SELECTING KEY PERFORMANCE INDICATORS IN CONSUMER
DRIVEN ENTERPRISES:
STUDY IN HEAVY-DUTY VEHICLE INDUSTRY
Emine Zehra Yurtkulu*, Jönköping International Business School, Sweden
yuem1185@student.hj.se, *Corresponding author
Neda Rezanejad, University of Borås, Sweden
s104457@student.hb.se
ABSTRACT
This research investigates how the most effective key performance indicators (KPIs) can be
selected for a customer-oriented company in the heavy-duty vehicle (HDV) industry. It is
emphasized that there is a need for identification and utilization of KPIs based on the most
important critical success factors (CSFs) of a customer-driven enterprise in order to create
value, responsiveness, innovativeness, and differentiation. The stepwise procedure is applied
to identify the most important KPIs. Firstly, sample mission statements and vision statements
were analyzed. In the second step, CSFs of a consumer-oriented enterprise in the HDV
industry were specified. In the third step, a characteristics table with regard to CSF was
designed in the context of requirements, benefits, risk and limitation. In the fourth step, the
KPI pool with 42 KPIs was generated. In the last step of stepwise procedure, KPI value table
was established with the help of analyzed CSFs and the selected departments, which are
thought as a link between company and its customers. Moreover, as a result, there are
selected 17 KPIs. They are analyzed in the context of competitiveness, consumer-driven point
of view, and accuracy in operations. This research shows that there is a strong correlation
between mission statements and vision statements, strategic goals, CSFs and KPIs. Also, all
of these components should focus on the same idea to be able to develop a consumer-driven
structure.
Keywords: Consumer Driven, Key Performance Indicators, Critical Success Factors, Heavy
Duty Vehicle industry, Competitiveness
INTRODUCTION
The globalization in the heavy-duty vehicle (HDV) industry is evident. Vehicle producers
have spread their supply operations around the world and are selling products worldwide. In
recent years, the vehicle market has increased drastically in e.g. India, Brazil and China,
which are dominant part of the newly industrialized countries (NIC) with a rapid growth and
fairly low labor costs. Less constraints and agility in just-in-time supply services make this
industry larger in the globalization and more favorable (Frost and Sullivan, 2006). In the
global HDV market, customer and market data and information are important for every
company in order to understand the market and its potential. The holistic understanding and
benchmarking succeed the firm to achieve appropriate levels in different aspects such as
customer satisfaction (Hanman, 1997; Ittner et. al., 2003).
The HDV industry focuses on operational efficiency thus a firm focusing on the consumers
may become an innovator in this industry. This means that a consumer-oriented approach
may offer opportunity for differentiation and creation of competitive advantage. Also, if the
company focuses on demand chain management, it will turn into a pioneer in the industry
(Walters et. al., 2004). Firms in this industry are facing many challenges with regard to
environmental issues, market share, image, cost structure, and fuel efficiency.
Competitiveness in volume, price, lead-time and quality can be achieved through increase in
product customization requiring improve market mediation in the exciting structure (De
Treville et.al. 2004). In addition, the trend of globalization causes hard competition, which
leads to increased product variety and differentiation resulting in reduced product lifecycles.
These difficulties explain the recent interest of changing the mindset from supply chain
management (SCM) to demand chain management (DCM). The importance of being
consumer oriented is the starting point for the shift from SCM to DCM and it implies that
companies should aim to improve responsiveness in meeting specific consumer needs. This
change is obviously bringing complexity and cost into the supply chain.
This research investigates how the most effective key performance indicators (KPIs) can be
selected for a customer-oriented company in the HDV industry. Using the result of KPIs can
promote a standard method of performance measurement and find potentials for
improvements in DCM area (McKinnon, 2007). The study emphasizes that there is a need for
identification and utilization of KPIs based on the most important critical success factors
(CSFs) to create value, responsiveness, innovativeness, and differentiation in consumerdriven enterprises. There exists research about CSFs for various types of tasks and industries
as well as on the issue of identifying and implementing KPIs. However, research has not
targeted specific industries such as the HDV industry. Thus, there is a lack of knowledge
about the development of effective KPIs from an industry-based point of view. There is also
a lack of studies relating consumer-oriented CSFs with effective KPIs. The aim of this study
is to provide a framework that helps to identify the most appropriate consumer oriented KPIs
in HDV industry. The main research question is: “How can the most effective KPIs be
selected for a customer-oriented company in the HDV industry”. In essence, this research
addresses how measurable KPIs in the operational level can be selected to reinforce the
enterprise to be more consumer-driven.
Before continuing the context of the study should be explained. In this research customer and
consumer concepts is separated from each other. In general, the customer is a potential buyer
but not necessarily the final user of the product and the consumer is a value receiver in form
of the final user. This is also the case in the HDV industry where there are two types of
commodity owners. The first category is private importers who buy the products to sell in the
market (considered as a customer) and the second category is exact value receivers, who buy
the product via dealerships (considered as a consumer). Being aware of the difference
between consumer and customer concepts, a short chain is considered for heavy-duty truck
automotive industry including supplier, manufacturer, and end-user.
LITERATURE REVIEW
According to Christopher et. al.(2003), increasing trend of globalization causes tough
competition in the market. As parallel with competition, product variety and attention for
customer-adapted products increase while product life cycle decreases. Companies come
across new challenges and they need to be more flexible while reacting to changes in market.
Customers have great impact on today’s business market. The alteration in customer demand
brings complexity and extra costs to the supply chain. This means that firms need to increase
their investments for satisfying the needs of customers, create value for the customers and
gain competitive advantage in the market (IBM Corporation, 2004).
The need for customer-oriented structures may be considered as a starting point for a big shift
from SCM to DCM. During this change, companies should catch the continuous trend to
improve responsiveness and meet specific needs of customers. At the same time, companies
are able to achieve cost-efficiency (Christopher et. al., 2006). It is the right time to change
strategy and create specialized demand-supply chain models, which are fast, reactive, and
designed to meet all customer demands in order to stay competitive. Porter (1996) argued that
companies have some problems during alteration process of their strategies. The failures
occur in distinguishing between operational effectiveness and strategy. Hilletofth et al. (2009)
argues that by developing a supply chain strategy, which is based upon differentiation, is the
way to meet varying needs of customers and maintain economies of scale at the same time.
Some deductions can be mentioned such as, in order to gain competitive advantage,
companies should get a deep understanding of which components should be rearranged in
current business environments. It is obvious that changed market environment asks
companies for an appropriate strategy in order to find its’ own market niche and stay
competitive.
When we come to CSFs, it is a crucial activity to define CSFs because they help companies
achieving their missions and strategic goals of the organization. Some success factors can be
obvious while others invisible. There exists many different definitions for CSFs. Bullen et. al.
(1981) mentioned CSFs as not overwhelming in numbers but players of a significant role in
the success of an individual, group or organization in a competitive environment. CSF detects
performance areas, where managers must continually manage, and the issues, which provide
a healthy and vital environment for the organization. CSFs are described as the most
important components of strategy implementation. Brotherton et. al. (1996), see CSFs as the
vital points that the company must reach or focus on which areas will bring the maximum
“competitive leverage”. It is very common that CSF are confused with strategic goals, and to
avoid this confusion. Brotherton et. al. (1996) emphasize that CSFs are not equal to goals, but
they are more related to activities and performing processes that can be administered/affected
by managers to achieve goals of the company. Based on the best practices in the market, it is
suggested that there should be limited number of CSF, perhaps between five and eight
(Parmenter, 2007). Definitions provided by earlier researches have one common feature –
they emphasize obtaining a competitive edge.
As Parmenter (2007) pointed out, the need of an organization is to define KPIs in order to
focus on aspects, which are the most crucial for the current and further success of the
company. Any business, regardless of industry and size, can better manage market
performance with the help of performance measurement metrics (Parmenter, 2007). Bauer
(2004) stated KPIs are quantifiable metrics, which reflect the performance of the organization
while reaching its goals and objectives. Companies should identify KPIs in the light of CSFs
and strategic objectives in order to link actual performance and expected results to CSFs. As
Parmenter (2007) argued that KPI should be related to the organization’s CSF and objectives
to be called as a performance measurement tool. After identification of the right CSFs, it is
easy to define KPIs, just because of the reason that they will exist within chosen CSFs.
Furthermore; Bauer (2004) adds that all individuals involved in the business processes of
organization are moving in the same direction of achieving the same goals and strategies.
Today, due to strong competition, globalization and technology development, firms have no
choice but to operate in a changing environment, which leads to dealing with plenty of
different performance indicators. This resulted in development of different methods of setting
up and prioritizing KPIs. The questions about KPI prioritization and the number of KPIs are
the most popular ones in the literature. There should be a limitation on the number of KPIs.
No more than 20 KPIs are recommended. Organizations, which have more than 20 KPIs, lack
focus and do less than expected (Kaplan & Norton, 1996; Parmenter, 2007). While
prioritizing KPIs, it is important to remember that KPIs for a company may differ depending
on the nature of the business and its strategy. Nevertheless, literature review suggests that the
standardized method is missing for KPI prioritization.
Consumer-driven enterprises must continuously enhance value for a customer by developing
value-adding products and services to gain competitive advantage (Hilletofth et al., 2009).
Furthermore, selected KPIs may give an idea to customers about companies’ way of doing
their jobs in order to improve customer service level by increasing value added activities.
METHODOLOGY
A framework for KPI selection in HDV industry was developed to provide in-depth
understanding of how the most effective KPIs can be selected from a consumer-driven point
of view. The objective is to show the relations between CSFs and KPIs to establish a
framework rather than doing any numerical analysis of these concepts.
A stepwise procedure was used from mission statements to KPI selection. In the first step, a
sample of mission and vision statements from some companies operating in the HDV
industry (Table 1), have been evaluated to provide a foundation for the specification of CSFs
in this industry. Some common points between these evaluated statements were found,
including value creation according to customers’ needs, long-lasting occurrence in the
market, innovativeness, and product and service excellence. It is important to note that,
mission and vision statements are not enough by themselves for developing CSFs. There are
other variables that also affect the characteristics of CSFs.
In the second step, CSFs of a consumer-oriented enterprise in the HDV industry were
specified based on the evaluation of mission and vision statements as well as a wide range of
literature (Table 2). It can be mentioned that some of the CSFs focus on the customer side
(target to achieve missions on customer side), such as responsiveness in new product
development (NPD), speeding up to deliver innovation to the market, developing marketing
channels, improving product delivery processes, value creation activities, and increasing level
of information sharing with customers. On the other hand, some of the CSFs focus on the
company side (target to achieve missions inside company) and are not directly related to
customer operations, such as continuous coordination between departments.
In the third step, a CSF characteristics table has been designed (Table 3), including aspects
such as requirements, benefits, risk, and limitation of a consumer-oriented enterprise. In
essence, this table provides in-depth analysis of the selected CSFs. This analysis has crucial
importance, since companies should be aware of that they have proper environment for
making strategic decisions.
Table 1: Sample Vision and Mission Statements.
Company
Vision
Mission
Volvo
To be valued as the world’s
leading supplier of commercial
transport solutions. (Official
Website, Accessed: November
2010)
By creating value for our customers, we create value for our
shareholders. We use our expertise to create transportrelated products and services of superior quality, safety and
environmental care for demanding customers in selected
segments. We work with energy, passion and respect for the
individual. (Official Website, Accessed: November 2010)
Scania
To deliver optimized heavy trucks
and buses, engines and services,
provide the best total operating
economy for our customers, and
thereby be the leading company in
our industry. (Annual Report,
2009; Accessed: November 2010)
Scania’s identity is shaped by its customers and products –
vehicles, services and financing – and by the people in the
company, their values and working methods. Three core
values − “customer first”, “respect for the individual” and
“quality” − tie the company together and form the basis of
Scania’s culture, leadership and business success. . (Annual
Report, 2009; Accessed: November 2010
Man
To be number one in commercial
vehicles and power engineering
(Official website, Accessed:
November 2010)
The MAN Group places its customers' requirements and
expectations at the center of its corporate strategy. Our
products and the services that accompany them throughout
their entire life cycle are nothing less than high quality.
From the very first moment of contact, we respond to our
customers' specific requirements and work together with
them to create customized solutions. (Official Website,
Accessed: November 2010)
Table 2: Modification of critical success factors.
Critical Success Factors
References
Responsiveness in new product development in order
to achieve competitive advantage
- Getting the right product in the right place at the
right time
- Speeding up to deliver innovation to the market
Developing marketing channels that identify specific
needs of different customers
- Market segmentation
- Product and service differentiation
Improve product delivery process in full on time to the
customers
- Increase customer service level
Value creation activities at the side of customers that
builds loyalty
- Customized and innovative products
- Brand loyalty
- Successful brand image
- Value delivery
Increasing level of information sharing with customers
- Open communication
- Customer touch point in order to enhance contact
Continuous coordination between departments
- Internally
- Externally
Childerhouse et.al. (2002), Heikkilä (2002), Jüttner
et.al. (2007)
Griffin et al. (1993) , Walters et al. (2004), AlMudimigh et.al. (2004), Jüttner et.al. (2006),
Woodruff (1997), Wang et.al. (2001), Heikkilä (2002),
Walters (2008),
Treacy et. al. (1993), Mazumdar (1993), DelgadoBallester et. al. (2000), Walker et. al. (2000), Kumar
et. al. (2000),
Burns (1995), Fundin (2003), Oleksak (2005)
Dyer et al. (1998), Lambert et. al. (2000), Simatupang
et al. (2002), Keller (2001)
Table 3: CSF characteristics table.
CSF
1. Responsiveness
in new product
development in
order to achieve
competitive
advantage
2.Developing
marketing channels
that identify specific
needs of different
customers
Requirement
Benefit
- Flexibility
- Being adjustable
- Catching new
potential markets
- Local resources
(i.e. Local
employees &
consultancy) with
the knowledge of
the market
1. EDI
infrastructure to
arrange forward an
backward relation
- Tracking and
tracing progress of
the process
- Successful
identification
different customers’
needs
4.Value creation
activities in the side
of customers that
builds loyalty
Risk & Limitations
HDV View
- Market response
to the new product
- Lack of
experience in both
new product and
new market
- Adaptation of the
partners/ suppliers
to the new strategy
of marketing
channels
- Improving the
product families
- Cost reduction:
decreasing the rate
of inventory and
back-ordered sales,
to increase customer
satisfaction
- Bullwhip effect
- Over promising
Proactive markets
research and
sensibility to the
value creation in the
whole supply chain
- Customer base
less sensitive to the
marketing efforts of
competitors
reinforcing
- The brand image
and price policy of
the product
- Customers
uncertainty or
ambiguity in the
satisfaction of
his/her consumption
expectations
5.Increasing level of
information sharing
with customers
- Transparency and
systematic
information flow
- Faster decision
making based on
updated facts
6.Continuous
coordination
between
departments
- Cross-functional
integration of
departments
- A qualified
information-sharing
system to share
required
information
- Maximize the
potential for
converting
competitive
advantage into
profitability
- Better technical
quality, faster
schedule
performance
- Leakage of
information to the
competitors/internal
and external
- Attitude towards
sharing information
- Confusion in
different role
descriptions
- Pro-long the
project time
- Organizing the
delivery related
interruptions such
as campaigns in a
structural way in the
case of having
problems with
suppliers
- Designing
packages in for of
offering complete
solutions including
soft offers for
services and extra
options for each
specific fleet
costumer
- Same systems
authorization for
both costumers and
the company
3.Improve product
delivery process in
full on time to the
customers
- Segmentation of
the market,
designing different
packages
- Face to face
meetings and
updates
- Sharing positive
results visually in
the meeting points
of the departments
- Planning common
activities
In the fourth step, a KPI pool was established. 42 different KPIs were selected based on a
wide range of literature (McKinnon et al. 2006; McKinnon 2007; Report: ISA 95, 2006) and
own experience. We desired to establish a comprehensive KPI pool, because an industrial
firm has a complicated structure and there are many processes. Companies should be able to
see different perspectives of these processes and they should be able to make detailed
performance analysis. The selected KPIs can be seen in Table 4.
In the last step of the procedure, a KPI value table has been developed (Table 4). In this table
each KPI is analyzed according to its correspondence with the selected CSFs in order to
identify relevant KPI-CSF pair. In addition, the set of departments that play an important role
in integration between the company and its customers is specified. It is important to mention
that each department in a company has unique responsibilities and they are indispensable
parts of the company. However, some of them have great importance to establish a
relationship between company’s side and consumer’s side. Specification of the departments
is a requirement to provide a better understanding while implementing KPIs on the
operational level in a consumer-oriented enterprise. This because departments are responsible
to implement CSFs and KPIs into the company’s processes and the same departments are
also responsible to measure the efficiency of KPIs during processes. During selection process
of the most important KPIs an empty cell implies that no connection or relation between the
KPI and the CSF was found. If they are related, the cell is said to be tagged and it contains
the list of involved departments. For each KPI-CSF pair, one or more departments have been
assigned. The departments considered are as follows: After sales (AS), Business solutions
(BS), Logistics (L), Marketing (M), Product development (PD), Sales (S), and Quality (Q)
Table 4: Key performance indicator value table.
KPI
1.Vehicle Fill
2.Empty running
CSF 1
CSF 2
CSF 3
CSF 5
CSF 6
AS/Q
AS
AS/Q
S/L
BS/M/L
L
PD/L
PD
PD
PD/L
PD
PD/M/S/
L
PD
CSF 4
PD
PD
3.Fuel consumption
4. Vehicle time utilization
5. Reject or return rate on finished products (quality)
M/S
6. Actual versus planned volume (order fulfillment)
7. Percentage reduction in the manufacturing cycle
time (planning and productivity)
8. Production and manufacturing schedule adherence
9. Rework and repair hours cost comparing to direct
manufacturing (quality)
10. Percentage of the automated assembly steps
(engineering and Productivity)
11. Hours lost due to technical equipment problem or
downtime (assets utilization)
12. Hours lost ratio due to material or missing parts
(assets utilization)
13. Production equipment set-up or availability time
and uptime (manufacturing)
14. Average machine availability rate or machine uptime (asset utilization and manufacturing)
15. Reject-rate reduction (quality)
16. Number of process changes per operation due to
errors (quality)
17. Percentage increase in output per employee
(personnel and staff)
18. Percentage unplanned overtime (personnel and
staff)
19. Safety and security incidents (personnel and staff)
20. Productivity based on the number of units per
labor hour (productivity)
21. Cost of supplier shortages per period (material
and supplier)
22. Variances of the material from standard units for
Non-standard vehicles (material and supplier)
23. Standard order-to-shipment lead time for major
products (planning)
24. Time required to incorporate engineering changes
(planning)
PD
AS
PD
PD/L
PD/AS/
Q
PD
Q
Q/L
PD/Q
PD/Q/S
L
Q/AS
AS
PD/Q
PD/Q
PD
PD/S
PD
PD/S
L
Q/PD
PD/BS
PD
PD/L
M/BS
S
PD/Q/L
/S
S/M/BS
PD/M/L
S/L
PD/Q/L
M/BS
M
PD
AS/Q/L
L
PD/M/
L
S/M/PD
Table 4: Key performance indicator value table (continued).
25. Turn around time
26. Average carbon dioxide emissions of vehicles by
its type (environment)
27. Number of visits of the costumer per month to
service centers for repairs: (after market)
28. Parts availability at the service centers (after
market)
29. Average production costs of units produced
within measurement period.
30. Average Unit Cost
PD
M
M
PD
M
PD/BS/
S/M
AS/BS
AS
AS/M
L
AS/L
AS
L/AS
L/M/PD
/S
L/S/PD/
S
L/M/D/
PD
M/S
31. Rate of damaged material by error of workers
PD/Q
32. Customer order cycle time based on time from the
request to fulfilling the order
33. Order to delivery fulfillment measurement
PD
M
L/M
S/L
S/L
S/L/M/
PD
S/L/M/
PD
PD/L/S
PD
M
L/M
S/L
S/L/M
34. Accuracy in request delivery date, confirmed
delivery date, actual delivery date to be the same
35. Supply chain cycle time
PD
M
L
L/S
S/AS
PD
M/S
L
M/L/S
M/S
PD/M/S
/L
L
S/M
S
S
S/M
S/M/L
S/M/PD
BS/M/L
/AS
S/L
S/AS/M
AS/L/
M/S
36. Ex-work performance
37. Accurate information on inventory levels
38. Availability of all order classes and
augmentations
39. Improved customer satisfaction
PD
M
BS/PD/
Q
M/S
M/L
M/L
L
M/L
L
40. Lower distribution costs as a percentage of order
management costs
41. Decreased transportation cycle time
42. Increasing collaboration between dealers and top
management
PD/M
M
M/PD/B
S
L
M/L
S
PD/BS/
S/M
RESULTS & ANALYSIS
As a result of the KPI value table, 17 tagged KPIs out of 42 KPIs were identified as the most
valuable and measurable guidelines, that can respond to the customers’ demands and interests
within the HDV Industry on the operational and strategic level. Selection was made between
KPIs, which have 6, 5, and 4-tagged cells (Table 5) and they were divided into 3 groups
according to number of tagged cells.
Selected KPIs can specifically be used for this industry to meet consumer demands and
satisfy their needs. The core expectations of the selected KPIs should stay aligned to help the
managers of the companies in the strategic, operational and tactical decision making
processes to gain benefits and reach the position of a high performance organization. They
can establish a guideline for the enterprises, which desire to become more consumer-driven.
The benefits of selected KPIs can be evaluated from different aspects. These KPIs provide
holistic view on the whole demand chain, adaption to consumer-driven philosophy, and
monitoring suppliers in terms of its quality, capability, credibility. The question of what they
have in common can be a guideline for the enterprises to become more consumer-driven
based on the shifts in the market. There will be made an analysis in the following parts for
selected KPIs and excluded KPIs with various reasons.
Table 5: Selected and excluded KPIs.
KPI
6 tags
5 tags
4 tags
1.Vehicle Fill
2.Empty running
Excluded
X
3.Fuel consumption
4. Vehicle time utilization
X
5. Reject or return rate on finished products
6. Actual versus planned volume
X
7. Percentage reduction in the manufacturing cycle time
8. Production and Manufacturing schedule adherence
X
9. Rework and repair hours cost comparing to direct manufacturing
10. Percentage of the automated assembly steps
11. Hours lost due to technical equipment problem or downtime
12. Hours lost ratio due to material or missing parts
13. Production equipment set-up or availability time and uptime
X
14. Average machine availability rate or machine up-time
X
15. Reject-rate reduction
X
16. Number of process changes per operation due to errors
17. Percentage increase in output per employee
18. Percentage unplanned overtime
19. Safety and Security incidents
X
20. Productivity based on the number of units per labor hour
21. Cost of supplier shortages per period
22. Variances of the material from standard units
X
23. Standard order-to-shipment lead time for major products
X
24. Time required to incorporate engineering changes
25. Turn around time
X
26. Average carbon dioxide emissions of vehicles by its type
27. Number of visits per month to service centers for repairs
X
28. Parts availability at the service centers
X
29. Average production costs of units produced
30. Average Unit Cost
X
X
31. Rate of damaged material by error of workers
32. Customer order cycle time
X
33. Order to delivery fulfillment measurement
34. Accuracy in delivery date
X
X
35. Supply chain cycle time
X
36. Ex-work performance
37. Accurate information on inventory levels
X
38. Availability of all order classes and augmentations
39. Improved customer satisfaction
X
X
40. Lower distribution costs as a percentage of order costs
41. Decreased transportation cycle time
42. Increasing collaboration between dealers and top management
X
X
The benefits of using the most prioritized KPIs, which have 6 tagged cells, can be put in an
order like that gaining a point of view for holistic planning across the chain, adapting
consumer-driven philosophy and following its progress internally and externally, monitoring
INCOTERMS, suppliers performance, capability, credibility and providing commitment to
them in order to be in the same level with the company. Companies should fulfill the
requirements of this tough competition to be alive in the market. Level of competition,
potential entrants of the market, and changes occurred in customers’ needs due to dynamic
market conditions are some points that companies take into the consideration.
The second groups of KPI, which have 5-tagged cells, highlight the importance of variation
of offers and availability of the services and/or products for customers at right place on the
right time. In addition the technological knowledge and innovation will be adding extra value
to the variety and quality of the products/services. However, service-minded and reflecting
stuff for planning in all levels (from top manager to the technicians) is also evaluated to
affect the business.
The third group of KPIs helps empowering the time and price management in sub-categories.
Also, they help having accurate and better mechanisms of controlling in planning, cost and
time reductions and finding new saving ways (methods), which will lead into improvement of
internal manufacturing processes. In addition, the future performance can be improved by
using standardized and compiled past data
The last group of KPIs are excluded KPIs. Some KPIs, which are related to the employment
conditions and regulations such as safety and security incidents and ex-work performance,
might be important in majority of countries, but it is not in focused in the rest of the countries
at the same level, therefore the related KPI has not been valued as a relevant option.
Consumers’ ways of dealing with the products after buying them and the usage purpose of
those products have been considered as an external affect in this article. The manufacturing
set-up times, machine availability rates, equipment usages and asset utilization may affect the
cost indirectly in the matter of process development, but is not having high priority from
costumer point of view and for customer satisfaction. For sure, all the aspects have important
role in the business’ processes but they are not directly related to processes, which are
achieved especially for turning the company to more consumer-driven structure. To be
mentioned that external activities done by customer and transport companies are out of the
short chain that we had defined in the framework of this study.
CONCLUDING DISCUSSION
The critical point is to be able to move on the right path, which helps finding the most
efficient KPIs. This study shows that there is a strong correlation and harmony between
mission, strategic goals, CSFs and KPIs. In order to develop a consumer-driven structure, all
components of the company such as mission and vision statements, strategic goals and
objectives, CSFs and KPIs should focus on the same idea. Especially the departments should
implement the selected KPIs strictly and also they should measure the current performance
periodically. In the light of selected KPIs, companies should be able to satisfy customers’
needs with the right product and services at the right time, and adapt themselves to rapid
changes in customer demands. Also they should perform value-added activities on the
products with the help of technological knowledge and innovative ideas. In addition, the
selected KPIs enable having more accurate control mechanisms in terms of cost and time
reductions. Competitiveness is another critical aspect for the companies. The selected KPIs
help specifying market opportunities and changes in customer preferences due to market
trends in the middle of tough competition. Companies also should keep volatile and
fluctuated customer demand in mind. In addition, the updated technological knowledge and
innovation will be adding an extra value to the variety of the product range. Additional
benefits of the selected KPIs such as providing effective control on accuracy in planning,
reductions in cost and time and finding potentials saving areas which will lead to
improvement of internal manufacturing processes. It is important to note that the KPIs should
be repeatedly measured and their periodical analysis should be done to evaluate the progress
of activities, which are executed for customer orientation and satisfaction.
Implication of the research can be grouped under three points such as theoretical
implications, practical implications and suggestions for further researches. From theoretical
point-of-view, this research targets to fill the gap of knowledge about the development of
effective KPIs. Also, this research proposed a guideline with exciting findings relating
consumer-oriented CSFs with effective KPIs. From practical dimension, the findings can be
applied in the strategic, tactical, and operational planning level of a company to gain the
competitive advantage in the market. The proposed framework can provide useful and
innovative ideas for the strategic decisions inside the company, e.g., in the new product
development and soft offers designing. Also, for decreasing the risk rate involved in the goal
setting process, KPI prioritization should be seen from a multi-criteria decision making
perspective.
For further research, more detailed investigations can be prepared for the different KPIs with
different units and scales. Developing various questionnaires and distributing them among
consumers may accomplish this aspect. Some tools for examining and testing the efficiency
of KPIs have been proposed in the literature and these could be suggested as further research
topics. Analytical Hierarchy Process (AHP) is a powerful tool for decision-making (Saaty,
1980) and, thus may be used in the process of prioritizing KPIs. Furthermore, SMART
criteria (Significant, Meaningful, Appropriate, Relevant and Time-bound) are widely used for
evaluating objectives and goals of the firm.
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