Navigating Performance Measurement Challenges in Component-Level Development From product-level to component-level at IKEA Components AB

Abstract

This thesis explores the challenges of performance measurement in component-level product development, a domain that plays a vital role in multi-level development environments yet re-mains underrepresented in current research. Through a qualitative case study in a global manufacturing context, the study examines how component-level development differs from product-level processes, identifies performance measurement challenges specific to the component-level, and proposes practical improvements. The findings highlight that component-level development is typically reactive, triggered by product-level needs, and constrained by narrower scopes and reduced autonomy. While it shares structural features with product-level development, its integration-dependent value and indirect contribution to end-customer outcomes present unique measurement challenges. Six key challenges are identified across three categories: process-related challenges (e.g., isolated evaluations, ambiguous requirements and late involvement), measurement system design challenges (e.g., subjectivity, limitations with scoring system), and interpretation and strategic use challenges (e.g., symbolic use of metrics, misleading measurements). Based on these challenges, the study proposes five targeted improvements, categorized into two groups. The first group targets organizational and contextual enablers: involving component teams earlier in the process, introducing an independent evaluation group, and enabling collective evaluations. These improvements aim to create the necessary conditions for performance measurement to function effectively. The second group focuses on improving the measurement system itself: incorporating project-specific requirements into evaluations and redefining success to include both implementation and reuse. Together, these measures aim to make performance measurement more relevant, practical, and aligned with component-level realities. By identifying structural differences, examining context-specific challenges, and offering targeted solutions, this study contributes to a more nuanced understanding of how performance measurement systems can be adapted to support innovation, alignment, and strategic decision-making at the component-level.