Balanced Scorecard

advertisement
Balanced Scorecard
Kaplan & Norton: HBR
July-August 2005: repeat of 1992 seminal article
Feb 2004: Strategy Map
Oct 2005: Examples
March 2006: Implementation examples
Finland 2010
Perspectives
• GOALS & PERFORMANCE MEASURES
– Financial perspective
• How do we look to shareholders?
– Customer perspective
• How do customers see us?
– Internal Business perspective (BPR)
• What must we excel at?
– Innovation & Learning perspective
• Can we continue to improve & create value?
Finland 2010
Example:
anonymous semiconductor company
• FINANCIAL perspective
GOALS
Survive
MEASURES
Cash flow
Succeed
Quarterly sales
Growth
Operating income by division
Increase in market share
Increase in Return on Equity
Prosper
Finland 2010
CUSTOMER perspective
GOALS
MEASURES
New products
% sales from new products
% sales from proprietary products
On-time delivery
(customer definition)
Share of key accounts’ purchases
Ranking by key accounts
# of cooperative engineering
efforts
Responsive
supply
Preferred
suppliers
Customer
partnerships
Finland 2010
INTERNAL BUSINESS perspective
GOALS
MEASURES
Technology
capability
Manufacturing
excellence
Benchmark vs. competition
Design
productivity
New product
innovation
Cycle time
Unit cost
Yield
Silicon efficiency
Engineering efficiency
Schedule: Actual vs. Planned
Finland 2010
INNOVATION & LEARNING
perspective
GOALS
MEASURES
Technology
leadership
Manufacturing
learning
Product focus
Time to develop next generation
Process time to maturity
% products equalling 80% of
sales
Time to market New product introduction vs.
competition
Finland 2010
2004 article: Strategic Readiness
• Strategy map: framework to link intangible
assets to shareholder value creation
– Through the 4 perspectives
• 3 Intangible Asset categories essential to
implement strategy (Learning & Growth)
– Human Capital
• Skills, training, knowledge
– Information Capital
• Databases, information systems, networks, infrastructure
– Organizational Capital
• Culture, leadership, alignment with goals, knowledge sharing
Finland 2010
Strategy Map: Intangible assets link
to Internal Process
•
•
Intangible assets make up Learning & Growth perspective
Map to Internal Process perspective
–
Operations Management
•
–
Customer Management
•
–
Improve communities & the environment
Customer perspective
–
•
Create new products & services
Regulatory & Social
•
•
Enhance customer value
Innovation
•
–
Produce & deliver products & services
Price, quality, availability, selection, functionality, service, partnership, brand
Financial perspective
–
Productivity strategy
•
•
–
Improve cost structure
Increase asset utilization
Revenue growth strategy
•
•
Enhance customer value
Expand revenue opportunities
Finland 2010
Consumer Bank (anonymous)
example: Human Capital
Finland 2010
Information Capital Readiness
Finland 2010
Organization Capital Readiness
Finland 2010
SCM & BSC
Beasley, Chen, Nunez & Wright, Strategic Finance 87:9 [2006]
CATEGORY
Purpose
Aim
Learning & Growth for
Employees
To achieve our vision
How will we sustain our
ability to change &
improve?
Internal Business
Processes
To satisfy our
stakeholders &
customers
Where must we excel in
our business processes?
Customer Satisfaction
To achieve our vision
How should we appear
to our customers?
Financial Performance
To succeed financially
How should we appear
to our stakeholders?
Finland 2010
Learning & Growth for
Employees
GOALS
MEASURES
Increase employee process ownership Employee survey scores
Improve information flows
Changes in information reports
Frequencies across supply chain
partners
Increase employee identification of
potential supply chain disruptions
Compare actual disruptions with
reports of potential disruption drivers
RISK-RELATED GOALS
Increase employee awareness
Number of employees attending risk
management training
Increase supplier accountability
Supplier contract provisions on risk
Increase employee awareness of
supply chain risks & other enterprise
risks
Number of departments participating
in supply chain risk identification &
assessment workshops
Finland 2010
Internal Business Processes
GOALS
MEASURES
Reduce waste across supply chain
Pounds of scrap
Shorten time from start to finish
Time from raw material purchase to
product/service delivery to customer
Achieve unit cost reductions
Unit costs per product/service
delivered
% of target costs achieved
RISK-RELATED GOALS
Reduce probability & impact of threats
Number of employees attending risk
management training
Identify specific tolerances for key
processes
Number of process variances
exceeding specified acceptable risk
tolerances
Reduce number of exchanges of
supply chain risks to other enterprise
processes
Extent of risks realized in other
functions from supply chain process
risk drivers
Finland 2010
Customer Satisfaction
GOALS
MEASURES
Improve product/service quality
Number of customer contact points
Improve timeliness of product/service
delivery
Time from customer order to delivery
Improve customer perception of value
Customer scores of value
RISK-RELATED GOALS
Reduce customer defections
Number of customers retained
Monitor threats to product/service
reputation
Extent of negative coverage of quality
in press
Increase customer feedback
Number of completed customer
surveys about delivery comparisons to
other providers
Finland 2010
Financial Performance
GOALS
MEASURES
Higher profit margins
Profit margin by supply chain partner
Improved cash flows
Net cash generated over supply chain
Revenue growth
Increase in customers & sales per
customer
% annual return on supply chain
assets
RISK-RELATED GOALS
Reduce threats from price competition
Number of customer defections due to
price
Reduce cost overruns
Surcharges paid
Holding costs incurred
Overtime charges applied
Reduce costs outside the supply chain Warranty claims incurred
from supply chain processes
Legal costs paid
Sales returns processed
Finland 2010
Gaudenzi & Borghesi
The International Journal of Logistics Management 17:1 [2006]
• AHP in balanced scorecard style
– Develop formula to evaluate risk within
departments
• Focus on top level criteria
– On-time delivery
– Completeness
– Correctness
– Damage/defect free products
Finland 2010
Gaudenzi & Borghesi Weights
Criteria
On-time
delivery
Completeness
Correctness
Damage-defect
free
Mean
100
90
75
50
315
weights Extreme1 weights Extreme2 Weights
0.317
100
0.402
50
0.215
0.286
0.238
0.159
66
50
33
249
Finland 2010
0.265
0.201
0.133
100
50
33
233
0.429
0.215
0.142
Weights: Contingent upon
On-time first vs. Completeness
first
Criteria
On-time first
Completeness first
On-time delivery
Completeness
Correctness
Damage-defect free
0.36
0.29
0.21
0.14
Finland 2010
0.22
0.43
0.21
0.14
On-time delivery evaluation –
Manager subjective scores
On-time
delivery
Completeness
Correctness
Defect free
Value scores
Procurement
Warehouse
Mfg
Trans.
0.5
Order
Cycle
1
0.36
0
0.5
0
0.29
0.21
0.14
0
1
0.5
0.28
0.5
1
1
0.675
1
1
1
1
1
1
1
0.82
1
0.5
0
0.395
Finland 2010
Completeness evaluation –
Managerial subjective scores
On-time
delivery
Completeness
Correctness
Defect free
Value scores
Procurement
Warehouse
0.22
0
0.5
0.43
0.21
0.14
0
1
0.5
0.28
0.5
1
1
0.675
Finland 2010
Order Mfg Trans
Cycle
1
0.5
0
1
1
1
1
1
1
1
0.5
1
0
0.89 0.535
Other Business Scorecards in
Broader Perspectives
• Internal auditing in accounting
– Campbell, Adams, Campbell & Rose
• Financial Executive 22:1 [2006]
• Mental health governance
– Sugarman & Kakabadse
• The International Journal of Clinical Leadership 16
[2008]
Finland 2010
Marketing natural gas vehicles
Janssen, Lienin, Gassmann & Wokaun, Transportation Research Part
A 40 [2006]
INDICATORS
1. Ratio of natural gas vehicles per
compress natural gas fueling stations
2. Type coverages (how many different
natural gas vehicle types were available)
3. Natural gas vehicle investment pay-back
time
4. Sales per type
5. Subsidies par automobile
Finland 2010
Download