Supply Chain Balanced Scorecard

Supply Chain Balanced Scorecard

The balanced scorecard is a strategic planning and management system that is used extensively in business and industry worldwide to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals.

The Supply Chain Balanced Scorecard tracks a limited number of key metrics. These metrics should be closely aligned to the companies strategic objectives. The measurements usually cover 4 areas:

  • 1. Financial – Example: The cost of manufacturing, warehousing, transportation etc.
  • 2. Customer – Example: Order Fill Rate, Backorder Levels, OnTime Delivery 3.
  • 3. Internal Business – Example: Adherence-To-Plan, Forecast Error
  • 4. Training: Example: In house Training Hours, APICS Membership/ Certification.

While the Balanced Scorecard approach was not specifically designed for the Supply Chain, it does give a good guidance for your core measures. The central idea is to focus on key metrics that have real meaning to your company. You don’t want to get lost in a sea of numbers that don’t really mean anything. The Balance Scorecard approach helps you to keep your measures aligned with your objectives. These measures should be tracked over time (usually monthly) with specific targets for each.

SUPPLY CHAIN MANAGEMENT METRICS