Performance Measurement Analysis of XYZ Company Based on Risk with AHP and OMAX Concept Approach

Authors : Hasidah Rahmiwijayanti , Putu Dana Karningsih

Volume/Issue : Volume 3 - 2018, Issue 1 - January

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The growth of construction business is quite rapid due to stimulation by the government. The growth was supported by public and private sector investment in infrastructure and residential construction projects, leading to an increase in demand for the construction industry. It causing competition in the construction market is getting tighter as more and more new competitors enter. This forces every construction company to improve its performance through cost efficiency and improve internal business process control to provide excellent product and excellent service to win business competition. XYZ company as one of concrete product producers has been striving to always improve company performance. Its performance measurements are adopted on the balance scorecard system. However, due to limited resources, not all KPIs can be followed up for performance improvement. In the evaluation of current performance measurement, KPI selection priorities that need to be improved are still based on management intuition. This study aims to examine the combination of existing performance measurement methods with AHP and OMAX methods for the efficiency and effectiveness of enterprise performance measurement system. By identifying the risks associated with the established KPIs using ISO 9001: 2015 as guidelines, management can determine the risk priorities based on their impact on the achievement of corporate objectives by weighting based on the Analytical Hierarchy Process (AHP) method. KPI is then compiled using OMAX method according to its priority and measured company achievement score against each KPI. The results of the analysis show that the overall performance of the company reaches 70% of the target set. There are 2 main KPIs that need to be improved its performance because they are still below the standard, they are KPI meet the needs of raw materials, parts and supporting materials with a score of 3 and receivable turnover with a score of 3. Performance increase for both KPI will affect to improve performance for another KPI which also has a score of 3, namely account debt turnover.

Keywords : Risk Management; Performance Measurement; AHP; OMAX; Traffic Light System.


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