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Balanced Score Card (BSC)Springs Window Fashions
Tim MurphyJohn KluthDave Murn
Objectives of BSC Review BSC—Effective Communication Tool
Financial Voice of Customer/Consumer Voice of Process Voice of Associate
BSC—How SWF uses it Integration of Strategic Planning Process Cascading Flow Sustaining BSC Process
Keeping Score tool BSC—Key Learnings and Next steps
BSC-Communication Tool What is SWF BSC? -- Key business metrics that drive core elements of
business—more than financial—BALANCED business view How is SWF BSC formatted? – In addition to Financial, BSC is
formatted around SWF core strategic areas (Customer, Process, Associate)
Metrics should be aligned with Strategic Plan Assign Metric Owners – Accountable to determine and report metrics Make it visual Pick quantitative and qualitative
measures Roll it out to the full organization to
create alignment and engagement How to Start? -- Start with the
metrics you currently have and make improvements as you go forward
Division Balanced Score Card
BSC-How SWF uses it BSC is Agenda for Monthly Business Review meeting Measures ‘how we’re doing’ as a company Process & People Data Critical to business results - (Reynosa turnover) Team Goals (SLT & Management team) developed around supporting BSC objectives A powerful ‘standard’ communication tool-I/T Dept Meeting agenda item Cascading goals driven down through the organization
Integration of Strategic Planning Process CTB Balance Scorecard
Wood Platform DO SR
DH PlatformSF EB
Cellular PlatformDO /SF LG
Stock Platform
SF/ GS /LG JS
Contract Platform DL DS
RZ SF
RZ DL/LG/GE
GS CU +
GS DW
GS MM GS / DO
Various
MC DB
RZTM, DM, MC
RZMC, TM, DM
RZDM, TM, MC
Visual Indicator Key:
= On Target = Above Target = Below Target
Visual Indicator Shows Progress to Project Plan
"The Charge is to make the Important Measurable, Not the Measurable Important!"
STRATEGIES OBJECTIVES Visual Indicator
Fo
ur C
ore
Str
ate
gie
s t
o D
riv
e O
ur B
Ex
Jo
urn
ey
Core Process Owners
Team Leader
Sponsor
Busin
ess P
latf
orm
s
Teaming & Project Management
Strategic Insight
Influencer Application Selling
Designer Decorator Growth - Market Segmentation
STRATEGIC TEAM
Communication
Days to Deliver
Freight Cost Reduction
$10MM Opportunity
COPQ Improvement / AQ2NL
Inventory DaysR
ob
b M
cC
an
nL
isa
Gin
gle
sC
hu
ck U
mh
oe
fer
Gary
Schlo
sser
Customer
Order Fulfillment
People, Process Culture
Substa
ntially im
pro
ve d
istr
ibution p
enetr
ation
within
specia
lty, desig
ner/
decora
tor,
contr
act
and d
irect to
consum
er
channels
. D
efe
nd
curr
ent pro
gra
ms a
nd intr
oduce n
ew
"valu
e
added" c
oncepts
pro
actively
to k
ey c
usto
mers
*L
ow
er c
osts
th
roug
h s
up
ply
ch
ain
ma
nag
em
ent,
new
ap
proach
es t
o s
ourcin
g
/ off
sho
re m
anufa
ctu
rin
g, cycle
tim
e
pro
ce
ss im
prove
men
t a
nd
outr
ight
prod
uctivity g
ain
s w
hic
h g
en
erate
"rea
l
valu
e" p
rodu
cts
an
d s
ervic
es.
Ta
ke B
est E
xp
erie
nce t
o th
e
ne
xt le
ve
l th
roug
h c
ontin
ued
qu
ality
, p
rocess a
nd s
erv
ice
imp
rove
men
t, e
mb
racin
g
BE
x v
alu
es a
nd
in
creas
ing
org
an
iza
tio
na
l ca
pa
bilit
ies
thro
ug
h le
arn
ing.
Engineering Department Balanced Score Card
Department Metrics Department Metrics
#Gross-To-Net Costs *
#Cost of Poor Quality
####Engineering Fixes
####TOTALS
#Quality Tra ining 2003
#Air Fre ight
##
Turnover:USA # x $Reynosa # x $
#Remakes# x $ each
####Dept 325 (Inspection)
####Dept 323 (Q ualit y Eng)
#Dept 322 (Rework)
#Scrap (All 680 Accounts)
Ext. FailureInt. FailureAppraisa lPrevent ion
Necessary Quality Costs
Avoidable Quality Costs
COQ Month $COQ YTD $Gross Sales $COQ Month as % of Gross Sales %Net Sales $
COPQ as a % of Net Sales for the Month %
COPQ has been expanded in 2003 to include specific return and allowance codes based on work from the Gross-To Net QAT
*Includes return & allowance codes:
10, 13, 15, 41, 42, 44, 45, 47, 49, 50, 51, 52, 55, 58, 59, 60
Int. Failure =
$#
Prevention = $#
Appraisal =
$#
Ext. Failure =
$#
Senior Leader’s AIP Goals Self -Assessment
Supervisory Assessment
NAME: Mike Cienian TITLE: Vice-President Quality/Engineering DEPT: Officers – 602 SUPERVISOR: Ron Zabel (Name & number)
Wei
ght
Objectives & Actions: List 2-4 object ives at the beginning of the year. Objectives should be Specific, Measurable, Attainable, Relevant and T rackable (SM ART). Additionally, list speci fic actions required to meet each object ive. For each object ive, define the standard by which performance will be measured. Measuremen ts should be quantitat ive (dollars, units, time measuremen ts, service levels, defects etc) and/or qualit ative (customer sat isfaction , survey results). Then define the minimum level of acceptable performance (threshold), the desired level of performance (target), and exceptional performance (max imum).
Target Performance COPQ improvemen ts are 75% of 2003 goal, Final COPQ of # = $ savings Quality Remakes improve 10% to 2 .52% by the end of the year.
30 % Objective &Action: . Achi eve COPQ (Cost of Poor Quality) improvemen ts per Crosby Model and Improvement goals of Balanced ScoreCard Achi eve Remakes Improvemen t Scores for “Quality Remakes” as identified for Strategic Planning goals.
Threshold: COPQ improvemen t is 50% of goal for 2003, Final COPQ of %= $ savings Quality Remakes improve 5% to 2.66% by the end of the year.
Maximum :. COPQ improvemen t is 100% of goal for 2003 Final CO PQ of % = $ savings Quality Remakes Improve 15% to 2.38% by the end of the year.
Target Performance: 7 of 9 projects complete 30% Complete implementation of (9) Product Impro vement Pro jects Threshold:
6 of 9 projects complete Maximum : 9 of 9 projects complete
Department Manager’s AIP GoalsINDIVIDUAL OBJECTIVES WORKSHEET
Self -Assessment
Supervisory Assessment
NAME: Tom Merker TITLE: Engineering Manager DEPT: Product Engineering (368) SUPERVISOR: Mike Cienian (Name & number)
Wei
ght O bjectives & Action s: List 2 -4 objectives at the beginning of the year. Objectives should be Specific, Measurable, Attainable, Relevant and Trackable
(SMART). Additionally, list specific actions re quired to meet each objective. For each objective, define the standard by which performance will be measured. Measurements should be quantitative (dollars, units, time measurements, service levels, defects etc) and/or qualitative (customer satisfaction, survey results). Then def ine the minimum level of acceptable performance ( threshold), the desired level of performance (target), and exceptional performance (maximum).
Target Performance: Complete 7 of 7 by months indicated. 20% O bjective & Actions: Improve Product Quality Implement design changes on the following product quality issues: 1. EZ Up cord tension pulley (April 2003) 2. EZ Up on cordless platform (June 2003) 3. G85 transmission (June 2003) 4. Color coordination project (December 2003) 5. Garden Retreat replacement (December 2003) 6. Product Specifications for drapery hardware(September 2003) 7. New cord lock introductions: cellular /pleated (J uly/Sept)
Threshold: Complete 4 of 7 by year -end.
Maximum: Complete 7 of 7 1 -month prior to indicated under target.
Results at year-end: Assess what level of performance has been achieved, as well as the quality and timeliness of activities completed.
Dept BSC
Department Metrics
Senior Leader’s
AIP Goals
Manager’s AIP Goals
Team AIP GoalVOA- Attitudes, Skills, Knowledge to ensure Engagement
VOP-Processes are created or improved to ensure Discipline to ImplementVOC/C-Products and Services to ensure we Move Closer to the Consumer
MaximumATO On-time vsoriginal promise date -%On-time stock shipments - %
ThresholdATO On-time vsoriginal promise date -%On-time stock shipments - %
TargetATO On-time vs original promise date - %On-time stock shipments - %
Objectives and Actions:
Take BEx to the next level so that our consumer needs determine our actions and directionACTIONS:ATO on-time vs original promise date – %
On-time stock shipments %Circuit breaker - % on original promise date
33.3%
Great Place to Work Associate Satisfaction Survey
Associate Satisfaction
Survey
Division Team AIP
Goal
Senior Leader’s AIP Goals Self -Assessment
Supervisory Assessment
NAME: Mike Cienian TITLE: Vice-President Quality/Engineering DEPT: Officers – 602 SUPERVISOR: Ron Zabel (Name & number)
Wei
ght
Objectives & Actions: List 2-4 object ives at the beginning of the year. Object ives should be Specific, Measurable, Attainable, Rel evant and Trackable (SMART). Additionally, list specific act ions required to meet each objective. For each objecti ve, define the standard by which performance will be measured. Measuremen ts should be quantitat ive (dollars , units, time measuremen ts, service levels, defects etc) and/or qualitat ive (customer satisfaction, survey result s). Then define the minimum level of acceptable performance (threshold), the desi red level of performance (target), and exceptional performance (maximum).
Target Performance CO PQ improvemen ts are 75% of 2003 goal , Final COPQ of # = $ savings Quality Remakes improve 10% to 2.52% by the end of t he year.
30 % Objective &Action: . Achieve COPQ (Cost of Poor Quality) improvemen ts per Crosby Mo del and Improvement goals of Balanced ScoreCard Achieve Remakes Improvemen t Scores for “Quality Remakes” as iden tified for Strategic Planning goals.
Threshold: CO PQ improvemen t is 50% of goal for 2003, Final CO PQ of %= $ savings Quality Remakes improve 5% to 2 .66% by the end of the year.
Maximum :. CO PQ improvemen t is 100% of goal for 2003 Final COPQ of % = $ savings Quality Remakes Improve 15% to 2 .38% by the end of the year.
Target Performance: 7 of 9 projects complete 30% Complete implementation of (9) Product Impro vement Projects Threshold:
6 of 9 projects complete Maximum : 9 of 9 projects complete
Department Manager’s AIP GoalsINDIVIDUAL OBJECTIVES WORKSHEET
Self -Assessment
Supervisory Assessment
NAME: Tom Merker TITLE: Engineering Manager DEPT: Product Engineering (368) SUPERVISOR: Mike Cienian (Name & number)
Wei
ght Objectives & Actions: List 2 -4 objectives a t the beginning of the year. Objectives should be Specific, Measurable, Attainable, Relevant and Trackable
(SMART). Additionally, list specific actions re quired to meet each objective. For each objective, define the standard by which performance will be measured. Measurements should be quantitative (dollars, units, time measurements, service levels, defects etc) and/or qualitative (customer satisfaction, survey results). The n define the minimum level of acceptable performance (thr eshold), the desired level of performance (target), and exceptional per formance (maximum).
Target Pe rformance: Complete 7 of 7 by months indicated. 20% Objective & Actions: Improve Product Quality Implement design changes on the following product quality issues: 1. EZ Up cord tension pulley (April 2003) 2. EZ Up on cordless platform (June 2003) 3. G85 transmission (June 2003) 4. Color coordination project (December 2003) 5. Garden Retreat r eplacement (December 2003) 6. Product Specifications for drapery hardware(September 2003) 7. New cord lock introductions: cellular/pleated (J uly/Sept)
Threshold : Complete 4 of 7 by year -end.
Maximum: Complete 7 of 7 1 -month prior to indicated under target.
Re su lts at year-end: Assess what level of performance h as been achieved , as well as the quality and timeliness of activities completed.
Senior Leader’s
AIP Goals
Manager’s AIP Goals
Team AIP GoalVOA - Attitudes, Skills, Knowledge to ensure Engagement
VOP-Processes are created or improved to ensure Discipline to ImplementVOC/C-Products and Services to ensure we Move Closer to the Consumer
Target BEX survey results for the division move upward with no drop in ratings
by location. Participation level 85% +. (May 02 baseline) “This is a great place to work” question moves 2 pts Survey results specifically supports “ideas and concerns are listened
to.” BECI (BEx Check In- questions to follow) mini survey May 03, Dec 03; next full survey May 2004
33.3% Objectives and Actions: Voice of Associate Goal: Engagem ent Take BEX to the next level by enhancing two -way communication which results in a) increased connectedness with associates and management, b) information flow increases upward, ac ross, and downward in the organization, c) everyone has more knowledge about the business and company direction and business issues, d) associates understand and act upon their role in Quality at the Source.
Threshold Survey participation 70% + “This is a great place to work” question
maintain benchmark score.
Maximum “This is a great place
to work” question increases 4pts
Middleton Facility Balanced Score Card
Crystal Pleat Department Balanced Score Card
Department Manager’s AIP Goals
Supervisor’s AIP Goals
Facility BSC
Dept BSC
Manager’s AIP Goals
Division Team Goal
Supervisor’s AIP Goals
Cascade Flow Associate Satisfaction & Engagement
ROIC
Senior Leader’s AIP Goals Self -Assessment Superviso ry Assessment
NAME: Steve Cable TITLE: Vice President Finance DEPT: Officers – 602 SUPERVISOR: Ron Zabel (Name & number)
Wei
ght
Objectives & Acti ons: List 2-4 objectives at the beginning of the year. Objectives should be Specific, Measurable, Attainable, Relevant and Trackable (SMART). Additionally, list specific actions required to meet each objective. For each objective, define the s tandard by which performance will be measured. Measurements should be quantitative (dollars, units, t ime measurements, service levels, defects etc) and/or qualitative (customer satisfaction, survey results). Then define the minimum level of acceptable performance (threshold), the des ired level of performance (target), and exceptional performance (maximum).
Target Performance: Recurring EBITDA – $ Recurring ROIC – %
50%
Objective & Actions: Company Performance Guide the o rganiza tion towards ach ievement of its
profitab ility measures by do ing the following, as well as other unspecified actions:
We will lead at least two in-depth quarterly reviews to ensure we are p rogressing towards yearend targets
We will ma intain an active keepers list to generate upsides to offset the unfo reseen downsides that will, undoubtedly, arise .
We will continue to review our cost structures and bring insigh ts to the SLT fo r possib le action.
We will enhance the proforma process to assist the organ ization in making sound business decisions.
Threshold: Recurring EBITDA - $ Recurring ROIC - %
Maximum: Recurring EBITDA – $ Recurring ROIC –%
Measures: 30% - Segment recurring EBITDA – consistent with
Divisio nal targets 20% - Recurring RO IC – target w ill be budget
Results at year-end:
Senior Leader’s
AIP Goals
Manager’s AIP Goals
X Self-Assessment
Supervisory Assessment
NAME: John Kluth TITLE: Controller DEPT: Accounting – 612 SUPERVISOR: Steve Cable
Wei
ght
Objectives & Actions: List 2-4 objectives at the beginning of the year. Objectives should be Specific, Measurable, Attainable, Relevant and Trackable (SMART). Additionally, list specific actions required to meet each objective. For each objective, define the standard by which performance will be measured. Measurements should be quantitative (dollars, units, time measurements, service levels, defects etc) and/or qualitative (customer satisfaction, survey results). Then define the minimum level of acceptable performance (threshold), the desired level of performance (target), and exceptional performance (maximum).
Target Performance: Hold monthly internal meetings with key individuals in asset monetization process. These meetings can be separate meetings with each group, or one large meeting with all participants. Achieve 90% of targeted dollar benefit of asset monetization.
5% Objective & Action: Active Projects – Asset Monetization Hold internal asset monetization meetings, and participate in corporate discussions. Correct all vendor terms in Frontier system. Continue to monitor AP performance, and look for ways to stretch terms. Look for other opportunities.
Threshold: Prepare and distribute monthly recap of current status of asset monetization, with expanded analysis of critical areas, such as AP. Highlight areas of opportunity.
Maximum: Achieve 120% of targeted dollar benefit of asset monetization.
Manager’s AIP Goals
On-time Shipments
Cost of Poor Quality
Division BSC
Division Balanced Score Card
Middleton Facility Balanced Score Card
Crystal Pleat Department Balanced Score Card
Department Manager’s AIP Goals
Supervisor’s AIP Goals
Division Team AIP GoalVOA- Attitudes, Skills, Knowledge to ensure Engagement
VOP-Processes are created or improved to ensure Discipline to ImplementVOC/C-Products and Services to ensure we Move Closer to the Consumer
MaximumATO On-time vs original promise date - %On-time stock shipments - %
ThresholdATO On-time vs original promise date - %On-time stock shipments - %
TargetATO On-time vs original promise date - %On-time stock shipments - %
Objectives and Actions:
Take BEx to the next level so that our consumer needs determine our actions and directionACTIONS:ATO on-time vs original promise date – %
On-time stock shipments %Circuit breaker - % on original promise date
33.3%
Sustaining your BSC Communication to all Associates “Keeping Score” Tool for New Associates
Key Learnings Just do it - get started and improve it as you go
We have begun our improvement phase BSC Annual Review and BSC Improvement Team
Key Word: BALANCE Achieve a “Balanced View” of company performance
Table format of BSC has limitations Tend to include mostly lagging indicators Can lead to inappropriate row-to-row comparisons Data are “points in time”
Not able to show trends (where we’ve been/where we’re going) May lead to inappropriate conclusions, for example…
“Point In Time” Example “High-Flyer Airlines” has implemented BSC A key metric is altitude after takeoff
Goal for BSC is 20,000 feet, 10 minutes after takeoff Created a cascading BSC for each plane Review performance for two current flights
Both planes took off 10 minutes ago Plane A is only at 19,000 feet Plane B is at 21,000 feet Plane A gets a “Poor” indicator Plane B gets a “Good” indicator
Now, let’s look at their performance over time…
“Point In Time” Example - continued
Time
Altitude
Plane A
Plane B
Goal 20,000 ft
Which plane would you rather be on???
10 Minutes
Next Steps Create a graph of each key metric showing its
performance over time Appropriate use of SPC techniques provides a range of
normal/typical “System/Process Behavior” Can monitor performance knowing that we will be
reacting to real signals in the metrics, rather than noise Use of “Process Behavior Limits” makes for better
BSC indicators and goals Judging within a range, rather than to a point goal Process limits are predictors of future performance
Better forecasting…better goals
Month/Year
Ind
ivid
ual V
alue
01/0509/0405/0401/0409/0305/0301/0309/0205/0201/02
40000
30000
20000
_X=25991
UCL=31756
LCL=20226
01/02 02/04
Month/Year
Mo
ving
Ran
ge
01/0509/0405/0401/0409/0305/0301/0309/0205/0201/02
15000
10000
5000
0
__MR=2168
UCL=7083
LCL=0
01/02 02/04
1
1
Process Chart for SWF SQI PPMJan 2002 through Feb 2005
SWF SQI PPM - For Last Six Months
5,000
15,000
25,000
35,000
45,000
PPM 25,360 28,203 21,960 24,771 26,042 23,196
SWF Goal 30,301 30,301 30,301 30,301 28,642 28,642
IW Benchmark 18,500 18,500 18,500 18,500 18,500 18,500
09/04 10/04 11/04 12/04 01/05 02/05
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