strategic measurement in the lean enterprise october 30, 2002 professor debbie nightingale

Strategic Measurement in the Lean EnterpriseStrategic Measurement in the Lean Enterprise

October 30 2002Professor Debbie Nightingale

Debbie Nightingale MIT copy 2001 2

Metrics Serve Multiple PurposesMetrics Serve Multiple Purposes

ldquoPerformance control systems can servetwo purposes to measure and to

motivaterdquo

H Mintzberg The Structure of Organizations (1979)


Metrics Are Measurements You Can UseMetrics Are Measurements You Can Use

bull Metrics are meaningful quantified measuresbull To be meaningful a metric must present data or information that allows us to take action ndash Helps to identify what should be done ndash Helps to identify who should do itbull Metrics should be tied to strategy and to ldquocorerdquo processes - they should indicate how well organizational objectives and goals are being met through disciplined ldquocorerdquo processesbull Metrics should foster process understanding and motivate individual group or team action to continually improve the way they do business (Measurement does not necessarily result in process improvement Good metrics always do)


When Assessing a Metric System AskWhen Assessing a Metric System Askthe Following Types of Questionsthe Following Types of Questions

bull Does it clearly define what constitutes business excellencebull Does it provide the information required to set aggressive yet achievable strategic objectives and stretch goalsbull Does it accurately portray our progress and probability of achieving both long-term strategic objectives and near-term milestonesbull Does it identify the root causes of barriersbull Does it focus the organization on the priority improvement needsbull Does it drive the behavior and actions required to achieve the objectivesbull Does it align work with valuebull Is it easy to usebull Does it involve everyone


What Are The Characteristics of aWhat Are The Characteristics of aldquoldquoGoodrdquo MetricGoodrdquo Metric

bull Easy to getbull Answers the questionsbull Produces the desired results


A ldquoGoodrdquo Metric Satisfies 3 Broad CriteriaA ldquoGoodrdquo Metric Satisfies 3 Broad Criteria

1 Strategic

2 Quantitative

3 Qualitative


StrategicStrategic

A good metric shouldbull Enable strategic planning and then drive deployment of the actions required to achieve strategic objectivesbull Ensure alignment of behavior and initiatives with strategic objectivesbull Focus the organization on its priorities

Example How fast do we need to develop and market newproducts to grow 20 percent per year



Quantification of Metrics is CriticalQuantification of Metrics is Critical

ldquoWhen you can measure what you are speakingabout and express it in numbers you know

something about it but when you cannotmeasure it when you cannot express it in

numbers your knowledge is of a meager andunsatisfactory kindrdquo

- Lord Kelvin


QuantitativeQuantitative

A good metric should

bull Provide a clear understanding of progress toward strategic objectives

bull Provide current status rate of improvement and probability of achievement

bull Identify performance gaps and improvement

opportunities

Example What is the cycle time of our product developmentprocess Where does the process need improving the most



QualitativeQualitative


bull Be perceived as valuable by your organization and the people involved with the metric

Example Is the effort and cost of collecting the data reasonableIs the information timely and actionable



Process ManagementProcess ManagementA Paradigm ShiftA Paradigm Shift

Go fromMeasure the process and manage the results(Inspection and Corrective Action Approach)

ToManage the process and measure the results

(Prevention Approach)


Major Categories of Hard Data forMajor Categories of Hard Data forNon-Financial Performance MetricsNon-Financial Performance Metrics

PrimaryMeasurements of

Process Improvement

QualityImprovement

TimeSavings

ProductivityImprovement

(Output Increases)

CostSavings


Two EdictsTwo Edicts

ldquoEffective measurement must be an integralpart of the management processrdquo

ldquoWhat you measure is what you getrdquo

RS Kaplan and DP Norton Harvard Business Review January-February 71-79 (1992)


The Balanced Scorecard AddressesThe Balanced Scorecard AddressesFour Key PerspectivesFour Key Perspectives

The balanced scorecard allows managers to look at the business fromfour important perspectives providing the answer to four basic questions

How do customers see us Customer perspective

What must we excel at Internal perspective

Can we continue to improve

and create value

Innovation and learning

perspective

How do we look to

shareholders

Financial perspective

While giving senior managers information from four different perspectivesthe balanced scorecard minimizes information overload by limiting thenumber of measures used


15

The Balanced Scorecard TranslatesThe Balanced Scorecard TranslatesStrategy into Operational TermsStrategy into Operational Terms

CustomerTo achieve customer satisfaction

how should we appear to customers

ShareholderTo increase shareholder value

How should we appear toour shareholders

ProcessTo sustain competitive advantage

what business processes mustwe excel at

PeopleTo have a winning team

what competenciesamp behaviors must we excel at

Visionand

Mission

STRATEGIES

Debbie Nightingale MIT copy 2001

Source From Kaplan and Norton The Balanced Scorecard

16

Balanced Scorecard Provides aBalanced Scorecard Provides aStrategic Framework for ActionStrategic Framework for Action

Clarifying and Translating theVision and StrategybullClarifying the visionbullGaining consensus

Planning and Target SettingbullSetting targets

bullAligning strategic initiativebullEstablishing milestones

Strategic Feedback amp LearningbullArticulating the shared visionbullSupplying strategic feedback

bullFacilitating strategy review and learning

Communicating amp LinkingbullCommunicating and educating

bullSetting goalsbullLinking rewards to performance

measures

BalancedScorecard




Balanced Scorecard IntegratesBalanced Scorecard IntegratesCompanyrsquos Reporting ProcessCompanyrsquos Reporting Process

ldquoThe scorecard brings together in a single reportmany of the disparate elements of the

companyrsquos competitive agenda eg becomingcustomer oriented shortening response time

improving quality emphasizing team-workreducing new product launch times and

managing for the long termrdquo



The Balanced Scorecard HierarchyThe Balanced Scorecard Hierarchy

Financial1048698bullCash flow ROI

1048698bullResidual income1048698bullPercent revenue from

innovation1048698bullResidual cash flow1048698bullRevenue growth

Customer1048698bullCustomer 1048698bullCustomer 1048698bullCustomersatisfaction loyalty service

Internal Business Processes1048698bullThroughput 1048698 bullReduction 1048698 bullOn-time

Time in waste deliveryInnovation and Learning

1048698bullNumber of new products 1048698bullReturn on innovation 1048698bullEmployee skills1048698bullTime-to-market (new products) 1048698bullTime spent talking to customers


The Balanced ScorecardThe Balanced ScorecardPerformance Measurement HierarchyPerformance Measurement Hierarchy

bull Performance measurement hierarchies are structured to provide the right level of performance-related informationbull Hierarchies are frequently formed in response to the need for the same measure to measure a similar aspect of performance but at different levels

H(F + G)

F(A + B)

G(C + D + E)

A B C D E

Level 1(eg Top Management)

Level 2(eg Middle Management)

Level 3(eg Workers)


20

The Balanced ScorecardThe Balanced ScorecardRelationship Between Process Improvement Strategy Vision amp MetricsRelationship Between Process Improvement Strategy Vision amp Metrics

VisionTop Management

Middle Management

Workers

Indices andindividual metrics

Indices andIndividual metrics

Individualmetrics ampsupportingcross-sectiondataand statistics

Source Adapted from R Simons Levers of Control (1995) p 63

Targets

Inputs Process Outputs

Feedback for process improvement

StrategyObjectives

Goals


Primary Purposes of the BalancedPrimary Purposes of the BalancedPerformance Metrics ScorecardPerformance Metrics Scorecard

bull Align a balanced set of performance metrics with business strategy and visionbull Provide management and work teams with the information necessary and sufficient to meet their objectives and goalsbull Create ldquoline-of-sightrdquo at lower levels of the organizationbull Foster and support process continuous improvemen

tinitiatives


Alignment of Strategic Objectives andAlignment of Strategic Objectives andMetrics is a Powerful ForceMetrics is a Powerful Force

ldquoWhen the critical success factors of a strategyare quantified and used as a measure of policydeployment they can become a powerful forcefor aligning organizational priorities actions

and behavior with strategic objectivesrdquo

- Raytheon Systems Metrics Team


Align Priorities Metrics and PeopleAlign Priorities Metrics and Peoplewith Your Strategywith Your Strategy

Process Use of Metrics

1 Define business excellence

for your business

Strategic measures of

success are established

2 Assess your progress Progress is compared to

world class to

competitors and to

strategic objectives

Gaps are quantified

3 Identify improvement

opportunities

Quantify potential gains

Set improvement

priorities goals and

timetables

4 Establish and deploy an

action plan

Key performance

indicators are aligned with

priorities and are

deployed at all levels of

the organization


Companies are Using the BalancedCompanies are Using the BalancedScorecard toScorecard to

bull Clarify and update strategybull Communicate strategy throughout the companybull Align unit and individual goals with the strategybull Link strategic objectives to long-term targets and annual budgetsbull Identify and align strategic initiativesbull Conduct periodic performance reviews to learn

about and improve strategy

Companies are expanding their use of the balancedscorecard employing it as the foundations of an integrated

and iterative strategic management system





No One ldquoRightrdquo Set of MetricsNo One ldquoRightrdquo Set of Metrics

bull The balanced scorecard has to be tailored to each specific company

bull The resulting scorecard of indicators should be driven by the firmrsquos strategy if it is not to consist merely of a listing of indicators

ldquohellipalthough there may be a potentially long list of non-financialindicators individual firms have to be selective by linking

explicitly their choice of indicators to their corporate strategyrdquo





Metrics Must Be Changed to MaintainMetrics Must Be Changed to MaintainAlignment With New StrategiesAlignment With New Strategies

Typical causes of metric misalignment are

1 The metric is wrong and must be changed to align with the strategy2 The right things are being measured but the strategy is out of date and must be realigned with the changing market3 Management perspective and policy are wrong and must change with the strategy and market4 The process has matured and new metrics are required


Best Life Cycle MetricsBest Life Cycle Metrics

METRICS Phase-IV

Business-Declining Product-PhaseOut Process-Optimize People-Expert

METRICS Phase-III

Business-Mature Product-In Market Process-Formalize People-Practice

METRICS Phase-II

Business-Growth Product-Development Process-Test People-Learn

METRICS Phase-1

Business-Emerging Product-Concept Process-Develop People-Competency

Customer

Product Development

Manufacturing

Supplier Relations

Support


Metrics Will Change Over an Itemrsquos Life CycleMetrics Will Change Over an Itemrsquos Life CycleEntity Phases Attributes

Business Emerging

Growth

Mature

Declining

bull Cash flow

bull Competitive advantage

bull Market share

bull Critical Mass

Product Concept

Development

In market

Phase-ou

bull Creative backlog

bull Potential product revenue

bull Cost per feature

bull Time to market

bull Performance requirements

bull Predicted product quality

bull Design to cost

bull Profitability

bull Market expansion rate

bull Volume impact on cost

bull Inventory

bull Customer support

Core

Competency

Recognition

Learn

Practice

Expert

bull Inventory of skills and capabilities


bull Acquire knowledge

bull Cycles of learning

bull Use

bull Apply

bull Levels of use in organization

bull Deployment

bull Teach

bull Leverage advantage

bull Combine and evaluate

Raytheon Systems 1998


Process and Metric Maturity ModelProcess and Metric Maturity Model

Little or no process focus Thatwhich exists is primarily directedinternally toward local operations

bullBusiness process management whichbegins amp ends with the customer isestablished in control and in theconscious thinking of management

bullCommon process language ampspecificationsbullIntegrated core processes allow aseamless flow of work across processboundaries

bullSupport processes are integrated withand enable core business processes toprovide competitive advantagebull Customer-focused processmanagement is applied unconsciously

bullProcess management hasprovided world-class competitiveadvantage (eg nodal influenceagile amp forward looking)

bullMetric-driven actions simulatedduring strategy setting process toensure organizational alignmentbefore metrics are implemented

bullAll metrics (process resultsorganizational geographic etc)align with strategic objectivesprovide competitive advantage ampoptimize the wholebullMetrics reinforce amp leverageactivities across all core businessprocessesbullLocal interests are subordinatedto the good of the whole

bullProcess metrics added ampintegrated with result metricsbullMetrics aligned betweenstrategy amp daily activities in coreprocesses

Metrics are ad hoc andprimarily results oriented



Level One InitialLevel One Initial

Enterprise does not manage its business with a processfocus

bull Many metrics sub-optimized by local organizational interests rather than having them aligned with customer interests and with the strategic objectives of the enterprisebull Organizations measure the results of past actionsbull Results-oriented metrics cannot provide the leading indicators needed for timely corrective action to change outcomes


Level Two Vertical AlignmentLevel Two Vertical Alignment

Definition

bull The business enterprise applies a process focus so it can measure leading indicators of the expected process outputbull Defective process output is viewed as a process-capability problem not a people problembull Carefully chosen metrics ensure that all levels of the organization align with strategic objectives

Vertical alignment is the alignment and reinforcement of strategicobjectives with supportive goals and progress measures at all

levels of the organization




Level Two ExampleLevel Two Example

A core process related to product development activitiesmight be documented be in control (repeatable) be

consistently deployed across the organization and havemeasurable improvement gains If so that process is

probably at or near Level 2 maturity If the metrics indicatevariations in the process results then they are still at Level

1 because the process is not in control






Level Three Horizontal AlignmentLevel Three Horizontal Alignment

Two phases1 The global optimization of work flow across all process boundaries These boundaries become transparent to the flow of work Metrics are customer-focused and assess the enterprise-level capability of a process to provide value from the customerrsquos perspective

2 The global optimization of work flow across all organizational boundaries that support or use a particular process Metrics are customer-focused and assess how well the infrastructure enables execution of customer-focused processes


Level Three ExampleLevel Three Example

Level 3 characteristics includebull Integrated core processes that customers see as seamlessbull Minimized hand-offs or delays as work moves among processes and sub-processesbull Management focus primarily on early process activities in a product life cyclebull Metrics insure local organizational interests (functional or business unit) are subordinated to customer needs and what is best for the entire business

The enterprise may have several core customer-related processessuch as winning new business and developing new products Also

the enterprise may have many functions that support or executethese core processes




Level Four Total AlignmentLevel Four Total Alignment

Definition

bull All employees clearly see where the business is headed and how they can make a differencebull Horizontal integration (Level 3) provides employees with ldquoline of sightrdquo to customer value Dramatic performance improvements can occur at this levelbull Total enterprise-level alignment (Level 4) is required to overcome the major systemic barriers to great performance and to embed the long-term gains into the fabric of the organizationrsquos culture

Total alignment is the synergistic interaction of metrics from allsupport processes with metrics from all core process to reinforce

the strategy and to drive business excellence




Level Four ExampleLevel Four Example

bull Total enterprise alignment is required to overcome the major

systemic barriers to great performance

At Level 4 the enterprise begins asking howenabling processes create competitive

advantage for the core customer-relatedprocesses rather than what they do to improve

themselves



themselves


Level Five OptimizingLevel Five Optimizing

bull From a process perspective the enterprise will have much greater influence on the market than its size might indicate The agile and forward-looking enterprise will be able to foresee events and respond to those events before they occur

bull From a metrics perspective the enterprise will be able not only to simulate and predict the outcome of a strategy before its deployment but also to predict the effect of specific metrics on the outcome of that strategy before choosing metrics


How One Company Built a StrategicHow One Company Built a StrategicManagement SystemManagement System

Clarify the Vision (months 1-4) Communicate to Middle Managers (months 4-5) Develop Business Unit Scorecards (months 6-9) Eliminate Non-strategic Investments (months 6) Launch Corporate Change Programs (months 6) Review Business Unit Scorecards (months 9-11) Refine the Vision (months 12) Communicate the Balanced Scorecard to the Entire Company (months 12-) Establish Individual Performance Objectives (months 13-14) Upgrade Long-Range Plan and Budget (months 15-17) Conduct Monthly and Quarterly Reviews (months 18-) Conduct Annual Strategy Review (months 25-26) Link Everyonersquos Performance to the Balanced Scorecard (months 25-26)

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Metrics Serve Multiple PurposesMetrics Serve Multiple Purposes

ldquoPerformance control systems can servetwo purposes to measure and to

motivaterdquo

H Mintzberg The Structure of Organizations (1979)












1 Strategic

2 Quantitative

3 Qualitative


StrategicStrategic









- Lord Kelvin







opportunities

















Process Improvement

QualityImprovement

TimeSavings


(Output Increases)

CostSavings












and create value


perspective

How do we look to

shareholders




15










Visionand

Mission

STRATEGIES



16









measures

BalancedScorecard






















H(F + G)

F(A + B)

G(C + D + E)

A B C D E



Level 3(eg Workers)


20



Middle Management

Workers





Targets



StrategyObjectives

Goals




tinitiatives










for your business




world class to

competitors and to


Gaps are quantified


opportunities


Set improvement


timetables


action plan

Key performance


priorities and are


the organization

























METRICS Phase-IV


METRICS Phase-III


METRICS Phase-II


METRICS Phase-1


Customer

Product Development

Manufacturing

Supplier Relations

Support



Business Emerging

Growth

Mature

Declining

bull Cash flow


bull Market share

bull Critical Mass

Product Concept

Development

In market

Phase-ou




bull Time to market



bull Design to cost

bull Profitability



bull Inventory


Core

Competency

Recognition

Learn

Practice

Expert





bull Use

bull Apply


bull Deployment

bull Teach






















Definition





























Definition












themselves



themselves








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1 Strategic

2 Quantitative

3 Qualitative


StrategicStrategic









- Lord Kelvin







opportunities

















Process Improvement

QualityImprovement

TimeSavings


(Output Increases)

CostSavings












and create value


perspective

How do we look to

shareholders




15










Visionand

Mission

STRATEGIES



16









measures

BalancedScorecard






















H(F + G)

F(A + B)

G(C + D + E)

A B C D E



Level 3(eg Workers)


20



Middle Management

Workers





Targets



StrategyObjectives

Goals




tinitiatives










for your business




world class to

competitors and to


Gaps are quantified


opportunities


Set improvement


timetables


action plan

Key performance


priorities and are


the organization

























METRICS Phase-IV


METRICS Phase-III


METRICS Phase-II


METRICS Phase-1


Customer

Product Development

Manufacturing

Supplier Relations

Support



Business Emerging

Growth

Mature

Declining

bull Cash flow


bull Market share

bull Critical Mass

Product Concept

Development

In market

Phase-ou




bull Time to market



bull Design to cost

bull Profitability



bull Inventory


Core

Competency

Recognition

Learn

Practice

Expert





bull Use

bull Apply


bull Deployment

bull Teach






















Definition





























Definition












themselves



themselves








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StrategicStrategic









- Lord Kelvin







opportunities

















Process Improvement

QualityImprovement

TimeSavings


(Output Increases)

CostSavings












and create value


perspective

How do we look to

shareholders




15










Visionand

Mission

STRATEGIES



16









measures

BalancedScorecard






















H(F + G)

F(A + B)

G(C + D + E)

A B C D E



Level 3(eg Workers)


20



Middle Management

Workers





Targets



StrategyObjectives

Goals




tinitiatives










for your business




world class to

competitors and to


Gaps are quantified


opportunities


Set improvement


timetables


action plan

Key performance


priorities and are


the organization

























METRICS Phase-IV


METRICS Phase-III


METRICS Phase-II


METRICS Phase-1


Customer

Product Development

Manufacturing

Supplier Relations

Support



Business Emerging

Growth

Mature

Declining

bull Cash flow


bull Market share

bull Critical Mass

Product Concept

Development

In market

Phase-ou




bull Time to market



bull Design to cost

bull Profitability



bull Inventory


Core

Competency

Recognition

Learn

Practice

Expert





bull Use

bull Apply


bull Deployment

bull Teach






















Definition





























Definition












themselves



themselves








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- Lord Kelvin







opportunities

















Process Improvement

QualityImprovement

TimeSavings


(Output Increases)

CostSavings












and create value


perspective

How do we look to

shareholders




15










Visionand

Mission

STRATEGIES



16









measures

BalancedScorecard






















H(F + G)

F(A + B)

G(C + D + E)

A B C D E



Level 3(eg Workers)


20



Middle Management

Workers





Targets



StrategyObjectives

Goals




tinitiatives










for your business




world class to

competitors and to


Gaps are quantified


opportunities


Set improvement


timetables


action plan

Key performance


priorities and are


the organization

























METRICS Phase-IV


METRICS Phase-III


METRICS Phase-II


METRICS Phase-1


Customer

Product Development

Manufacturing

Supplier Relations

Support



Business Emerging

Growth

Mature

Declining

bull Cash flow


bull Market share

bull Critical Mass

Product Concept

Development

In market

Phase-ou




bull Time to market



bull Design to cost

bull Profitability



bull Inventory


Core

Competency

Recognition

Learn

Practice

Expert





bull Use

bull Apply


bull Deployment

bull Teach






















Definition





























Definition












themselves



themselves








Slide 1

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Slide 38







opportunities

















Process Improvement

QualityImprovement

TimeSavings


(Output Increases)

CostSavings












and create value


perspective

How do we look to

shareholders




15










Visionand

Mission

STRATEGIES



16









measures

BalancedScorecard






















H(F + G)

F(A + B)

G(C + D + E)

A B C D E



Level 3(eg Workers)


20



Middle Management

Workers





Targets



StrategyObjectives

Goals




tinitiatives










for your business




world class to

competitors and to


Gaps are quantified


opportunities


Set improvement


timetables


action plan

Key performance


priorities and are


the organization

























METRICS Phase-IV


METRICS Phase-III


METRICS Phase-II


METRICS Phase-1


Customer

Product Development

Manufacturing

Supplier Relations

Support



Business Emerging

Growth

Mature

Declining

bull Cash flow


bull Market share

bull Critical Mass

Product Concept

Development

In market

Phase-ou




bull Time to market



bull Design to cost

bull Profitability



bull Inventory


Core

Competency

Recognition

Learn

Practice

Expert





bull Use

bull Apply


bull Deployment

bull Teach






















Definition





























Definition












themselves



themselves








Slide 1

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Slide 36

Slide 37

Slide 38















Process Improvement

QualityImprovement

TimeSavings


(Output Increases)

CostSavings












and create value


perspective

How do we look to

shareholders




15










Visionand

Mission

STRATEGIES



16









measures

BalancedScorecard






















H(F + G)

F(A + B)

G(C + D + E)

A B C D E



Level 3(eg Workers)


20



Middle Management

Workers





Targets



StrategyObjectives

Goals




tinitiatives










for your business




world class to

competitors and to


Gaps are quantified


opportunities


Set improvement


timetables


action plan

Key performance


priorities and are


the organization

























METRICS Phase-IV


METRICS Phase-III


METRICS Phase-II


METRICS Phase-1


Customer

Product Development

Manufacturing

Supplier Relations

Support



Business Emerging

Growth

Mature

Declining

bull Cash flow


bull Market share

bull Critical Mass

Product Concept

Development

In market

Phase-ou




bull Time to market



bull Design to cost

bull Profitability



bull Inventory


Core

Competency

Recognition

Learn

Practice

Expert





bull Use

bull Apply


bull Deployment

bull Teach






















Definition





























Definition












themselves



themselves








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Slide 38












and create value


perspective

How do we look to

shareholders




15










Visionand

Mission

STRATEGIES



16









measures

BalancedScorecard






















H(F + G)

F(A + B)

G(C + D + E)

A B C D E



Level 3(eg Workers)


20



Middle Management

Workers





Targets



StrategyObjectives

Goals




tinitiatives










for your business




world class to

competitors and to


Gaps are quantified


opportunities


Set improvement


timetables


action plan

Key performance


priorities and are


the organization

























METRICS Phase-IV


METRICS Phase-III


METRICS Phase-II


METRICS Phase-1


Customer

Product Development

Manufacturing

Supplier Relations

Support



Business Emerging

Growth

Mature

Declining

bull Cash flow


bull Market share

bull Critical Mass

Product Concept

Development

In market

Phase-ou




bull Time to market



bull Design to cost

bull Profitability



bull Inventory


Core

Competency

Recognition

Learn

Practice

Expert





bull Use

bull Apply


bull Deployment

bull Teach






















Definition





























Definition












themselves



themselves








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Visionand

Mission

STRATEGIES



16









measures

BalancedScorecard






















H(F + G)

F(A + B)

G(C + D + E)

A B C D E



Level 3(eg Workers)


20



Middle Management

Workers





Targets



StrategyObjectives

Goals




tinitiatives










for your business




world class to

competitors and to


Gaps are quantified


opportunities


Set improvement


timetables


action plan

Key performance


priorities and are


the organization

























METRICS Phase-IV


METRICS Phase-III


METRICS Phase-II


METRICS Phase-1


Customer

Product Development

Manufacturing

Supplier Relations

Support



Business Emerging

Growth

Mature

Declining

bull Cash flow


bull Market share

bull Critical Mass

Product Concept

Development

In market

Phase-ou




bull Time to market



bull Design to cost

bull Profitability



bull Inventory


Core

Competency

Recognition

Learn

Practice

Expert





bull Use

bull Apply


bull Deployment

bull Teach






















Definition





























Definition












themselves



themselves








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measures

BalancedScorecard






















H(F + G)

F(A + B)

G(C + D + E)

A B C D E



Level 3(eg Workers)


20



Middle Management

Workers





Targets



StrategyObjectives

Goals




tinitiatives










for your business




world class to

competitors and to


Gaps are quantified


opportunities


Set improvement


timetables


action plan

Key performance


priorities and are


the organization

























METRICS Phase-IV


METRICS Phase-III


METRICS Phase-II


METRICS Phase-1


Customer

Product Development

Manufacturing

Supplier Relations

Support



Business Emerging

Growth

Mature

Declining

bull Cash flow


bull Market share

bull Critical Mass

Product Concept

Development

In market

Phase-ou




bull Time to market



bull Design to cost

bull Profitability



bull Inventory


Core

Competency

Recognition

Learn

Practice

Expert





bull Use

bull Apply


bull Deployment

bull Teach






















Definition





























Definition












themselves



themselves








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H(F + G)

F(A + B)

G(C + D + E)

A B C D E



Level 3(eg Workers)


20



Middle Management

Workers





Targets



StrategyObjectives

Goals




tinitiatives










for your business




world class to

competitors and to


Gaps are quantified


opportunities


Set improvement


timetables


action plan

Key performance


priorities and are


the organization

























METRICS Phase-IV


METRICS Phase-III


METRICS Phase-II


METRICS Phase-1


Customer

Product Development

Manufacturing

Supplier Relations

Support



Business Emerging

Growth

Mature

Declining

bull Cash flow


bull Market share

bull Critical Mass

Product Concept

Development

In market

Phase-ou




bull Time to market



bull Design to cost

bull Profitability



bull Inventory


Core

Competency

Recognition

Learn

Practice

Expert





bull Use

bull Apply


bull Deployment

bull Teach






















Definition





























Definition












themselves



themselves








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20



Middle Management

Workers





Targets



StrategyObjectives

Goals




tinitiatives










for your business




world class to

competitors and to


Gaps are quantified


opportunities


Set improvement


timetables


action plan

Key performance


priorities and are


the organization

























METRICS Phase-IV


METRICS Phase-III


METRICS Phase-II


METRICS Phase-1


Customer

Product Development

Manufacturing

Supplier Relations

Support



Business Emerging

Growth

Mature

Declining

bull Cash flow


bull Market share

bull Critical Mass

Product Concept

Development

In market

Phase-ou




bull Time to market



bull Design to cost

bull Profitability



bull Inventory


Core

Competency

Recognition

Learn

Practice

Expert





bull Use

bull Apply


bull Deployment

bull Teach






















Definition





























Definition












themselves



themselves








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tinitiatives










for your business




world class to

competitors and to


Gaps are quantified


opportunities


Set improvement


timetables


action plan

Key performance


priorities and are


the organization

























METRICS Phase-IV


METRICS Phase-III


METRICS Phase-II


METRICS Phase-1


Customer

Product Development

Manufacturing

Supplier Relations

Support



Business Emerging

Growth

Mature

Declining

bull Cash flow


bull Market share

bull Critical Mass

Product Concept

Development

In market

Phase-ou




bull Time to market



bull Design to cost

bull Profitability



bull Inventory


Core

Competency

Recognition

Learn

Practice

Expert





bull Use

bull Apply


bull Deployment

bull Teach






















Definition





























Definition












themselves



themselves








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for your business




world class to

competitors and to


Gaps are quantified


opportunities


Set improvement


timetables


action plan

Key performance


priorities and are


the organization

























METRICS Phase-IV


METRICS Phase-III


METRICS Phase-II


METRICS Phase-1


Customer

Product Development

Manufacturing

Supplier Relations

Support



Business Emerging

Growth

Mature

Declining

bull Cash flow


bull Market share

bull Critical Mass

Product Concept

Development

In market

Phase-ou




bull Time to market



bull Design to cost

bull Profitability



bull Inventory


Core

Competency

Recognition

Learn

Practice

Expert





bull Use

bull Apply


bull Deployment

bull Teach






















Definition





























Definition












themselves



themselves








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METRICS Phase-IV


METRICS Phase-III


METRICS Phase-II


METRICS Phase-1


Customer

Product Development

Manufacturing

Supplier Relations

Support



Business Emerging

Growth

Mature

Declining

bull Cash flow


bull Market share

bull Critical Mass

Product Concept

Development

In market

Phase-ou




bull Time to market



bull Design to cost

bull Profitability



bull Inventory


Core

Competency

Recognition

Learn

Practice

Expert





bull Use

bull Apply


bull Deployment

bull Teach






















Definition





























Definition












themselves



themselves








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Business Emerging

Growth

Mature

Declining

bull Cash flow


bull Market share

bull Critical Mass

Product Concept

Development

In market

Phase-ou




bull Time to market



bull Design to cost

bull Profitability



bull Inventory


Core

Competency

Recognition

Learn

Practice

Expert





bull Use

bull Apply


bull Deployment

bull Teach






















Definition





























Definition












themselves



themselves








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Definition





























Definition












themselves



themselves








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Definition












themselves



themselves








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themselves



themselves








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strategic measurement in the lean enterprise october 30, 2002 professor debbie nightingale

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