SuCess Toolbox - Logistics Balanced Scorecard

In terms of business performance measurement most companies focus on financial KPIs like Return on Equity, Economic Value Added or share price, just to mention a few of them. Mostly the results of these figures are even confusing due to a missing linkage to the company's strategy. In consequence, a huge amount of big companies lead their business by concentrating on less than ten main KPIs. Nevertheless lower management levels as well as single departments need to define own, more process oriented performance indicators to realize continuous improvements and support the company's strategic objectives.

Logistics Balanced Scorecard

In the industry sector logistics or supply chain management hasn't yet attracted high management attention. Although some businesses like Amazon recognized logistics as value adding core process, many companies underestimate the high potential of efficient and sustainable logistic networks. Main problem is the missing involvement of logistic processes when strategic objectives of the company are defined. This step can be identified as a basic requirement before setting up relevant ratios and targets. The fulfilment of these targets is usually controlled by performance indicators, representing the internal and external perspective of the company. As a well-known controlling tool in business administration the balanced scorecard can be mentioned.

A logistics balanced scorecard provides companies a helpful management tool to control logistic activities. Usually four perspectives in a balanced scorecard are chosen to guarantee a holistic view on the company's situation. As a common standard the perspectives Fincance, Customer, Internal processes and Learning & Growth are descirbed in literature. For each perspective targets need to be defined. In a logistics point of view profitability, structural, productivity and quality oriented ratios are common objectives. The development of a logistics balanced scorecard will follow soon...