A Performance Metric and Goal-Setting Procedure for Deadline-Oriented Processes

Abstract

A performance metric and goal-setting procedure is defined for an order fulfillment operation. In this operation, order requests arrive continuously, and filled orders are shipped at a specific time each day. The metric links the continuous operation of order fulfillment to the scheduled shipment times. To prescribe goals against the metric, a performance model is developed that incorporates the motivational effect of a goal. Goal-setting Theory is used to establish the performance goal and to show how to match arriving orders to deadlines based on their arrival times and expected processing times. Monte Carlo simulation on data from a large distribution center is used to demonstrate that setting these two parameters in the light of motivational research yields quite different results than doing so with an intuitive method. Moreover, a motivational goal leads to better operational performance; that is, correctly setting up the metric causes more customers to receive their orders sooner.