Performance Measurement System Development

Using SCOR-Balanced Scorecard Integrated Model

for SME in Indonesia : A Case Study for MTO
Products in Textile Industry
1Huria Nusantara 2Ari Yanuar Ridwan 3Widia Juliani

School of Industrial and System School of Industrial and System School of Industrial and System
Engineering Engineering Engineering
Telkom University Telkom University Telkom University
Bandung, Indonesia Bandung, Indonesia Bandung, Indonesia
hurianusantara071@gmail.com ariyanuar@telkomuniversity.ac.id widiajuliani@telkomuniversity.ac.id

Abstract— The presented work has been focused on the
small business enterprise of the textile industry in Indonesia.
Data from Ministry of Cooperatives and SMEs of Republic
Indonesia noted that the average growth of businessmen in
Indonesia, especially SMEs, is 7,716,680 SME units in
Indonesia year 2012-2017. Based on these conditions, among of
businessmen required to be able to renew their strategies
continuously by adjusting with conditions of the turbulent
business environment in order to survive towards business
competition then resulted on achieving company's goals.
Therefore, this study presents the application of integration of
the two strategic models, the SCOR-Balanced Scorecard
Integrated Model. The SCOR model is a model reference
providing a measures which can capture the performance of
many activities of the various entity in supply chain in at the
operational level of the company while the Balance Scorecard
in its application is at the strategic level of the corporate
corporation, the two models provide results in the form of
performance metrics that are used as a measure to evaluate
and assess the performance of the company.
Keywords— Performance Measurement, SMEs, SCOR-BSC
Integrated Model, Performance Metrics
I. INTRODUCTION
The number of businessmen in Indonesia is always
increasing every year, noted by the Ministry of Cooperatives
and SMEs of the Republic of Indonesia that growth of
SMEs in Indonesia in the amount of 13.98% or as many as
7,716,680 SME units in Indonesia year 2012-2017. Beside
of the increasing number of businessmen, a turbulent
business environment has resulted in planning only
formulated based on an ad hoc basis will not be able to
respond quickly and effectively towards the changing trends
[1]. Therefore, every company is forced to renew their
strategies continuously in order to survive towards the
business competition environment then resulted on
achieving company’s goals.
Based on these conditions, it is necessary to standardize
business processes related to the supply chain activity then
align all process to the company's goal [6] to face a
turbulent business environment, and provide measurable
KPI (Key Performance Indicator) or performance metrics,
so that companies can evaluate and assess the overall
performance of company activities with the aim of being
more competitive, agile, reliability and able to increase the
profit margin [3] in every year. In this research, author
proposed a model approach by integrating the SCOR model
(Supply Chain Operation Reference) from APICS version
12.0 with the BSC (Balanced Scorecard), within the scope
of the discussion is production process.
SCOR is a reference model developed to describe
business activities interconnected on each phase, with the
aim of satisfying consumer demand. The model contains of
six primary management processes of Plan, Source, Make,
Deliver, Return, and Enable [2]. The SCOR model also
presents KPIs requires to assess Supply Chain performance.
While the use of the BSC (Balanced Scorecard) is to
develop a strategic map of the overall activities of the
company so that it is aligned with the company's goals [12].
II. METHODOLOGY
A. Data Collection
In this step of research, the required data were collected.
Interview and discussion were used to gain the data. The
respondents are the owner and head of production division.
The data required are:
 Actual business process of production
 Stakeholder/ Role Player of the company
 Supply chain objective
 Company’s objective
 And the factor required in the weighting process
All the data above are used as an input, where the input will
be processed based the systematics have been studied.
B. Framework for Performing Measurement Using SCOR-
Balanced Scorecard Integrated Model
The figure below is the framework of this research. This
framework explains the integration of the two models
namely the SCOR-Balanced Scorecard to get the metrics
needed in performance measurement. SCOR is a process
model reference for supply chain operation The purpose is
to define the process architecture in a way that aligns with
goals or key business success factor [2]. The SCOR’s scope
are divided into six processes, some of them are [2]:
 Plan (Planning and management in the process of
sourcing, making, delivering and returning process)
 Source (Process of procuring all aspect of company’s
needs
 Make (Process of transforming raw material into
goods that have a value added)
  Deliver (Process that related to goods transferring to
the customer, the process is managing the
transportation, distribution strategy, doing an export
and import)
 Return (Process of returning the defective product
from customer and defective raw material to
supplier)
 Enable (Processes of establishing, maintaining the
information network associated of planning and
execution)
Meanwhile, to measure the performance of the supply chain
there are five categories, reliability, responsiveness, agility,
cost and asset management.
The SCOR area begins with mapping the business actual
process, identify the objective of supply chain and identify
stakeholders that related in the company's activities. Next,
analyse and mapping the actual business process into the
SCOR model which is divided into several levels. The three
levels of the SCOR model are [5]:
 Level 1: Define scope and content of supply chain
strategy, at level 1 the basis of competition
performance targets of supply chain is set.
 Level 2: Define and implement the operation strategy
of the supply chain, at level 2 company classify their
process categories in the supply chain.
 Level 3: Defines an ability to compete successfully,
level 3 focused on the right processes, input and
output, metric performance, best practice, capabilities
required to support best practice and system used.
Balanced Scorecard Area
Relate Metrics to BSC
Program
Decompose Strategic
Objective into Program
Finance Customer Service Innovation and Learning
Relate to BSC Category
SCOR Area Level 3
Level 2
Level 1
Decompose Processes at
Element Level
Planning Execution Enabling
Identifying Process Type
Plan Make
SCOR Decision Area
Actual Business Process Role Player
Fig. 1. Framework of SCOR-Balanced Scorecard Integrated Model (The
framework was adopted from [5])
Balanced Scorecard is a strategic planning model
developed by Kaplan & Norton. This model is used as an
effective tool for strategic planning, which is a tool for
translating the mission, vision, objectives, basic beliefs,
basic values, and corporate strategy into an action plan that
is comprehensive, coherent, measurable and balanced [1].
In the Balanced Scorecard area, the input needed is
company’s objective. The company's objective is used as a
reference in cascading into four perspectives of the
Balanced Scorecard. The four are financial perspective,
customer perspective, internal business process perspective
and learning and growth perspective [1], and further the
performance measures are related to various categories of
BSC [6].
III. RESULT AND DISCUSSION
The SCOR discussion area in this study focuses on the
category of Plan and Make processes for small and medium
textile industries that produce a bag. The company's process
plan category is interpreted by the consumer demand
forecasting process. The make process category is a series of
product manufacturing processes. To determine the quantity
of goods to be produced, the object of SME uses a Make-to-
Order system. means the goods will be produced if they
have received orders from consumers. The process of bag
making begins with the process of receiving raw materials
by the warehouse. Then the production section will do
scheduling for the production process. After material
requirements and production schedules have been
established, continued mass production through the process
of marking patterns on materials, cutting materials and
sewing, followed by adding additional accessories in the
form of zippers, followed by checking process by quality
controllers on finished good. The business process is
presented in the figure APPENDIX1. SCOR BUSINESS
PROCESS IN PLANNING AND MAKING DECISION
AREA
A. SCOR Mapping
Goals or target of the production process in this SME is
to fulfil customer demands by always being consistent to
give the product that has a good quality with efficient cost
Internal Business
Company
Objective
usage. Based on the explanation the purpose of the project,
it can be identified that performance attributes can be used
as the table below:
Process
Metrics TABLE I. PRODUCTION OBJECTIVES
Atributes Objectives
The ability of company to fulfill the demand
Reliability of customer by providing a quality product
The ability of company to respond to
Agile
external influence
The ability of company to reduce the
Cost
operating cost of production processes
Plan process for making this product is to determine
quantity of the product and type of the product that must be
Supply Chain Company s
Objective produced. The amount of quantity and type of the product
requested can be found by customer ordering. So based on
the reference of the SCOR model, (i) level 1 sP-Plan (ii)
level 2 sP3-Plan Make and (iii) level 3 as the following table
below.
 TABLE II. SCOR MAPPING IN FORECASTING OF MAKE-TO- Variability a process is not
ORDER BUSINESS PROCESS
SCOR Mapping in Planning Process
consistently same
Level 1 Level 2 Level 3
Company Activities either in quantity
sP-Plan sP3-Plan Identify, prioritize and
or quality
1. Displaying the available
Make sP3.1 aggregate production product on website Waste RL % of total waste Weekly
requirements 2. Consumen choose the Processing transaction
product
Error
Identify assess and 3. System Create an order
sP3.2 aggregate production information Document and % of products RL The number of Monthly
resources Sales Order Document
meeting goods that meet
specified desired
Balance production
4. Proceed order after
environmental environmental
sP3.3 resources with performance specification
completing all requirement of
production requirements
ordering requirements
sP3.4 Establish product plan
Current Make AG Amount of goods Daily
Volume manufactured
TABLE III. SCOR MAPPING IN PRODUCTION OF MAKE-TO-
ORDER PRODUCT’S BUSINESS % of labor AG % labor used in Monthly
PROCESS used in manufacturing, not
SCOR Mapping in Make Process
Level 1 Level 2 Level 3 Company Activities manufacturing, used in direct
sM-Make sM1-Make
sM1.1 Schedule production activities
1. Receive the quantity order not used in activity
to Order 2. Create the Order Scheduling
Product sM1.2 Issue Material Receive the raw material
direct
1. Marking the pattern and cut them
sM1.3 Produce and test 2. Sew the pattern and zipper Cost to Plan CO Cost incurred to Monthly
3. Adding the accesorises
1. Checking the finished goods
Make plan the
sM1.4 Package
2. Packaging dan labelling goods production process
sM1.5 Stage product Temporarily store product before shipping
sM1.6 Release product to deliver
sM1.7 Waste Disposal
Prepare the finished goods to shipped
Waste collecting process
Direct Material CO Cost of that are Monthly
Cost straight related to
The actual mapping of business process into reference of the product
SCOR Model aims to obtain the right metrics as the
evaluation of activity performance itself. Metric performance Indirect Cost CO Cost that occurred Monthly
Related to to the product
is verified to parties that expert in that industry. In this case,
Production indirectly
the expert intended is the owner and head of production
division. Then, can be formulated in metric performance Direct Labor CO Direct cost spent Monthly
which is needed in company based in SCOR model [2]: Cost on production
labor
TABLE IV. VERIFIED PERFORMANCE METRICS
B. Balanced Scorecard Mapping
Metrics Description Calculation
Period The Balanced Scorecard provides a framework for
building coherent strategic goals. Coherence of strategic
Forecast RL The Accuracy of Monthly goals is built by creating a cause-effect relationship between
Accuracy Demand one strategic goal and another strategic goal [1]. The
Forecasting relationship of cause-effect relationship between one
Schedule RL % of time that a Daily strategic and the other strategic is depicted in the Fig. 2.
Achievement plant achieves its Seen in the picture the way to produce financial
production performance starts from the learning and growth perspective
schedule and through the perspective of the internal business process
and the customer perspective, the journey ends in a financial
Warranty Cost RL Include materials, Monthly perspective.
labor and problem
diagnosis for
product defects 1. The strategic goals in the learning and growth perspective
are directed to equip workers with the ability to work
Compliance RL % Compliance Monthly more efficiently then a professional culture of work is
Documentation documentation is built.
Accuracy complete and
correct 2. The ability of workers to work will support the internal
Yield RL The ratio of usable Monthly business process perspective, that is improving product
output from a quality. Another strategy objective is improving the
process to its quality service, means reducing the percent of error
input. occurrence in the process that can inhibit the arrival of
products to consumers. Enhanced production process
Yield RL The condition Monthly strategy, this strategic goal consists of the entire process
when the output of
 in production which is expected to contribute to meeting 1. CO.3.11
customer demand appropriately. Success in managing Direct
stakeholders is also expected to be able to support the Material
fulfillment of company needs appropriately and Cost
according to demand.
2. CO.3.12
3. Increasing product quality is expected to increase Direct Indirect Cost
customer trust in the product, thus this product can be Huge scale Material + Related to
Reduce
given as a recommendation to colleagues or anyone, production Indirect Production
Operation-
which will have an impact on the broader scope of the to reduce Material +
al Cost
company's market share. In addition, Maintain and fixed cost Direct 3. CO.3.13
enhance customer loyalty is to maintain consumers by Labor Direct Labor
guaranteeing aftersales service to each consumer, with Cost
the aim of increasing brand awareness of the product.
4. CO.3.3
4. To increase profit, it requires reducing operational costs Cost to Plan
in production and expanding market share that can Make
increase revenue.
(Number
Company’s Objective: Making SME as a pioneer in of own
providing quality products, trendy and worldwide designs of products
1. Increase
bags on the
promotion
market/
through
Financial (Number
social media
Increase of own
and digital
Market products
marketing
Customer Share on the
2. Expand
market+
marketing
Internal number of
network to
Business competitor
several cities
Process ’s
product))
Learning *100%
and Enhance (Customer RL3.55
Growth and end period- Warranty
Fig. 2. Company Scorecard of SME Textile Industry Maintain Availability new Cost
Customer of customer customer/
The table below is the result of performance mapping Loyalty services for customer
metrics based on SCOR model mapped into four Balanced 24 hours initial
Scorecard perspectives. period)
*100%
TABLE V. SCOR’S PERFORMANCE METRICS MAPPED TO 1.Consistentl
BALANCED SCORECARD
y in
Strategy Initiatives Formula SCOR’s providing
(Satisfied
Objectives Strategy/ Performance only good
responses/
Program Metrics quality
total of
1. Increase the Customer product
satisfaction
amount of satisfaction 2. Provide
survey
Increase product sold Revenue - warm and
responses)
Profit 2.Decrease Costs responsive
*100%
Operational services
Costs 3. Survey to
customer
1. Material Number RL.3.14 %
used free of Defect of products
dangerous Product meeting
Improving
chemical specified
product
content environment
quality
2. Use of -al
quality performance
materials requirements
 from trusted 3. In the objective strategy "enhance production process
suppliers strategy", the performance metrics involved are (i)
3. Do Forecast Accuracy (ii) Schedule of Achievement (iii)
Quality Yield (iv) Yield Variability (v) Waste Processing Error.
checking
4. In an objective strategy "improve the quality of services",
1. Do the RL.3.37
the performance metrics involved are Compliance
forecasting Forecast
Documentation Accuracy.
more Accuracy
accurate
2. Order R.3.49
Scheduling Schedule REFERENCES
3. Estimate Achievement [1] Mulyadi, Sistem Manajemen Strategik Berbasis Balanced Scorecard,
and prepare Yogyakarta: UPP AMP YKPN, 2005.
Enhance
material RL.3.58 [2] APICS, Supply Chain Operations Reference Model (SCOR) Version
production 12.0, Chicago: APICS, 2017.
required in Yield
process [3] J. Mulyana , l. Tjiang, M. E. Sianto and I. Gunawan, "Performance
production
strategy Measurement in PT.XYZ Using The Balanced Scorecard (a case
accurately RL.3.59 study of PT XYZ)," in International Conference on Industrial
4. Packaging Yield Engineering and Operation Management , Kuala Lumpur, 2016.
proses Variability [4] E. Lhassan, R. Ali and F. Majda, "Combining SCOR and BPMN to
5. Release Support Supply Chain Decision Making of the Pharmaceutical
product to RL.3.57 Whosaler-Distributors," IEEE, 2018.
deliver Waste [5] J. Thakkar, A. Kanda and S. Deshmukh, "Supply Chain Performance
6. Waste Processing MEasurement Framewok for Small and Medium Scale Enterprise,"
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Disposal Error 723, 2009.
Provide the
[6] J. K. Fernandes, V. Raja and A. Whalley, "Lesson from
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for Error Compliance Manufacturing Organization," technovation, no. 26, pp. 623-634,
quality 2006.
consumers services Documentati
services [7] M. F. Novar, A. Y. Ridwan and B. Santosa, "SCOR and AHP Based
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IV. CONCLUSION
[12] R. S. Kaplan and D. P. Norton, Translating Strategy into Action,
Based on the development of performance measurement Harvard Business School Press, 1996.
system using the integrated SCOR-Balanced Scorecard
Model, the results obtained are:
1. In the objective "reduce operational cost" strategy, the
performance metrics involved under the SCOR reference
model include (i) Direct Material Cost (ii) Direct Cost
Related to Production (iii) Direct Labor Cost and (iv)
Cost to Plan Make.
2. In the objective strategy of "improve product quality"
performance metrics involved based on SCOR the
reference model is % of products meeting specified
environment-performance requirements.
 APPENDIX1. SCOR BUSINESS PROCESS IN PLANNING AND MAKING DECISION AREA

Plan-Order Porcessing

Open Choose
Start
Website Product
Customer

Available Filling Chose Choose Received Checkout

product ? Yes Orderer Deliverying Checkout Invoice Process and
Information Method Method through Confirmati
No Email on
Choose Pre
Order
Product

Order
Displaying Pre Order Information End
product List Document
System

Sales Order
Document Send Received
Proceed
Invoice Confirmati
Order
on

Inform the
Production

Production
Availabilit
Process
y product
Supporting

Send Notification to
Update Availability
Consumer Who do the Pre
Status in the Website
Order Process

Manufacture Process

Marking Sew the Quality

Order Add the
and Cut as Materia Control
Scheduling Accesories
a pattern and Zipper Check
Rework
Production

Based on
Defect
Waste Order Recording Criteria
Received Order Quantity &
Specification and Material Processing Document Packaging Finished
Required Information Process Good

Start
Supporting

Order Send Order

Document Quantity and
Information Material Yes
Spesification

Received
Prepare and Move to Storage
Warehouse

Order Storage the

Send Location
Quantity and End Reject
Material Temporary
Material Product
Required before Shipping
Specification

Yes

Meet the
Quality Control

Specification
?
No

Categorizing Defect ?

No