Balanced Scorecard

Agenda
Contemporary measurement systems Framework of Balanced Scorecard

Contemporary measurement systems

"The only man I know who behaves sensibly is my tailor; he takes my measurements anew each time he sees me. The rest go on with their old measurements and expect me to fit them"
George Bernard Shaw

The Balanced Scorecard puts strategy and vision, not control, at the center

Financial Measures

Long-range Capabilities
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Framework of Balanced Scorecard

FINANCIAL Objectives To succeed financially, how should we appear to our owners (GoI)? Measures Targets Initiatives

CUSTOMER To achieve our Objectives vision, how should we appear to our customers? Measures Targets Initiatives

INTERNAL BUSINESS PROCESS

Vision and Strategy

To satisfy our people, what business processes must we excel at?

Objectives

Measures

Targets

Initiatives

LEARNING AND GROWTH To achieve our Objectives Measures vision, how will we sustain our ability to change and improve?

Targets

Initiatives

2012

Framework of Balanced Scorecard

How should we appear to our stock holders? How should we appear to our customers?

How to sustain our ability to change & improve?

What business processes should we excel & outsource?

Customer Perspective

Objectives
New products Responsive supply

Measures
Percent of sales from new products
On-time delivery (defined by customers) Share of key accounts' purchases, Ranking by key accounts Number of cooperative engineering efforts

Targets

Initiatives

Preferred supplier Customer partnership

Customer satisfaction
How satisfied have you been with----- attribute:
100% 90% 80% 10% 0%

Overall, how satisfied have you been with----product/service:

100% 90% 80% 10% 0%

To what extent does ----- meet your needs at this time:

Extremely well . Extremely poor

Internal Business Process (IBP)

"If you can't describe what you are doing as a process, you don't know what you are doing" [W. Edwards Deming]

IBP- Allows the managers to know whether its products & services conform to customer requirements
Decide what processes and competencies must be exceled at and specify measures for each IBP- stem from the business processes that have the greatest impact on customer satisfaction
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IBP(contd..)

Objectives Technical Capability Manufacturing Excellence

Measures Mfg. geometry vs. competition Cycle time Unit cost, Yield Engineering efficiency Actual introduction schedule vs. plan

Targets

Initiatives

Design productivity
New product Introduction

Learning & Growth

How to improve existing product, people, processes & add value? Objective: Technical leadership, manufacturing learning, time to market,
inter-personal perspective & self-perception

Measures: Time to develop next generation technology, process time,

new product introduction Vs. competition, communication, role-play & self-reflection