KPI (Key performance indicators), How effective are KPI:s as performance management within the production industry?

The purpose of this thesis is to examine how key performance indicators are being used as performance management tools within the production industry. Specifically the purpose is to investigate how the KPI:s within the telecommunications industry drives reusability regarding production test systems. This thesis will also highlight today’s cost models and suggest improvements of the KPI and what new ones could be introduced. A case study at Ericsson AB has been performed. The study has an abductive approach because the study is both based on current theories and hypotheses but also from empirical data. Personal interviews were also conducted at HWDSS, Ericsson AB. The conclusion of this case study is that the management control measurements used today, to some extent creates incentives for modular design with high reusability. However, there is room for improvements, both in order to more clearly show the positive effects with high reusability and to more directly control the activity toward this goal. It’s our belief that better monitoring of the proportion of previous modules/components being used in new designs and to have a target value for this part clearly would promote modular design with high reusability. It’s also important to continuously measure the enablers for the goal and not just follow the implementation of identified key activities. KPI, PI and cost models of the business must always be up to date and pointing in the direction of the business laid strategy