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Costi Standard: 7. Balanced Scorecard
The Balanced Scorecard is a strategic planning and management system used to translate an organization's mission and strategy into a comprehensive set of performance measures. It provides managers with a fast and comprehensive view of the organization from four important perspectives: financial, customer, internal business processes, and learning and growth. The four perspectives are interconnected, with internal business processes affecting customer satisfaction, customer satisfaction affecting financial outcomes, and continuous learning and improvement affecting all areas.
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Costi Standard: 7. Balanced Scorecard
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- 2. The Balanced Scorecard Managementtranslates its strategy into performance measures that employees understand and accept. Management translates its strategy into performance measures that employees understand and accept. Performance measures Customers Learning and growth Internal business processes Financial
- 3. The Balanced Scorecard Howdo we look to the owners? How can we continually learn, grow, and improve? In which internal business processes must we excel? How do we look to customers?
- 4. The Balanced Scorecard Learningimproves business processes. Improved business processes improve customer satisfaction. Improving customer satisfaction improves financial results.
- 5. Benefits of BalanceScorecard If implemented well: • Forces management to articulate a coherent strategy. • Strategy is communicated throughout organization. • Performance measures are more likely to be consistent with strategy and actionable. • Portfolio of measures reduces gaming problems. • Feedback loop makes strategy dynamic. If implemented well: • Forces management to articulate a coherent strategy. • Strategy is communicated throughout organization. • Performance measures are more likely to be consistent with strategy and actionable. • Portfolio of measures reduces gaming problems. • Feedback loop makes strategy dynamic.
- 6. Some Possible Problems Cultural/behavioral •Program fatigue. • Culture shock/resistance. • Every existing performance measure has a champion. • Gaming still possible. Cultural/behavioral • Program fatigue. • Culture shock/resistance. • Every existing performance measure has a champion. • Gaming still possible.
- 7. Process time isthe only value-added time. Delivery Performance Measures Wait Time Process Time + Inspection Time + Move Time + Queue Time Delivery Cycle Time Order Received Production Started Goods Shipped Throughput Time
- 8. Delivery Performance Measures Manufacturing Cycle Efficiency Value-added time Manufacturingcycle time = Wait Time Process Time + Inspection Time + Move Time + Queue Time Delivery Cycle Time Order Received Production Started Goods Shipped Throughput Time
- 9. Quick Check ATQM team at Narton Corp has recorded the following average times for production: Wait 3.0 days Move 0.5 days Inspection 0.4 days Queue 9.3 days Process 0.2 days What is the throughput time? a. 10.4 days b. 0.2 days c. 4.1 days d. 13.4 days A TQM team at Narton Corp has recorded the following average times for production: Wait 3.0 days Move 0.5 days Inspection 0.4 days Queue 9.3 days Process 0.2 days What is the throughput time? a. 10.4 days b. 0.2 days c. 4.1 days d. 13.4 days
- 10. A TQM teamat Narton Corp has recorded the following average times for production: Wait 3.0 days Move 0.5 days Inspection 0.4 days Queue 9.3 days Process 0.2 days What is the throughput time? a. 10.4 days b. 0.2 days c. 4.1 days d. 13.4 days A TQM team at Narton Corp has recorded the following average times for production: Wait 3.0 days Move 0.5 days Inspection 0.4 days Queue 9.3 days Process 0.2 days What is the throughput time? a. 10.4 days b. 0.2 days c. 4.1 days d. 13.4 days Quick Check Throughput time = Process + Inspection + Move + Queue = 0.2 days + 0.4 days + 0.5 days + 9.3 days = 10.4 days
- 11. Quick Check ATQM team at Narton Corp has recorded the following average times for production: Wait 3.0 days Move 0.5 days Inspection 0.4 days Queue 9.3 days Process 0.2 days What is the MCE? a. 50.0% b. 1.9% c. 52.0% d. 5.1% A TQM team at Narton Corp has recorded the following average times for production: Wait 3.0 days Move 0.5 days Inspection 0.4 days Queue 9.3 days Process 0.2 days What is the MCE? a. 50.0% b. 1.9% c. 52.0% d. 5.1%
- 12. A TQM teamat Narton Corp has recorded the following average times for production: Wait 3.0 days Move 0.5 days Inspection 0.4 days Queue 9.3 days Process 0.2 days What is the MCE? a. 50.0% b. 1.9% c. 52.0% d. 5.1% A TQM team at Narton Corp has recorded the following average times for production: Wait 3.0 days Move 0.5 days Inspection 0.4 days Queue 9.3 days Process 0.2 days What is the MCE? a. 50.0% b. 1.9% c. 52.0% d. 5.1% Quick Check MCE = Value-added time ÷ Throughput time = Process time ÷ Throughput time = 0.2 days ÷ 10.4 days = 1.9%
- 13. Quick Check ATQM team at Narton Corp has recorded the following average times for production: Wait 3.0 days Move 0.5 days Inspection 0.4 days Queue 9.3 days Process 0.2 days What is the delivery cycle time? a. 0.5 days b. 0.7 days c. 13.4 days d. 10.4 days A TQM team at Narton Corp has recorded the following average times for production: Wait 3.0 days Move 0.5 days Inspection 0.4 days Queue 9.3 days Process 0.2 days What is the delivery cycle time? a. 0.5 days b. 0.7 days c. 13.4 days d. 10.4 days
- 14. A TQM teamat Narton Corp has recorded the following average times for production: Wait 3.0 days Move 0.5 days Inspection 0.4 days Queue 9.3 days Process 0.2 days What is the delivery cycle time? a. 0.5 days b. 0.7 days c. 13.4 days d. 10.4 days A TQM team at Narton Corp has recorded the following average times for production: Wait 3.0 days Move 0.5 days Inspection 0.4 days Queue 9.3 days Process 0.2 days What is the delivery cycle time? a. 0.5 days b. 0.7 days c. 13.4 days d. 10.4 days Quick Check Delivery cycle time = Wait time + Throughput time = 3.0 days + 10.4 days = 13.4 days