However the management team neglected to specify how the performance in these

However the management team neglected to specify how

This preview shows page 110 - 113 out of 133 pages.

supplier rejection rate were agreed to be performance drivers for internal business perspective. However, the management team neglected to specify how the performance in these three areas would be improved. We would suggest that such improvements are possible through different mechanisms, including the better buyer–customer partnerships and coordination, the adoption of new development tools, and delivery reliability. As a result, we propose that explicit cause-and-effect relationships be identified before a balanced supply chain management scorecard is implemented. It is critical not only to relate performance drivers to the performance measures in each key area, but also to consider how each of the performance drivers will significantly improve one or more key measures of performance.
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Supply Chain Management 111 We also observed a surprising lack of intraorganizational communication as the balanced supply chain management scorecards were developed. For example in two of the three cases observed, the draft version of the BSC was circulated only to two or three members of the top management, and one or two key middle level managers and supervisory staff. All functional mangers were not told about the scorecard’s content or rational. Not surprisingly, they had little enthusiasm for a commitment to this concept. Individual performance objective and appraisal criteria for individual function were not linked directly to the BSC. As a result, we wish to stress importance of broadly communicating both the purpose and intent of balanced scorecard and firmly integrating it into the company’s performance management system. Scorecard templates and results that are communicated to employees can motivate their efforts and reward them for meeting targets. But a missing link is observed between the company’s bonus program and the BSC. Our discussions and limited testing within the company also suggest that graphical rather than tabular presentation formats be employed. Moreover, interorganization communications were also found weak during the process of development of the BSC. Supply chain trading partners such as customers and suppliers were not actively involved in the building process of the balanced supply chain management scorecard. The cases we studied reinforced a belief that while the specifics of balanced supply chain management scorecard will differ from organization to organization; it is beneficial to build upon a standard framework, such as the one presented here, rather than starting from the scratch. In one case where a clean-sheet approach was employed, the learning and growth perspective contained some measures that were clearly related to internal business operations, the customer perspective was poorly developed, and the internal business operations perspective neglected the measures, which are very crucial for day-to-day business operations.
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Supply Chain Management 112 Additional case studies are likely to reveal other barriers, obstacles and errors that can hinder the success of balanced supply chain management scorecard.
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