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1/10

Balanced Score Card

Approach Definition= set of

performancemeasures driven by &supporting theorganizations strategy

Strategies caninclude: costleadership,differentiation and/or

focus/niche must be something

employee can havean effect on andunderstand

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Performance Measures 4

GroupsScore Card Normally Has the

following sections:

Financial - tied to financialgoals/objectives

Customer base - to win & retaincustomer based

Internal Business Processes -what to we need to support 1 &2

Learning & Growth -how to reactand manage change withcontinuous improvement

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Performance Measures

Quite often link betweenperformance measures

i.e.. Customer satisfactionincrease = increased car sales

Need to keep in mind:consistency so all are workingtogether(avoid cross purposes),dont have too many measures,

ensure they are specific andmeasurable

Balance Score Card helps track& test management strategy

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Other Performance Measures

Delivery- focus on

getting increase

quality product to

the customer asapto retain and attract

customers

Involves examining

delivery cycles and

throughout time

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Delivery Performance Measures

Critical to focus on thecustomer as extremelycostly to get lost customersback

Need to calculate deliverytime accurately in orderand must deliver on time tokeep customer happy

Concentrate on valueadded activities

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Process time is the only value-added time.

Wait Time

Process Time + Inspection Time

+ Move Time + Queue Time

OrderReceived

ProductionStarted

GoodsShipped

Delivery Cycle Time

Throughput Time

Manufacturing

CycleEfficiency

Value-added time

Throughput time=

Delivery Performance Measures

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Delivery Performance

Measures

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Delivery Performance

If the MCE is less than 1, non-value-added

time is present in the production process

An MCE of 0.4 would mean that 60% (1.0

0.4 = 0.6) of the total production time consists

of queuing, inspection, and move time, and

therefore only 40% of the total time is

productive

By monitoring and improving MCE,

companies are able to pare away non-value-

added activities

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Delivery Cycle Example -

MCE

Bob Dylan Inc. keeps track of thefollowing time related to producing anddelivering 1000 units of the latest greatest

hits album: Waiting time = 10 days

Inspection time = .1

Processing time =.5

Move time = .2

Queue time = 2

What is the throughput time, MCE andDelivery Cycle time?

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Solution