The ticket to long-range company success

The balanced scorecard is an essential element of today’s business logistics world. Since its introduction by Kaplan and Norton in 1992, it has become increasingly important. In logistics and especially in logistics controlling, it is a tool that supports company efforts to measure the organization’s activities in terms of strategy. In terms of the supply chain, another perspective is added to the traditional balanced scorecard - that of the supplier.

A balanced scorecard adjusted to a supply chain

Financial perspective

Using key indicators, the financial perspective determines whether the implementation of strategies is producing improved earnings. The focus is placed on achieving cost advantages in the entire supply chain Supply chain . Relevant cost and performance drivers are presented in a structured and linked manner [1].

Customer perspective

The customer perspective determines a company’s strategic goals in terms of customer and market segments that the company wants to address. The key indicators of the customer perspective must facilitate a differentiation by various customer groups - e.g., industrial customers vs. end consumers [1].

Business processes

The process perspective shows those processes within a company’s value creation that are designed to promote the achievement of the goals of the financial and customer perspectives. The analysis of a company’s internal processes must be applied to the entire value chain [1].

Learning and developmental perspectives

Key indicators in the learning and developmental perspectives describe fundamental elements of the infrastructure that are needed for the other perspectives. To reflect the dynamic character of the supply chain Supply chain , department-centric thinking must be eliminated [1].

Supplier perspective

In addition to internal processes, preliminary work plays a major role in the creation of the highest possible customer satisfaction. A separation of customer and supplier perspectives facilitates a more sophisticated evaluation of performance. This approach makes it easier to link corresponding incentive systems [1, 2].

The balanced scorecard in logistics controlling

Conventional systems of key indicators generally relate to past events and concentrate on short-term financial value creation. The balanced scorecard, on the other hand, goes a step farther. It is designed to help determine the critical factors of a company’s long-range success. With the balanced scorecard, strategies are implemented in the operational business.
In this process, a company is usually examined from four perspectives - ranging from the traditional financial perspective to the perspectives of the customer, internal business processes, and learning and development.
In doing so, a company encounters a problem that results from improvements achieved by logistics measures often being inadequately reflected in reduced costs. As a result of the balanced scorecard, the logistics value propositions achieved in other perspectives can be described very well.
An expanded version of the balanced scorecard can be used for cross-company logistics networks or supply chains Supply chain . Strategies should be openly communicated within the supply chain, e.g., at supplier workshops. Objectives for individual companies should be derived from them. It is also recommended that a fifth perspective be added to the others: the supplier perspective [1].

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References

[1] Logistikmanagement | Pfohl 2004
[2] Die Integration der Balanced Scorecard in das Supply Chain Management-Konzept | Stölzle / Heusler / Karrer 2001. In: Logistik Management 3(2001)2-3