Balanced Scorecard Examples

A example of balanced scorecard leveraging near real time decision making, enabled by information technology, is the semi-conductor division of Agilent which has to manage its sprawling supply chain across the world. The frequent changes in its design create problems for the management of its inventory. With the use of the - five score card - feature of its business intelligence software, Agilent is able to keep track in real time of the performance parameters related to its inventory. In addition, the company uses the MRP simulation options to decide on how it is going to manage its inventory based on alternative scenarios. The business intelligence software also allowed it to disaggregate the bill-of-materials information for standard and customized inputs. This information allowed it to contract out the standardized materials while retaining the customized materials for in-house production.

A much more significant advantage of real time reporting is the ability to react to events as they happen and to respond to every turn in the consumer mood. Another balanced scorecard example is Wal-Mart which decided to use its point-of-sale performance data in order to make its inventory decisions. Typically, retail stores have to cope with unexpected changes in the mood of the consumer, demand patterns are affected by the location of their stores or the delivery patterns and currency fluctuations on the supply end change the profitability equation for the chain. In the past, retail chains had no option but to react after the fact. Increasingly, however, they see an advantage in anticipating consumer behavior based on the patterns they observe in their point-of-sale data. Wal-mart collects its data from 2,500 of its stores and looks for transient movements in the demand and supply situation and maximizes gains by price variation. The speed of response ensures that competitors are unable to match the price offers.

Companies are also able to differentiate their services based on their ability to process data in real time. Another balanced scorecard example is the ability of Owens Corning's to change the order size based on the customer data it receives in real time. Going beyond a pre-determined half truckload size delivery, it changed over to flexible order fulfillment system.

The implementation of the balanced score card requires a great deal of in-depth investigation of qualitative variables such as especially employee and customer satisfaction which has to be done repeatedly. In the past, companies were reluctant to collect such data due to its high cost as well as susceptibility to error. This has begun to change as result of a variety of on-line survey tools which are closely linked with business intelligence tools for convenient processing of the data that is generated. The data from these surveys can be used to find new sources of competitive advantage to cope with an untoward sequence of events.