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Operations Article | Managing the Global Supply Chain

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Managing the Global Supply Chain: A Risk Measurement Perspective

- by Krishnakanth K. K. & Pankaj Ghai *

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Balanced Scorecard

Concept of Balanced Scorecard14

The balanced scorecard seeks to provide a mechanism for shifting focus from the traditional financial measures of company performance to a balance between financial and non-financial measures. The balanced scorecard lets executives see whether they have improved in one area at the expense of another. Forcing all dimensions in one picture protects companies from posting suboptimal performance. It provides answers to four basic questions for a company:

  • How do customers see us? (customer perspective): Most of the companies are today seeking a transition from an inside-out point of view to an outside-in point of view. In the outside world, the most important stakeholders are the customers. How a company is performing from its customers' perspective has become, therefore, a priority for top management. The balanced scorecard demands that managers translate their general mission statement on customer service into specific measures that reflect the factors that really matter to customers.

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    14 Robert Kaplan and David P. Norton, "The Balanced Scorecard - Measures that drive performance", HBR, 1992.
    Werner Delfmann and Sascha Albers, "Supply Chain Management in Global Context", www.uni-koeln.de/wiso-fak/planung, 2002.


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    * Contributed by -
    Krishnakanth K. K. & Pankaj Ghai,
    PGP Students.
    IIM Lucknow.


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