Performance Measures for Freight Transportation (2011) / Chapter Skim
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Pages 27-31
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From page 27... ...
However, the process by which private-sector decision makers identify, collect, and assess measures holds significant relevance for the public-sector decision makers who want to create a set of national freight performance measures. From Lagging to Leading Indicators Peter Drucker1 wrote that 70 years ago General Motors pioneered modern cost accounting systems and used its performance output for important resource-allocation and decision-support performance measures.
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From page 28... ...
All three noted that organizations have developed performance measures only to be frustrated that they did not provide true insight, they created unintended disincentives, or they failed to measure customer satisfaction. Drucker's findings that executives quickly grow dissatisfied with backward-looking, or lagging, indicators influenced the development of the Freight System Report Card.
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From page 29... ...
Competency or benchmarking measures are used in the "Innovating and Learning Perspective." Finally, the Resource Allocation measures still are inherent within all four sectors as measures to help make intelligent investment decisions. What the Balance Scorecard evolution has done is to: • Sharpen measures into a "critical few" ; Financial Perspective Goals Measures Innovation and Learning Goals Measures Business Operations Goals Measures Customer Perspective Goals Measures Figure 2.1.
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From page 30... ...
In the private sector, consequences can be in the form of profit, loss, or market share. In the public sector, the consequences can come in the form of executives initiating improvement efforts if the measures indicate that performance targets have not been reached.
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From page 31... ...
Such measures may be all organizations initially have, but they quickly prove inadequate to provide insight into future performance; • Current performance measurement is heavily invested in measuring customer satisfaction and system performance from the customer perspective; • Leading indicators that provide insight into likely future performance are strongly desired; • Performance measures must be part of an ongoing system that has its own architecture, data system rules, and grammar and a control process that keeps it accurate, current, and relevant; • Successful measurement systems overcome a contradiction. They must be high-level and simple while allowing granularity to drill down into processes if the high-level measures indicate a breakdown in performance; • Private companies struggle to get good performance data from within their own organizations, which only further highlights the challenge of getting consistent data from public and private sources for a set of national freight performance measures; • Modern private-sector performance measures are used to drive organizational strategy; • Performance measurement systems that become integral to an organization tend to drive "continuous improvement" efforts, while systems that are not integral tend to atrophy.
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