Short answer

Establish and consistently apply a weighted KPI system to objectively measure and manage subcontractor performance, ensuring alignment with production goals and long-term business viability.

Field
Innovation & Markets
Source
Journal of Engineering Technology and Applied Physics (2023)
Method
Multi-criteria decision-making (MCDM) using the Weighted Sum Model (WSM).
Sample
6 subcontractors, 5 employees for weighting
Evidence
Strong effect

Implementing a weighted Key Performance Indicator (KPI) system allows for objective evaluation and selection of subcontractors, directly impacting production efficiency and long-term business sustainability. This innovation & markets research insight is drawn from a 2023 study published in Journal of Engineering Technology and Applied Physics. Using Multi-criteria decision-making (mcdm) using the weighted sum model (wsm). with 6 subcontractors, 5 employees for weighting, researchers explored how this design variable affects real-world outcomes. The key design takeaway: Establish and consistently apply a weighted KPI system to objectively measure and manage subcontractor performance, ensuring alignment with production goals and long-term business viability.

Study
Innovation & MarketsRecentStrong effect

Weighted KPIs Drive Supplier Selection and Enhance Production Sustainability

Implementing a weighted Key Performance Indicator (KPI) system allows for objective evaluation and selection of subcontractors, directly impacting production efficiency and long-term business sustainability.

Journal of Engineering Technology and Applied Physics · 2023

01

Key Findings

  • 01A weighted KPI system can be effectively developed and implemented for subcontractor performance evaluation.
  • 02Subcontractor performance varied significantly, with scores ranging from 69.42 to 78.42.
  • 03The developed KPI and evaluation procedure provided a structured method for selecting the best-performing supplier.
02

Application

Design takeaway

Establish and consistently apply a weighted KPI system to objectively measure and manage subcontractor performance, ensuring alignment with production goals and long-term business viability.

How to apply

Identify critical performance aspects for your key suppliers, assign weights based on business priorities, and regularly score suppliers using a defined methodology.

Project actions

  • 01Clearly define what 'good performance' means for each supplier aspect.
  • 02Involve relevant stakeholders in assigning weights to ensure buy-in and accuracy.
03

Method & Evidence

AimHow can a weighted Key Performance Indicator (KPI) system be developed and applied to objectively evaluate and select subcontractors in an injection moulding department to improve production performance and ensure business sustainability?
MethodMulti-criteria decision-making (MCDM) using the Weighted Sum Model (WSM).
ProcedureKey Performance Indicators (KPIs) relevant to subcontractor performance in injection moulding were identified. Weights were assigned to these KPIs by a panel of employees. A Weighted Sum Model was then used to score and rank six subcontractors based on their performance against these weighted KPIs. A formal KPI and evaluation procedure were developed.
Sample6 subcontractors, 5 employees for weighting
ContextToy factory's injection moulding department.

Variables

IVSubcontractor performance metrics (e.g., delivery consistency, reject rate, inventory accuracy, material efficiency).
DVOverall weighted KPI score for each subcontractor.
CVNumber of subcontractors evaluated, specific industry (injection moulding), employee group involved in weighting.
04

Strengths & Limitations

Strengths

  • +Provides a practical, data-driven approach to supplier evaluation.
  • +Addresses a common operational challenge in manufacturing.

Limitations

The chosen KPIs might not capture all nuances of supplier performance. Employee bias in weighting can affect the results.

Reliability & validity

The reliability of the WSM depends on the consistency of the chosen KPIs and the stability of the assigned weights. Validity is enhanced by involving multiple employees in the weighting process and ensuring KPIs are truly representative of desired performance.

Think critically

How might the subjectivity of employee-assigned weights influence the fairness and effectiveness of the subcontractor evaluation system?

05

Design Principles

"Objective performance measurement through weighted criteria is essential for strategic supplier selection and operational efficiency."

In competitive manufacturing environments, the performance of external partners is as crucial as internal operations. A structured KPI framework provides a clear, data-driven method to identify and foster relationships with high-performing suppliers, mitigating risks associated with poor quality or delivery, and ultimately strengthening the overall business model.

06

What This Means for Your Design

Using a scoring system with different importance levels (weights) for supplier performance helps choose the best partners for your production, making your business more stable.

How to use in your project

  • 1.Use this research to justify the development of a KPI system for evaluating design prototypes or manufacturing partners in your design project.
07

Add to My Project

08

Quick Cite

Paragraph starter

This research demonstrates the value of a weighted Key Performance Indicator (KPI) system for objectively evaluating subcontractor performance, a methodology directly applicable to managing external manufacturing partners or suppliers within a design project to ensure quality and efficiency.

09

Source

Journal of Engineering Technology and Applied Physics

Performance Evaluation of Subcontractors Using Weighted Sum Method through KPI Measurement

journal · 2023

View source

Questions About This Research

What does the research say about weighted kpis drive supplier selection and enhance production sustainability?
Establish and consistently apply a weighted KPI system to objectively measure and manage subcontractor performance, ensuring alignment with production goals and long-term business viability. Evidence: Journal of Engineering Technology and Applied Physics (2023).
Why does "Weighted KPIs Drive Supplier Selection and Enhance Production Sustainability" matter for design?
In competitive manufacturing environments, the performance of external partners is as crucial as internal operations. A structured KPI framework provides a clear, data-driven method to identify and foster relationships with high-performing suppliers, mitigating risks associated with poor quality or delivery, and ultimately strengthening the overall business model.
How can designers apply this research?
Establish and consistently apply a weighted KPI system to objectively measure and manage subcontractor performance, ensuring alignment with production goals and long-term business viability.
What were the main findings?
A weighted KPI system can be effectively developed and implemented for subcontractor performance evaluation.. Subcontractor performance varied significantly, with scores ranging from 69.42 to 78.42.. The developed KPI and evaluation procedure provided a structured method for selecting the best-performing supplier.
What research method was used?
Multi-criteria decision-making (MCDM) using the Weighted Sum Model (WSM). with 6 subcontractors, 5 employees for weighting.
How strong is the evidence?
Evidence strength is rated Strong effect, based on a 2023 journal from Journal of Engineering Technology and Applied Physics.
What should I do differently in my next project?
Identify critical performance aspects for your key suppliers, assign weights based on business priorities, and regularly score suppliers using a defined methodology.
What are the limitations?
The study focused on a specific department within a toy factory, and the weights assigned by employees may be subjective. The long-term impact of the evaluation on subcontractor improvement was not assessed.