Study on Appropriate Key Performance Indicators for Traditional Medicine and Herbal Industry

Abstract

Objective: To identify appropriate key performance indicators for traditional medicine and herbal industry (the industry) using framework of key performance indicators according to the principle of Balanced Scorecard (BSC). Methods: This study was descriptive research. The participants of this research were experts employed in companies manufacturing traditional medicines and herbs in Thailand. These companies were certified by the Food and Drug Administration for their manufacturing standard. The participants were selected through a purposive sampling method according to the established criteria. Data collection was conducted through a questionnaire on indicators relevant to the industry from multiple perspectives based on the principles of the BSC with an additional perspective on the quality of medicines. Results: Sixteen experts responded to the questionnaire, with 14 of them having bachelor's degrees, 5 holding managerial positions, 7 with 9-10 years of work experience, and 15 working in private sector. The experts identified 25 out of 41 indicators based on a five-perspective key performance indicator framework highly recommended to apply for evaluating the industry. All proposed indicators on customer perspective and drug quality should be adopted. The indicators with the highest average scores in each perspective were as follows: the financial perspective (the total supply chain management costs and the total cost per unit of good), the customer perspective (customer satisfaction on product quality), the internal process perspective (production efficiency),  the learning and growth perspective with three indicators (1. the presence of policies supporting innovation or collaboration between factories and other departments, 2. technology and infrastructure, and 3. the development of up-to-date packaging or product modifications to ensure appropriateness and the quality perspective (drug safety). Conclusion: The experts agree that all proposed indicators in the customer perspective and the quality of medicine perspective should be taken as indicators for the industry. The development of a key performance indicator framework based on the Balanced Scorecard principle should add quality perspectives to ensure effective production of traditional medicines and herbs and gaining acceptance from consumers and prescribers.