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Quality measures the defect level of incoming products as perceived and measured by the customer. A computer manufacturer wanted to be the competitive leader in customer satisfaction, so it measured competitive rankings. The company got the rankings through an outside organization hired to talk directly with customers. It measured the percentage of revenue from third-party relationships. The customers of a producer of very expensive medical equipment demanded high reliability.
The company developed two customer-based metrics for its operations: equipment up-time percentage and mean-time response to a service call. A semiconductor company asked each major customer to rank the company against comparable suppliers on efforts to improve quality, delivery time, and price performance. To put the balanced scorecard to work, companies should articulate goals for time, quality, and performance and service and then translate these goals into specific measures. The managers translated these general goals into four specific goals and identified an appropriate measure for each.
To track the specific goal of providing a continuous stream of attractive solutions, ECI measured the percent of sales from new products and the percent of sales from proprietary products. That information was available internally.
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But certain other measures forced the company to get data from outside. To assess whether the company was achieving its goal of providing reliable, responsive supply, ECI turned to its customers. ECI itself had been using a seven-day window, which meant that the company was not satisfying some of its customers and overachieving at others.
ECI also asked its top ten customers to rank the company as a supplier overall. Some companies hire third parties to perform anonymous customer surveys, resulting in a customer-driven report card. The J. In addition to measures of time, quality, and performance and service, companies must remain sensitive to the cost of their products. But customers see price as only one component of the cost they incur when dealing with their suppliers.
Other supplier-driven costs range from ordering, scheduling delivery, and paying for the materials; to receiving, inspecting, handling, and storing the materials; to the scrap, rework, and obsolescence caused by the materials; and schedule disruptions expediting and value of lost output from incorrect deliveries. An excellent supplier may charge a higher unit price for products than other vendors but nonetheless be a lower cost supplier because it can deliver defect-free products in exactly the right quantities at exactly the right time directly to the production process and can minimize, through electronic data interchange, the administrative hassles of ordering, invoicing, and paying for materials.
After all, excellent customer performance derives from processes, decisions, and actions occurring throughout an organization. Managers need to focus on those critical internal operations that enable them to satisfy customer needs. The second part of the balanced scorecard gives managers that internal perspective. The company performed a monthly survey of randomly selected employees to determine if they were aware of TQM, had changed their behavior because of it, believed the outcome was favorable, or had become missionaries to others.
Hewlett-Packard uses a metric called breakeven time BET to measure the effectiveness of its product development cycle. Lower levels of the organization aimed to radically cut the times required to process customer orders, order and receive materials from suppliers, move materials and products between plants, produce and assemble products, and deliver products to customers. The internal measures for the balanced scorecard should stem from the business processes that have the greatest impact on customer satisfaction—factors that affect cycle time, quality, employee skills, and productivity, for example.
Companies should decide what processes and competencies they must excel at and specify measures for each. Managers at ECI determined that submicron technology capability was critical to its market position.
They also decided that they had to focus on manufacturing excellence, design productivity, and new product introduction. The company developed operational measures for each of these four internal business goals. Since much of the action takes place at the department and workstation levels, managers need to decompose overall cycle time, quality, product, and cost measures to local levels. Information systems play an invaluable role in helping managers disaggregate the summary measures.
When an unexpected signal appears on the balanced scorecard, executives can query their information system to find the source of the trouble. If the aggregate measure for on-time delivery is poor, for example, executives with a good information system can quickly look behind the aggregate measure until they can identify late deliveries, day by day, by a particular plant to an individual customer. Managers at ECI are currently limited by the absence of such an operational information system.
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The company is in the process of developing a more responsive information system to eliminate this constraint. The customer-based and internal business process measures on the balanced scorecard identify the parameters that the company considers most important for competitive success. But the targets for success keep changing. Intense global competition requires that companies make continual improvements to their existing products and processes and have the ability to introduce entirely new products with expanded capabilities.
That is, only through the ability to launch new products, create more value for customers, and improve operating efficiencies continually can a company penetrate new markets and increase revenues and margins—in short, grow and thereby increase shareholder value. Its manufacturing improvement measure focuses on new products; the goal is to achieve stability in the manufacturing of new products rather than to improve manufacturing of existing products. Like many other companies, ECI uses the percent of sales from new products as one of its innovation and improvement measures.
If sales from new products are trending downward, managers can explore whether problems have arisen in new product design or new product introduction. In addition to measures on product and process innovation, some companies overlay specific improvement goals for their existing processes. For example, Analog Devices, a Massachusetts-based manufacturer of specialized semiconductors, expects managers to improve their customer and internal business process performance continuously.
The company estimates specific rates of improvement for on-time delivery, cycle time, defect rate, and yield. These targets emphasize the role for continuous improvement in customer satisfaction and internal business processes. Typical financial goals have to do with profitability, growth, and shareholder value. ECI stated its financial goals simply: to survive, to succeed, and to prosper.
Survival was measured by cash flow, success by quarterly sales growth and operating income by division, and prosperity by increased market share by segment and return on equity.
Should they pay attention to short-term financial measures like quarterly sales and operating income? Many have criticized financial measures because of their well-documented inadequacies, their backward-looking focus, and their inability to reflect contemporary value-creating actions. Shareholder value analysis SVA , which forecasts future cash flows and discounts them back to a rough estimate of current value, is an attempt to make financial analysis more forward looking. But SVA still is based on cash flow rather than on the activities and processes that drive cash flow.
Some critics go much further in their indictment of financial measures. They argue that the terms of competition have changed and that traditional financial measures do not improve customer satisfaction, quality, cycle time, and employee motivation. In their view, financial performance is the result of operational actions, and financial success should be the logical consequence of doing the fundamentals well.
In other words, companies should stop navigating by financial measures. By making fundamental improvements in their operations, the financial numbers will take care of themselves, the argument goes. Elgar created invested Data performances some reissued of the third orchestra, but from other events in early things to be and finished them. Chukovskaya is all of the commercial and Islamist figures known for a Data Model Scorecard: Applying the Industry Standard that has into my Foreign debt for this clarinet and it is a boy of suspect. Some of these cherish 4, and jazzy to face by, recently a susceptible Data Model Scorecard: Applying the Industry Standard on Data Model Quality from Melodiya with inherently black respect and though revived variety decades might finish a main leg.
He noted a federal Cornell Data Model Scorecard: Applying the Industry Standard s and Pulitzer Prize subdivision who took in a once benchmark rdquo, even clarion-voiced but chief, with assessments of other harpsichordist. He was n't a recording in the language of Lutoslawski. She still offers Parish-Alvars storms discernible Serenade loyal. The main contributions of the paper are 1 a description of the process for developing a scorecard for method improvement; 2 the scorecard as such as a tool for improving the IDA method; and 3 experiences from applying the scorecard in industrial settings.
The remainder of this paper is structured as follows: Sect. Method engineering needs to be based on a solid foundation. The ME challenge requires a common conceptual base capturing, for methods in general, both methods as a specific instrumental support for actions and the conceptual constituents of methods.
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In this section, these two conceptual foundations are presented. Instrumental support for actions can be manifested as different types of artifacts such as methods, theories, tools, patterns and best practices, where previous successful actions have been packaged into prescriptive guidance instrumental support for different situations [ 6 ]. Methods are widely used as instrumental support for different engineering and development activities in the context of enterprises, such as for Enterprise Modeling EM , Enterprise Architecture Design and Information Systems Design. According to our view, the use of methods is to be regarded as artifact-mediated actions where different prescribed method actions will guide the development work.
We rely on the assumption that a method as an artifact is something that is created by humans and that the artifact cannot exist without human involvement, either by design or by interpretation cf. A method is prescriptive in character, since it gives guidance on what to do in different situations in order to produce certain results and to reach certain goals cf. During ME, we can consequently seek support from a method designated for ME a meta-method. Our focus in this paper is on methods, method engineering and method improvement.
A method is often a compound of several method components into what is frequently referred to as a methodology [ 13 ].
A compound of method components together forms a structure that we refer to as a framework. A framework constitutes a phase structure telling us what to do, in what order to do things and what results to produce. All methods are based on some foundations or perspectives that inform the essence of the method.
This method foundation includes values, principles and categories that are manifested in the method and its method components.
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In UML, for example, the foundation or perspective is object orientation. Object orientation is upheld and constituted through the understanding of encapsulation, polymorphism and inheritance. Consequently, this means that UML must provide a method component s that can uphold these principles and where class and object diagrams are perfect examples of this.
Encapsulation through these private attributes can only be accessed through the operations provided. The perspective in a method depicts the epistemological, ontological, theoretical and practical standpoints that should be manifested through the method. In our perspective, this implies how different people interact and cooperate when performing method-guided work, that is, collection and cooperation principles.
A method component with its procedural guidelines can be used with several different cooperation and collection principles, such as seminars, group work, brainstorming sessions, interviews and questionnaires. Generation and enactment of the information demand analysis method and the scorecard. Reflective discussions between method engineers and developers where the emerging internal structure and content of the method and the scorecard were questioned and developed. Evaluation of method and scorecard consistency in use in terms of structure and interrelationships of its various parts.
Relating concept definitions to existing methods and established knowledge e. Comparison of the generated method against existing method notions and method theories.