3. Few Interesting Aspects of BSC
Short & Long
Term Measures
Strategy
FormulationFinancial & Non
Financial Aspects
Its an
approach
Organizational
Alignment
Strategic
Performance
Measurement
Communication
Media
Balanced
Scorecard
Gives Big Picture
4. Mission
(Why we exist)
Values
(What’s Important to us)
Vision
(What we want to be)
Strategy
(Our Game Plan)
Satisfied
Shareholders
Delighted
Customer
Efficient and
Effective
Processes
Motivated
Workforce
Strategic Outcomes
What is Balanced Scorecard (BSC)?
7. BSC – ‘The Multi purpose Bridge’
Shareholders
Senior
Managers
Functional
Managers
• Contract between FM & SM
• Bridge strategy and personal
objectives
• Unlike normal budgeting vision
mission and strategy are cascades
to measurable objectives
• Coordinate between strategies and
short-term managerial targets
8. Aspects Balanced Scarecard
Motivation & Stress
Provide guidance and
may limit managers
‘Best Guess’
Balances Leading
KPIs & Lagging KPIs
Prevents Sub
Optimization
Used for
Performance
Management
Consensual Space &
Budgetary Slack?
9. Something to Think About…
Shareholder
expectations may not
always be financial
Interpretation of the
Model and Feasibility
Issues
11. Welcome to OMEGA LINE
• Fully Italian
• Exporting non quota garments
• Largest exporter to Europe
Sales volume $ 0.819 Billion
(2015)
• Employees over 12000 youth
State of the art facilities
located in
• Badalgama
• Bingiriya
• Polgahawela
• Sandalankawa
• Vauniya
12. BSC Process in OMEGA LINE
Mission – “Preferred
innovative apparel solution
provider for branded clothing”
Objective
Strategies
Performance Measures
through BSC
Translate
Objectives
in to
actionable
strategies
Set
measureme
nts in line
with
strategies
Adjust
objective
and or
strategies
based on
results
• Introduced as a measure to
improve organizational
performance
• Study revealed OMEGALINE
primarily uses BSC as a tool for
strategy implementation and as
a performance measurement
tool.
• Moreover, for implementing &
measuring performance in
• Corporate level
• Operational level
• SBU Level
• Individual level
14. Corporate Level KPIs
Level of
Analysis
Perspective
Finance Learning & Growth
Internal Business
Process
Customer
Corporate
Level
Contribution for
standard unit
Cadre composition
ratio
Forecast Accuracy
On Time
Delivery
Overhead cost per unit
Machine Capacity
Utilization
Account Receivables Labor turnover
Total inventory days
Labor
absenteeism
15. Business Level KPIs
Level of
Analysis
Sector
Perspective
Finance
Learning
& Growth
Internal Business
Process
Customer
Business
Level
1.Apparel
1.Cut ship ratio
2.Sewing efficiency
3.On time tracking
4.Sample order CT
5.Sample hit rate
2.Textile
1.Efficiency 1.Customer
Complaints
2.Lap dip CT Avg .CT. for Sample
Dev.
3.Manufacturing CT 3.Product Dev. Hit
Rate4.Supplier Lead time
3. Finishing
1.Final QC – 1st pass 1. Overall CT
2.Despatch Hit rate
3.Sample cycle time
17. Methodology
• Used Last 12 months average
KPI Information for the Study
• Used only CKPI information's
• Employs Multiple regression
Analysis for 4 Perspective
• Used Single Regression Analysis
for each perspective
18. Data Analysis
1- Four BSC Perspective & Organizational
Performance are positively correlated
2 - Learning & Growth, Financial, Internal
Business Process & Customer Perspectives
have a greater impact on Organizational
PerformanceHYPOTHSIS
19. Interpretation of Parameters
1. Adjusted coefficient of determination (R2) = 20.5%
2. Learning & Growth and Financial Perspectives are
statistically significant at 0.001 levels.
3. Hence the 1st Hypothesis;
Total perspectives have a certain impact on
Organizational Performance is partially (LGP & FP)
accepted in Omega Line.
20. Concluding Remarks for Hypothesis
Total perspectives
have significant
relationship with
organizational
performance
Specially Learning & Growth and Financial
Perspectives are significantly contributed to total
perspective and positive organizational performance
Total
Perspectives
Increase
Organizational
Performance
Increase
23. References
Johnson, H. T. and R. S. Kaplan (1987) Relevance Lost: The Rise and Fall of
Management Accounting, Boston: Harvard Business School Press.
Howell, R., J. Brown, S. Soucy, and A. Seed (1987) Management Accounting in the New
Manufacturing Environment, Montvale, NJ: National Assn. of Accountants and
CAM-I
Huselid, Mark A (1995) The Impact of Human Resource Management Practices on Turnover,
Productivity, and Corporate Financial Performance, Academy of Management Journal: 635-672
Kaplan, R. S. and D.P. Norton (1996a) The Balanced Scorecard: Translating Strategy into
Action, Boston: HBS Press.
Kaplan, R. S. and D.P. Norton (1996b) Using the Balanced Scorecard as a Strategic
Management System,” Harvard Business Review (January-February):75-85.
Kaplan, R. S. and D.P. Norton (1993) Putting the Balanced Scorecard to Work, Harvard
Business Review (September-October).
Kaplan, R. S. and D.P. Norton (1992) The Balanced Scorecard: Measures that Drive
Performance, Harvard Business Review, (January-February): 71-79.
