features,
Product Quality, Product cost ,Product durability
,reliability
• Usage Experience( service , warranty , repair
help desk ) after purchase
• Availability of Product
• Sales by company brand name
• Distribution network
• Products recommended by customers

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 Company Growth
• Profitability
• Increase in market share
• Reputation of organization in market
• Increase in number of customers
• Percentage of repeat business
• Launching new product successfully
• Increase in number of shareholders

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 Performance Measurement
Framework for WCM

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 THANK YOU

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