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on 21-Apr-10 23:04.
Gordon manufactured two styles of fiberglass boats: one for water-skiing and pleasure, the other designed specifically for bass fishing. Both boats were manufactured on the same production line, switching between the two models as orders and demand shifted.
Business was booming. Obviously, that's the goal of any business so long as you can fill orders promptly. They were selling boats as fast as they could make them, about two boats per eight-hour shift. So they added a second shift running from 4:00 pm until midnight. At first, this second shift was unable to finish two boats per shift but caught up after several weeks. Nonetheless, production was still not meeting demand.
on 21-Apr-10 23:02.
1. It improves the bottom line by reducing process cost and improving productivity and mission effectiveness.
2. A performance measurement system such as the Balanced Scorecard allows an agency to align its strategic activities to the strategic plan. It permits -- often for the first time -- real deployment and implementation of the strategy on a continuous basis. With it, an agency can get feedback needed to guide the planning efforts. Without it, an agency is 'flying blind'.
3. Measurement of process efficiency provides a rational basis for selecting what business process improvements to make first.
4. It allows managers to identify best practices in an organization and expand their usage elsewhere.
5. The visibility provided by a measurement system supports better and faster budget decisions and control of processes in the organization. This means it can reduce risk.
on 21-Apr-10 23:01.
The Balanced Scorecard introduced customer metrics into performance management systems. Scorecards feature all manner of wonderful objectives relating to the customer value proposition and customer outcome metrics-for example, market share, account share, acquisition, satisfaction, and retention.
Yet amid all these measures of customer success, some companies lose sight of the ultimate objective: to make a profit from selling products and services. In their zeal to delight customers, these companies actually lose money with them. They become customer-obsessed rather than customer-focused. When the customer says "jump," they ask "how high?" They offer additional product features and services to their customers, but fail to receive prices that cover the costs for these additional features and services. How can companies avoid this situation? By adding a metric that summarizes customer profitability.
Consider the situation faced in the 1990s by one of the nation's largest distributors of medical and surgical supplies. In five years, sales had more than tripled to nearly $3 billion, yet selling, general, and administrative (SG&A) expenses, thought by many to be a fixed cost, had increased even faster than sales. Despite the tripling in sales, margins had declined by one percentage point and the company had just incurred its first loss in decades. Rather than SG&A costs being fixed or even variable, these costs had become "super-variable."
on 21-Apr-10 22:43.
Dr. Dean Spitzer,
Performance Management Thought Leader
IBM Almaden Research Center
Learn to integrate performance management and corporate strategy to create performance measures that truly reveal just how well your organization is executing strategy.
on 21-Apr-10 22:39.
In this article, CEO Pablo Contreras shares valuable insights into managing a complex organization delivering on equally complex customer requirements. He shares how InterComp leverages and adapts CPM tools, the Strategy Map and Balanced Scorecard to provide multi-cultural, multi-linguistic, and multi-faceted services across its sprawling, high growth enterprise. Contreras's Russian operation has taken the use of these tools to new heights. Its customers are a Who's Who's globally including Adidas, Motorola, Continental, IBM, Wrigley, Shell, RusAl, KMB-Bank, to name a few. And yes, InterComp's Customers love to see their Balanced Scorecard results. InterComp Chairman George E. Reese, voted "Outstanding Business Person of the Year" by the American Chamber of Commerce in Russia offers the following insights on the Balanced Scorecard, "The Balanced Scorecard is vital to a startup and early stage company for it provides the roadmap and focus for employees as they deal with rapid change and high growth and concurrently delivery outstanding results".
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