Tag Archives: balanced scorecard

Financial vs Operational Metrics

There are hundreds of supply chain metrics, many of them ‘standard’ to a degree – order cycle time is a pretty standard metric, though you can tweak the “when” for when the order arrives as well as when the delivery is handed the customer, but most serious supply chain professionals agree on major definitions.

Some organizations use far too many metrics – I recall a Supply Chain re-engineering and ERP implementation I was involved with, which had with 20 operational reports, only two of which were used. The cost to develop was amazing. The flip side is organizations that attempt to guide operations exclusively with financial metrics. An example may be to look exclusively at either total supply chain cost, or perhaps inventory. If you are organized to look at supply chain by P&L only, or worse, by general ledger line, it makes perfect sense to simply set up a metric, and report and try to manage and optimize the supply chain by that financial view.  Continue reading

Growing Up

Many years ago (September, 1994) I read an Scientific American article “Software’s Chronic Crisis” with interest – my job at the time being precisely “Software Development”. The article introduced me to “CMM” (Capability Maturity Model) in software development, as an aid to improving software to avoid the inevitable ‘crisis’. “Maturity” here didn’t connote age (there are certainly very old IT organizations I’ve worked in I would hardly call ‘mature’) but rather ‘well developed’. Continue reading