Saturday, October 22, 2011

Class 12

Class 12 – SCM (Prof. Suhas Rane)

Balance Score Card

· Given by David Nortan and Robert Kaplan in 1992

· Aim of BSC – To improve organizational efficiency

· BSC converts strategy (vision) into measurable term (objectives are more clear)

· 4 parts – Customer, finance, process, learning

· How to improve – Measure ….. Control ….. Manage …… Improve (Here, measurement is the key)

· Why BSC – A question to be asked …… If a person has the same capital as that of Infosys, can he be the Infosys …. Answer is no ….. Apart from financial strength, he must appear best to customer’s (brand building) – Customer factor ….. he / she must learn continuously to adapt and grow – Learning and growth …… His business process should be people independent and they should work on the core competency - Internal Business Process

· Customer perspective –

§ New customer acquisition

§ Customer Retention

§ Customer Satisfaction

§ Customer Profitability

§ Customer Loyalty

§ Increase purchase

§ Less cost to serve

§ Customer is willing to pay a price premium (Differentiation)

· If BSC is a tree then

§ Fruits – Finance

§ Branch – Customer (& their benefits)

§ Trunk – Business processes

§ Root – Learning and hence, growth

· Drawback of BSC – Parties not included - Suppliers, regulators, community, environment, competitors

Vision – A guideline, should be long lasting, can be changed (core competencies can be ADDED), may or may not be 100% achievable at all times.

Example –

· Walmart’s vision – “To give ordinary folks the felling to buy like extraordinary rich people”.

· Disney’s vision – “To make world happy”.

Mission – A way to achieve vision

SCOR Model

§ Use to improve supply chain efficiency

§ SCOR = BPR + Benchmarking + Best practices / process measurement

§ Supply chain council – Develop standard processes reference model

§ BPR working = As in …… Gap Analysis ….. To be

§ Benchmarking – Find similar companies to compare

§ Best practices analysis – Management practices

§ Parts in SCOR – Plan …. Source …. Make …. Deliver …… Return

§ Who are involved – Supplier 2 ….. Supplier 1 ….. Me …. Customer 1 …. Customer 2

Victor Fung – His article – Dispersed Manufacturing = Country specific advantage + Economy of Scale

5 attributes – To improve on the following

§ Reliability - External

§ Responsiveness – External – Speed with which a supply chain provides products / fulfills demand of its customers

§ Flexibility – External

§ Costs - Internal

§ Asset Management efficiency - Internal

Upstream – Company’s suppliers, supplier’s supplier and process for managing relationship with them.

Downstream – Consists of organization and processes for distributing and delivering products to the final customer.

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