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This paper aims to define key performance indicators (KPIs) for measuring performance of production systems for residential building from a production strategy perspective.

A literature review is done to identify suitable competitive priorities and to provide grounds for developing KPIs to measure them. The KPIs are evaluated and validated through interviews with industry experts from five case companies producing multifamily residences. Furthermore, two of the case companies are used to illustrate how the KPIs can be employed for analysing different production systems from a manufacturing strategy perspective.

Defined, and empirically validated, KPIs for measuring the competitive priorities quality, cost (level and dependability), delivery (speed and dependability) and flexibility (volume and mix) of different production systems.

To further validate the KPIs, more empirical tests need to be done and further research also needs to address mix flexibility, which better needs to account for product range to provide a trustworthy KPI.

The defined KPIs can be used to evaluate and monitor the performance of different production systems’ ability to meet market demands, hence focusing on the link between the market and the firm’s production function. The KPIs can also be used to track a production systems’ ability to perform over time.

Most research that evaluate and compare production systems for residential building is based on qualitative estimations of manufacturing outputs. There is a lack of quantitative KPIs to measure performance at a strategic level. This research does this, identifying what to measure, but also how to measure four competitive priorities through 14 defined KPIs.