Sustainable Solutions for SCM

This short overview of the developments shows that the tasks and aims that can be associated with performance measurement and management systems have been expanded over time. In the following paragraphs, an overview of the understanding of the main terms (performance measurement, performance, performance measures, performance measurement system and performance management) will be given and the elements of PMMS will be structured based on a literature analysis. 3.1.2 Definitions The literature offers a variety of definitions for the termperformance measurement. In a very general sense, it can be defined as “the process of quantifying efficiency and effectiveness of action” [41] or “the systematic assignment of numbers to entities” [58]. Some authors focus on more detailed aspects, such as: “performance measurement focuses and coordinates the decision-making activities of the knowledge workers to whom a company has delegated decision making responsibility by designing, monitoring and evaluating coherent, comprehensive performance measures” [3] or “performance measurement is an analysis of both effectiveness and efficiency in accomplishing a given task. All evaluation is in relation to how well a goal is met” [39]. Most of the definitions have in common, that performance measurement refers to the process or the associated activities of evaluating the performance of an entity. However, differences or areas to be specified arise in the aspects of which activities encompass the process, which entities or objects are the focuses of the measurement and how (broadly) is performance defined. While the first two aspects will be discussed together with the terms management and system, Neely et al. suggest in a quite general manner that performance “can generally be seen as the efficiency and effectiveness of actions within a business context. Effectiveness is compliance with customer requirements, and efficiency is how the organisation’s resources are used to achieve customers’ satisfaction levels” [41]. In the section on KPIs a more detailed view on different aspects of performance in supply chains with special regard to sustainability is presented, so that the term performance can be defined here in a broader sense – with regard to the definition of quality – as the ability of an organisation to fulfil – internally set or externally defined – goals. Those goals can be given in a wide number of areas. A common instrument when assigning numbers to entities are performance measures that have to be chosen, implemented, and monitored. Performance measures or indicators are defined as metrics used to quantify the efficiency and/or effectiveness of actions of part or of an entire process or a system in relation to a pattern or target [41]. In this sense, it is important to mention that only a quantification of the different areas or elements of the performance is able to make them comparable and thus manageable. We will see that there are different forms of quantifying performance elements. When taking into account the fact that performance is not only a single metric but consists of a multitude of dimensions, it is useful to combine several metrics in a performance measurement system. Often used instruments are KPI systems, value driver trees or balanced scorecards. Generally, a system consists of several elements that are somehow linked to each other. A performance measurement system can thus be defined as “the set of metrics used to quantify both the efficiency and effectiveness of

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