Sustainable Solutions for SCM

The last three perspectives focus on non-financial measures that are drivers of the long-term financial success. For each perspective objectives are defined, that are operationalised by measures for which targets are set and initiatives are developed how the objectives could be met (see Figure 3.12).

Figure 3.12 Balanced scorecard From the financial perspective, besides the shareholder perspective which can be represented by value orientedmeasures such as added economic value or ROI, other financial measures that are drivers for those measures and are depending on the characteristics of the company can be used as well. Such measures can be cost or working capital. In the customer perspective customer service and satisfaction are the most important indicators, that can be supplemented by market and/or account share, customer profitability, or service calls to formulate the goals in the customer perspective in a holistic manner. Indicators in the operational excellence perspective give management an insight into the effectiveness of their operations. Indicators that can be used are quality, response time, cycle/lead time, newproduct development time or inventory are appropriate indicators. Indicators in the innovation and learning perspective provide an overview of how successful human resources, innovation, and knowledge management are. Possible indicators are employee satisfaction and retention, information availability or employee skills. Another aspect and focus of the balanced scorecard is the strategy map where cause-and-effect-relations between the different objectives are shown to illustrate how the ultimate financial goals can be met. This is the heart of the instrument and should be done by means of a workshop in the management team. From the strategy map a balanced scorecard and an implementation plan can be derived. In Figure 3.13, an example for an airline that is planning to increase its profit by speeding up the ground handling time is shown.

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