What is a balanced scorecard?

Balanced scorecards are a management system often used in Lean workplaces. This strategy works to drive performance while keeping everyone in the organization accountable. Balanced scorecards are a great tool for monitoring day-to-day work and evaluating progress in the context of “the big picture.”

High-level aspects of a company, or the big picture, are included in the system with things like long-term goals, core values, a mission statement, etc. When planning out daily operations, you can choose tasks that support those overarching themes. In addition to ensuring the work being done is aligned with company goals, a balanced scorecard can help managers prioritize projects, measure performance, and better communicate with workers.

The first step to creating a balanced scorecard is a meeting between upper management who will discuss and outline those high-level aspects of the organization including the main vision. From there, four essential concepts are mapped out: financial, customer, process, and growth. Within those elements, the objectives, key performance indicators, targets, and initiatives are detailed. Each component is interconnected and one I no more important than another. Only by having each and every piece with the framework be effective. The further you move from the center of the scorecard (vision and strategy) and move into the outer categories, the more relevant it is to what frontline workers will actually be doing to meet those high-level goals.

A balanced scorecard is typically formatted into a one-page document that includes charts, graphs, and some sort of color-coded system. Layout will vary from facility to facility, but information is usually sorted into three categories: a strategy map, the scorecard, and an action place. The action plan is what operators will be doing to support the mission or vision of the company and has tasks like inspections or monitoring. Managers can use a balanced scorecard to ensure what is happening on the factory floor is engaging workers with the overarching goals of the business.

 

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