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A Study on The Development Of Key Performance Indicators

(KPIs) at an Aerospace Manufacturing Company

Article · July 2008

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 A STUDY ON THE DEVELOPMENT OF KEY PERFORMANCE
INDICATORS (KPIS) AT AN AEROSPACE MANUFACTURING
COMPANY

Effendi, M.1, Razali, M.M.1, Rohana, A. 1, and Adi, S.1

1
Faculty of Manufacturing Engineering,
Universiti Teknikal Malaysia Melaka, Industrial Campus,
Locked Bag 1200, Ayer Keroh,
Hang Tuah Jaya, 75450,
Melaka, Malaysia
Corresponding author’s e-mail: effendi@utem.edu.my

ABSTRACT : This research study focuses on the issue of the Key

Performance Indicators (KPIs) development which is linked to the goal,
objective, mission and vision of an Aerospace Manufacturing Company.
The KPIs are targeted to provide this company with a good performance
measurement tools in supporting the success of their Lean Manufacturing
journey and to be cost-competitive. In this study, a set of KPIs measured
both objectively and subjectively are developed through a comprehensive
extensive literature, internal benchmark activities and best practices
benchmark in KPIs implementation process flow. Additionally, the current
communication gap at all level was investigated by using semi-structure
interview and focus group discussion. A standard report is created to
overcome this communications issue by having each person in each level to
review and reports their standard operation to their subordinates regularly
based on agreed frequency.

Keyword: Key Performance Indicators, Lean Manufacturing, process flow,

Lean Promotion Office

1.0 Introduction
The growing global competition have made businesses around the world
more challenges and complicated than before. Every company is continually
exploring ways to of have tried to search for a solution to make them survive
and for making their business remain successful and being competitive in order
to ensure long term survival.

In order to survive the global competition, companies are improving their

streamline business process, inventories, cycle times and factors related to cost.
Factors related to cost involve reducing the manufacturing costs, strengthening
relationships with suppliers, increasing product variety and most importantly

ISSN: 1985-3157 Vol. 2 No. 2 July-December 2008 1

Journal of Advanced Manufacturing Technology

reduce the response time their customers needs and expectations. It has been
estimated that about 50% of manufacturing costs are attributed to purchase
items, the raw material account for 80% of a finished product’s lead time and
30% of its quality problems (Willis & Huston, 1990 and Doolen et.al, 2006).
All these are driven by the economic needs. The ability of manufacturing
companies to successfully overcome these problems will lead to increased
demand.

Many manufacturing companies nowadays are currently facing challenges

associated with excessive inventories, non-competitiveness, loose of market
share and inability to cater for customers’ needs on time. The past two decades
have witnessed numerous manufacturing “revolutions”, accompanied by clarion
calls for universal adoption of some new paradigm such as Manufacturing
Resources Planning (MRPII), Just in Time (JIT), Optimized Production
Technology/Theory of Constraints (OPT/TOC), Flexible Manufacturing
Systems (FMS), Total Quality Management (TQM), Lean Manufacturing,
Agility, Time-Based Competition (TBC), Quick Response Manufacturing (QR/
QRM) and Business Process Re-Engineering (BPR) (MacCarthy & Wilson,
2001). The alternative implemented by the aerospace manufacturing company
investigated Lean Manufacturing, which means waste elimination.

The purpose of this study is to focus on the issue of the KPIs development
which is linked to the goal, objective, mission and vision of Aerospace
Manufacturing Company. The KPIs are targeted to provide this company with
a good performance measurement tools in supporting the success of their Lean
Manufacturing journey and to be cost-effective.

In this study, a set of KPIs measured both objectively and subjectively are
developed through comprehensive literature review (case study reports), internal
benchmark activities and best practices benchmark in KPIs implementation
process flow by visiting a non – competitor company followed by a workshop
where company KPIs had been identified and developed through brainstorming
and group discussions.

There are very few researches in terms of the development of KPIs in the
aerospace industry especially in Malaysia because not many aerospace
industries had been established. This study will attempt to in exploring the
concept of KPIs in aerospace industry in Malaysia.

This study will also investigate the current communication gap at all level using
semi-structured interview and focus group discussion. A standard report was

2 ISSN: 1985-3157 Vol. 2 No. 2 July-December 2008

 Manufacturing Process, Technology and Design

also created to overcome this communications issue by having each person in

each level to review and reports their standard operation to their subordinates
regularly based on the agreed frequency.

1.1 Lean Manufacturing

Lean manufacturing has been introduced by Womack (Womack et.al,1990)
which describes the TPS (Toyota Production System) developed by Eiji Toyoda
and Taiichi Ohno at Toyota Motor Company in Japan. Taiichi Ohno, one of co-
developers of the Toyota Production System; according to Kilpatrick, (2003)
have suggested that “waste accounts for nearly 95% of all costs” and that is
why Lean Manufacturing is practised to reduce the non-value added activities
produced by an organization or factory (Comm & Mathaisel,2005). The
philosophy of Lean Manufacturing can therefore be illustrated using Toyota
Production System as an example (Burcher et.al, 1996).

The term ‘lean’ is used due to the majority of all activities are doing less
compared to mass production techniques such as deducting half of the labour
hours, factory space and tooling investment (Burcher et.al, 1996). New
products can also be developed with less engineering hours. This principle is
not only successfully applied in automotive industry but also in other sectors,
including aerospace industry (across Europe and North America) (Haque &
Moore, 2004).

The aerospace manufacturing company under study have established a Lean

Promotion Office (LPO) to promote Lean Manufacturing culture as company
wide activities and to monitor all lean activities in the production floor and
report the progress to top management to drive cost reduction. In addition,
LPO which is under Strategic Development Department (SDD) is responsible
to organize internal lean manufacturing training and workshop in terms of
principles, basic approach, tools and techniques, 7 wastes based on quality,
cost, delivery, accountability and continuous improvement targets.

1.2 Performance Measurement

Performance measurement is capable of providing a basic comparison over
the time required to point out whether performance has improved, deteriorated
or simply remained static (Theodore, 2003). Performance measurement is not
static. It changes due to variation in performance issues such as change in
marketing strategy, change in as technologies and the means to measure and
record performance over the time (Smith, 2007).

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Journal of Advanced Manufacturing Technology

There are approximately six types of performance measurements tools and

technique such as Cross and Lynch’s Strategic Measurement Analysis and
Reporting Technique (S.M.A.R.T), Dixon, Nanni and Vollmann’s Performance
Management Questionnaire, Maskell’s Performance Measurement for
Manufacturing , Globerson’s Performance Criterion System, Neely, Gregory
and Platt’s Cambridge Performance Measurement Design System, Kaplan
and Norton’s Balanced Scorecard and lastly Enz’s Human Capital accounting
(Kandula,2006).Each of these techniques has their own advantages and can
offer some valuable lessons for developing measurement. For example,
measurement must be aligned with strategy, must have balanced between
qualitative and quantitative methods, must be easy and simple, have clear
framework and lastly measurement as means for growth. This information will
be used in this research with the aim of developing new framework of KPIs.

1.3 Key Performance Indicators (KPIs)

KPIs is one of the tools for evaluating the performance measurements. One of
the reasons for the success of company in implementing lean manufacturing is
the performance measurement culture that already exists and established in it
(Haque & Moore, 2004).Smith, (2007), defined KPIs as measures of success
or compliance. It is one of the tools in performance measurement systems
that currently had been chosen by many industry analysts, organisations and
enterprises. Measuring the performance of any operation needs KPI intervention
especially in an industry which performance metrics exist.

KPIs allow a company to see what areas it is executing well and what areas require
improvement. What ever KPIs selected, they must reflect the organisations
goals, they must be key to success, and they must be quantifiable (measurable).
Lastly, with good KPIs as one of the performance measurement system tool,
companies or organisations can be self-assured with their manufacturing tools
and techniques implementation for achieving their goals or objectives. Hence,
good KPIs must be clear, able to be gauged or measured with specific aim.

2.0 Research Methodology

This study was carried out in a systematic manner and implemented according
to the flow chart of research framework shown in Figure 1-0 that includes all
techniques that were used to gather all the data and information to support
the research. This research started with identifying the problem statement,
specifying the objectives and scopes of the research, followed by semi-structured
interview technique with top management (GM) and focus groups discussions

4 ISSN: 1985-3157 Vol. 2 No. 2 July-December 2008

 Manufacturing Process, Technology and Design

with approximately 20 shop floor leaders (Head of Department (HOD)/ Head

of Section (HOS)/Engineer/Executive/ Team Leader).These techniques were
used along with direct observation of the plant operation for collecting the
earlier primary data (Gap analysis) not only in the approach of developing
KPIs and but also to study and investigate the current communication gap at
all level in the company. Next step is the benchmark process, where it will be
done internally and in Non-competitor Company locally which successfully
implement their KPIs. The reason for choosing the non-competitor company
is because there is no benchmarking data available for the same industry
(aerospace) in Malaysia in terms of development of KPIs.

Internal benchmark was carried out by identifying best historical performances

to be set as an initial base for measuring performance. To ensure that this project
is still in the right track, a visit to a non-competitor company which has been
successful in the KPIs implementation was done to benchmark the company’s
KPI implementation process flow. Furthermore, to enhance the above method,
detail review of literatures from many sources such as journals, web sites,
case study reports, newspapers, articles and also magazines (secondary data)
was carried out. The inputs from the semi-structured interviews, focus groups
discussions, benchmarking and literature review were used in the two days
workshop where company KPIs were established through brainstorms and group
discussions. Finally, after getting the result and analysing it, recommendations
and conclusions were made for further work in the final report.

3.0 Findings and Discussions

3.1 Identify the current communication gap at all level. (Gap

Analysis)
Based on semi structure interview with the General Manager and focus group
discussions with HOD/ HOS/Engineer/Executive and Team Leader in the job
floor (Gap Analysis), it was noted that there was no common interpretation of
mission statement and vision among the employees, thus a misunderstanding
of the company’s goal and objective. When this occurred, there appeared to
be a misalignment especially between the company’s goal and the operational
strategy. Employees were doing their jobs without clear expectation about
the outcome and the employer was not maximizing the effectiveness of the
resources.

ISSN: 1985-3157 Vol. 2 No. 2 July-December 2008 5

Journal of Advanced Manufacturing Technology

Start

(Secondary Data)
Literature Reviews
Identified Problem Statement & (Journal/Websites/Books/
Specified the objectives and Scopes for this research Articles/ Examples of Case Study/Magazines/
specified Newspaper & etc.)

Semi-Structure Interview
& Focus Group Discussions (Gap Analysis) No
Yes
Satisfy

No
Internal Benchmark & Yes
Benchmark of Best Practices Satisfy

No

Review Workshop Yes

Regularly Satisfy
(Brainstorms and Group
Discussion)

Development of company
KPIs

No

Identify pilot areas Satisfy

Yes

Measure Conclusions & Final

Results Recommendations Report
Future Work

Finish

Figure 1-0: Flow chart of research framework to develop Key Performance

Indicators (KPIs)

Additionally, communication was also a problem between the employees and

the top management. It could be approximated that there was least efficiency of
communication between the top management and the employee. This problem
was very serious because without communication and relationship, we could
not built and improve the company. Sometimes it makes the introduction
of certain new forms of organization or programme fail. And even worse,
majority of the employee only knew some news about their company in term
of problem, performance or the introductions of new company product from
local newspaper and not from their top management announcement.

Actually, this communication breakdown was due to lack of standardized

reporting from the ground level to middle and subsequently the top management
personnel such as General Manager (GM) and Head of Department (HOD).

6 ISSN: 1985-3157 Vol. 2 No. 2 July-December 2008

 Manufacturing Process, Technology and Design

Standardization of reporting was very crucial because it was a way to make

everybody in the company aware of the happenings in the company. Each
level of employees had to report to their own subordinate at a fixed timing
on matters pertaining their daily jobs. This way, communication breakdown
could be reduced and any problems could be detected and corrected earlier
and efficiently.

There was also unclear ownership of responsibility among employees. Their

job scopes were indistinct because they did not have specific job descriptions.
Overlapping of responsibilities also occurred. This was worsened by improper
description of job role. The top management was unable to simply give a task
to their subordinates and vice versa because there was no formal declaration
of their job scopes. Employees perform their task as they wish and without
proper guidance leading to difficulty to measure their achievements and efforts.
This was partly caused by lacked of targets set to appraise them and lack of
measurement system to evaluate and gauge employee performance. In terms of
production, data tracking between the production and the management levels
was also lacking resulting to communication breakdown.

After knowing the current scenario in the company based on gap analysis, the
next step in developing new KPIs framework of the company was benchmarking
process. This includes the internal benchmark and best practises approach.
This step was essential in providing a rough idea to the team member regarding
company KPIs framework development apart from gathering information from
literatures that had been carried out previously.

3.2 The development of KPIs framework aligned to all level towards

company goal, objectives, mission and vision.

3.2.1 Internal Benchmarking Activity

From the internal benchmarking activity, historical data for each department
had been printed out. Each department showed their current measurement in
each activities or process they carried out in the past for example their financial
performance. All these information will be shared with the top management
in a workshop that will be held later. Although the discussion involved every
department, only two departments were chosen as the pilot area for this study.
The two selected departments were Strategic Development Department (SDD)
and Manufacturing Operations Department.

ISSN: 1985-3157 Vol. 2 No. 2 July-December 2008 7

Journal of Advanced Manufacturing Technology

In the Manufacturing Operations Department, examples of historical

performance measures picked up as an initial base for measuring performance
were percentages of scrap, Non Conformance Reports (NCR), overtime of
workers, attendance of employee , etc. Examples of historical performance
measures picked up as an initial base for measuring performance in SDD
were percentages of level of implementation of lean manufacturing, level
of implementation of 5’S activities, level of implementation Value Stream
Mapping(VSM) activities, overtime of total man/hours of workers, percentage
of zero accident, etc. These historical data were compiled to be used in the
workshop programme to develop the new company KPI framework.

3.2.2 Benchmarking of best practices for oil and gas company

Since there is no benchmarking data available for aerospace component
manufacturing a visit to oil and Gas Company that is successful in KPI
implementation was conducted, though this company is a non-competitor
company. The objectives of the visits were to learn about the company KPIs
development and deployment, understand the KPIs implementation process
flow, problems during project execution and benchmark the KPIs success
story.

Figure 2-0, shows steps that are involved in the process of developing KPIs in
the oil and Gas Company. It suggests that the company employed performance
benchmarking technique to help them create their KPIs.

Current Benchmark Identify

Situation Performance Gaps

Measure &
Set Targets
Communicate Progress
/Vision

Develop
Implement Strategies &
Programs Initiatives

Figure 2-0: Example of Oil and Gas Company framework process flow in developing
their KPIs.

8 ISSN: 1985-3157 Vol. 2 No. 2 July-December 2008

 Manufacturing Process, Technology and Design

3.2.3 Workshop Programme

Based on the outcome of the semi-structured interview and group discussions
with employees, the first and basic task in the workshop was to revise the
company’s business vision and mission. Vision is crucial as it is required
to know what is essential to be while mission is important because it is
required to know why it exists. In achieving this task, consideration on who
is company’s customers, what is the company’s major product or services,
where does the company compete geographically, whether the company is
using current technology, whether the company is committed to growth &
financial soundness, what are the basic beliefs, values, aspirations & ethical
priorities of the company, what is the company’s distinctive competence or
major competitive advantage, whether the company is responsive to social,
community & environmental concerns and lastly whether employees are
viewed as valuable asset of the company. At the end of process, the vision and
mission statement of this aerospace company have been revised.

The next stage of discussion was to set company goal and objectives. The
reason is to know the achievement targets and what to focus on. The goal
was set to 9 % increase in profit margin. On top of that, objectives had been
decided to focus based on four perspectives that are Customer satisfaction,
Financial, Internal Business Process and Capability & Growth (Sustainable
Growth). Customer satisfaction means that if customers are not satisfied, they
will eventually find other suppliers that will meet their needs. It had been
decided to focus on three strategies; Quality, Cost and Delivery.

Focus on financial aspect was also important to determine organisation’s

strengths in the investment, financing and dividend areas. The perspective
was focusing on positive cash flow and good financial health on Profit before
Tax (PBT), Gross Profit, Earning Before Interest, Taxes, Depreciation and
Amortization (EBITDA) and Earning before Interest Tax (EBIT).

Internal Business processes deals with how well their business was running
and whether the products or services conform to customer requirements. The
objectives of this perspective were to self manage suppliers. It will focus on
the QCDAC principles. For quality principles it looked on Manufacturing
Quality (MQ), Control of Poor Quality (COPQ), Customer Quality (CQ) and
Non Conformance Reports (NCR). For delivery, example of strategy was to
achieve 100% delivery target. For Accountability the strategy was to have
90% attendance, Health Safety Environment (HSE) (> 120 days accident free)
and zero major accident. For continuous improvement, cost reduction program
targeted had been implemented.

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Journal of Advanced Manufacturing Technology

Capability & Growth (Sustainable Growth) means continuous learning

and growth which constituted the essential foundation for success of any
knowledge–worker organisations. The objective was for self driven employee.
The strategy focused and had been divided into 3 prospects; organisations,
technology (Development in R&D) and lastly the implementation of lean
culture.

All strategies were based on QCDAC principles (Quality, Cost, Delivery,

Accountability and Continuous Improvement). Refer to Table 1.0. The next
task was to know what initiatives need to be carried out to achieve it. For
example, one of the strategy of SDD department was to achieve level 3 of
Lean Implementation, thus the initiatives or activities that had been planned
to achieve this strategy was to promote Lean radio and Lean bulletin, to have
awareness courses, to have a basic lean training to all employee, etc.

Next was creating and identifying the KPIs to measure the performance of
that activity (initiatives). For example, the achievement of level 3 of Lean
Implementation was measured by using the spider web charts. It will compare
the current and previous status of the implementations. It has been decided
that all results be reviewed regularly, and each of the strategy will have their
own person in charge. Improvement and action will be taken if the objectives
were not achieved. This is to confirm whether the problem comes from the
activities, KPIs or the strategy itself. It will be done via soft analysis that will
be elaborated in more details in the later section. The new KPIs framework
created for the company in the two day workshop is shown in Figure 3.0.

Table 1.0: Determining of QCDAC Principles

10 ISSN: 1985-3157 Vol. 2 No. 2 July-December 2008

 Manufacturing Process, Technology and Design

PROFIT

PERSPECTIVE Profit

CUSTOMER
SATISFACTION • Quality
• Cost
• Delivery

Good Financial Health +VE Cash Flow

FINANCIAL
• PBT
• Gross Profit
• EBITDA
• EBIT

INTERNAL Self Managing Supplier

BUSINESS
PROCESSES

Quality Cost Delivery Accountability Continuous

Improvement
100%

CAPABILITY &
GROWTH Self Driven Employee
(SUSTAINABLE
GROWTH)
Organisation Technology Culture

Training R&D Lean Enterprise

(x hrs/staff/yr)

Figure 3.0: The Outcomes of the workshop: Company KPI’s framework.

3.3 The proposed KPIs suggested for Pilot area of study

Details of these departments in terms of their principles, perspectives,
objective, strategy or plan, ownership, KPIs (measures), target for reduction
or improvement and initiatives are contained in Table 2.0. However some
columns are purposely removed in order to maintain the confidentiality of the
company.

3.4 Outcomes of the KPIs implementation at pilot area of study.

The outcomes of KPIs implementations in the Pilot area study can be seen
in Table 3.0.To know its achievability, Red Amber and Green (RAG) status
measurement had been employed to evaluate the achievement of the outcome

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Journal of Advanced Manufacturing Technology

based on Half Yearly review data. If the strategies by using the selected KPIs
were coloured in Red, it means that the schedule slipped and out of target, if
it was in Amber colour, it means that the task slipped but still met the end of
the deadline and if it was in Green, it meant that the task achieved the target
and schedule.

Table 2.0: Example of the proposed KPIs suggested for pilot area study

3.4.1 Setting standard reporting based on QCDAC and aligning the

current communication gap to all level.
Figure 4.0 presents Standard Operation reporting flow in each level in the
organisations. From the chart it shows that there are 5 levels of standard
operating reports. Each person in each level will review and report their
standard operation to their subordinates regularly based on agreed frequency.
For example, the company KPIs will undergo Quarterly, Half Yearly and
Yearly Review and will be reported to the CEO of the company by the GM.
Department KPIs will be reviewed monthly and will be reported to GM of the
company by HOD. Section KPIs will be reviewed monthly and will be reported
to HOD of the company. SMT KPIs done by Team Leader reviewed daily and
must be reported to HOS/HOU of the company by Team Leader. Personal KPIs
will be done individually and will be reviewed during performance appraisal

12 ISSN: 1985-3157 Vol. 2 No. 2 July-December 2008

 Manufacturing Process, Technology and Design

held quarterly.

To fulfil this course of action, SOFT analysis (Figure 5.0) was chosen to be
the basic of Standard Operation reporting. SOFT analysis was used in the
standard reporting of the company to identify the strengths, opportunities,
failure factors and the treatments (the countermeasure of problem solving) of
identified problem or failure at the production areas and management level. For
example of Standard Reporting Based for HOD/HOS/HOU/AREA LEADER/
TEAM LEADER. The reports are divided into four parts, namely Part A for
the introduction; Part B for the SOFT analysis reports, Part C for the RAG
status reports, Part D for the program and plan status and lastly Part E for the
action plan of continuous improvement.

Table 3.0: Example of the outcomes after KPIs implementations in pilot study
area based on Half Yearly review data. (Plan vs. Actual)

Co.’s KPIs General

(Quarterly, Half Yearly & Manager
Yearly Review)

Dept.’s KPIs
(Monthly Review) HOD

Sect.’s KPIs
(Monthly
Review) HOS/HOU/
Executives/Area Leader  GM : General Manager
 HOD : Head of Department
SMT.’s KPIs
 HOS : Head of Sections
(Daily Review)
 HOU : Head of Unit
 SMT : Self Management Team
Area Leader &  KPIs : Key Performance Indicators
Personal SMT Group
KPIs

Figure 4.0: Company standard reporting flow and the reviewing frequency

ISSN: 1985-3157 Vol. 2 No. 2 July-December 2008 13

Journal of Advanced Manufacturing Technology

Strength Opportunity
To show any To identify any
achievement in opportunity in order
manufacturing to improve
process productivity
Failure factors Treatment
To identify the root To identify the best
cause of failure / solution to tackle
problem occurred any problem
occurred

Figure 5.0 : S.O.F.T Matrix Analysis

Figure 5.0 : S.O.F.T Matrix Analysis

4.0 Overview of the Research findings

Listed below is a summary of the important findings that address the questions
of the study:-
i. The scenarios identified at company gathered from Semi-structure
interview and Focus group discussion (Gap Analysis):-
™™ No common interpretation of vision / mission.
™™ No standardization of reporting.
™™ Misunderstanding of company objective.
™™ Difficulty to measure company and employee performance.
™™ Communication breakdown.
™™ Unclear ownership of responsibility.
™™ Failure to identify the gaps.

ii. The outcomes from internal benchmarking activities:-

™™ Each department shows their current measurement in their own
department in each activities or process that they had done in the
past.
™™ All these historical data were compiled and used in the discussion in
workshop programme to develop the new KPIs.

iii. The outcomes from Best Practices benchmarks activities (Visit to oil and
gas company):-
™™ The objectives of the visits are to learn about the company KPIs
development and deployment, understand the KPIs implementation
process flow, problems during project execution and benchmark the

14 ISSN: 1985-3157 Vol. 2 No. 2 July-December 2008

 Manufacturing Process, Technology and Design

KPIs success story.

™™ In summary, it shows that the company used performance benchmarking
technique to help them create their KPIs.

iv. The literature review outcomes:-

™™ It focuses in three main areas of this studies that are Lean Manufacturing
implementation, performance measurement and KPIs.
™™ The literature also includes three added case studies related to the
development of KPIs. The information from these case studies will
support the information acquired from the benchmarks best practices
activities.
™™ The outcomes and understanding obtained from the literature review
will be fed into the next steps of the studies.

v. The outcomes from Workshop programme:-

™™ From the workshop programme the goal, objectives, mission and
vision of the company had been stated.
™™ The vision of the company is to become a world preferred supplier for
advanced composites products and services. The mission statement
of the company is to develop the company to become a world class
composites manufacturing company.
™™ The main goal of the company is Profit. Objectives the company had
been decided to focus based on four perspectives that are Customer
satisfaction, Financial, Internal Business Process and Capability &
Growth (Sustainable Growth).
™™ All strategies will be based on QCDAC principles.
™™ To achieve the KPIs target, a lot of initiatives and activities had been
carried out.
™™ All results will be reviewed regularly, (Monthly, quarterly, half yearly
and yearly) and each of the strategy will have their own person in
charge. Improvement and action will be taken if the objectives are not
achieved.

vi. The outcomes after KPIs implementations:-

™™ As a summary, majority of the strategies are succeeding with the new
KPIs that had been created.

vii. Standard Operation Reporting:-

™™ Standard Operation reporting flow have been created in each level in
the organisations. Each person in each level will review and reports

ISSN: 1985-3157 Vol. 2 No. 2 July-December 2008 15

Journal of Advanced Manufacturing Technology

their standard operation to their subordinates regularly based on the

frequency that had been decided.
™™ To fulfil this course of action, SOFT analysis was chosen to be the basic
of Standard Operation reporting to their subordinates. The reports are
divided into four parts, namely Part A for the introduction; Part B for
the SOFT analysis reports, Part C for the RAG status reports, Part D
for the program and plan status and lastly Part E for the action plan of
continuous improvement.

5.0 Conclusion
From this study, new KPIs framework had been developed for the under study
aerospace manufacturing company. Majority of the strategies are succeeding
with the new KPIs that had been created by referring to the pilot area study.
Communications breakdown had been solved by the introduction of Standard
Operation Report.

6.0 Acknowledgment
The researchers would like acknowledge the Faculty of Manufacturing
Engineering (FKP) of Unversiti Teknikal Malaysia Melaka (UTeM) for
providing the facilities in carrying out this study. The researchers also wish
to thank the people who given their support and help in finishing this study,
without their help, this paper will never be written.

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 Manufacturing Process, Technology and Design

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ISSN: 1985-3157 Vol. 2 No. 2 July-December 2008 17

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