A PROPOSED DESIGN OF INTEGRATED PERFORMANCE MANAGEMENT SYSTEMS FOR MANAGING CONFLICTING OBJECTIVES AND ALIGNING PERFORMANCE OF TRANSPORT LOGISTICS

• Main Author: Prama Irfani, Dian
• Format: Dissertations
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/37964
• Institution: Institut Teknologi Bandung

Companies with multiple roles, as a profit generator and public service provider, have specific characteristics that are different from single-role companies. However, literature suggests that no Performance Management System (PMS) framework exists to fully suit the characteristics of such companies. This study aims to develop a novel PMS framework to manage transport logistics performance in multiple-role companies. The framework is developed by combining a literature review and a case study approach as applied to a company with multiple roles. The literature review identifies the concepts, performance attributes, and indicators from existing frameworks with the potential for incorporation and synthesis in the new framework. The case study is conducted to identify the characteristics of multiple-role companies, the factors that potentially affect such companies’ transport logistics performance, and criteria for a new framework. The proposed framework uses the combinations between statistical, Multi Criteria Decision Making, and System Dynamics methods. Statistical methods like mean, covariance, and Cronbach’s Alpha analyses were used to assess the suitability of the existing PMS with organization’s strategy and to select the appropriate performance indicators. Meanwhile, MCDM methods like Decision Making Trial and Evaluation Laboratory (DEMATEL), Analytical Network Process (ANP), and Analytical Hierarchy Process (AHP), and system dynamics models were utilized to manage performance conflicts. To validate the developed framework, the proposed framework then is applied to a transport logistics system in a multiple-role company namely Company A. The data were collected by distributing questionnaires and conducting interviews with key decision makers related to the transport logistics system. This research successfully fills theoretical gaps in the field of performance management systems. First, this study successfully explained the unique characteristics of companies with multiple roles. Such companies are confronted with conflicting goals to achieve both commercial and social profitability, confronted with constantly changing regulations, face difficulty in translating the vague, complex goals into an all-encompassing measures of performance, and have different evaluation models used by the external controller that leads to the potential of creating double standards and inconsistencies in the performance evaluation. Secondly, this successfully proposed several potential key indicators for managing the performance of logistics systems in multiple-role companies, namely financial performance, social performance, business partner performance, reliability, responsiveness, flexibility, cost efficiency, and asset management efficiency. Thirdly, this study successfully identified factors that may affect the performance of the logistics system in multiple-role companies, namely information sharing, collaboration, management support, infrastructure support, and capability. Fourth, this research succeeded in formulating criteria of PMS for multiple-role companies, namely the provision of functionalities to align strategy, to select balanced performance indicators, to set performance targets, to manage causal relationships between indicators, to manage performance conflicts, to manage dynamism issues, and to manage performance improvement. Fifth, this study successfully developed a new logistics PMS framework that consists of nine performance management stages, including: environment analysis, system analysis, analysis of existing PMS, performance indicator and target managements, short and medium term conflict management, long term conflict management, performance evaluation implementation, and performance improvement. The implementation of the proposed framework showed that the framework can be used to assess the suitability of the existing PMS, select balanced performance measures, set contextual performance target, examine the causal relationships between variables in the logistics system, build an overall transport logistics performance index to manage shortterm performance conflicts, build system dynamics model to illuminate the trade-off between conflicting performance indicators as well as the interactions between strategic resources, performance drivers, and performance output. This research contributes to academia and practitioners by proposing a novel PMS framework that is different from the existing PMS frameworks. First, the proposed framework integrates performance measure design, system modelling, and the problemsolving principle into a comprehensive PMS model. Whereas previous studies tended to focus on only one of these three methods, this study integrated them all into a new holistic performance management framework, thereby making a significant contribution to the existing body of research. Secondly, the proposed framework provides functionalities to manage performance conflicts through the provision of overall performance index and system dynamics models. Some popular frameworks such as the BSC, the Performance Prism, KB-PMS, and SCOR do not provide these functionalities. Thirdly, the proposed framework can be used by decision makers in multiple-role companies to plan, organize, implement, and evaluate the performance of the logistics system, which in turn can help avoid silo thinking, misaligned performance objectives, local optima, and short-term solutions. Since this research only uses a single case study, future research is needed to assess the generalizability of the developed framework. In addition, this study can be furthered by empirically determining how employing the framework proposed in this work can help discourage sectoral views while fostering collaboration among parties involved in the logistics systems of companies that perform multiple roles.