FOUR PERSPECTIVE AND

PERFORMANCE MEASURE
Testable Strategy
Financial Perspective
 Financial Perspective
Revenue Growth
increase the number of new products,
create new applications for existing products, develop
new customers and markets, and adopt a new pricing
strategy.

Cost Reduction
Reductions in the cost per unit of product, per customer,
or per distribution channel are examples of cost reduction
objectives.

Asset Utiization

Financial measures such as return on investment and

economic value added are used.
Financial Perspective
Customer
Perspective
 Customer Perspective
Core Objective and Measures
Core objectives and measures are those that are common
across all organizations. There are 5 key core
objectives:
increase market share, increase customer retention,
increase customer acquisition,
increase customer satisfaction, and increase customer
profitability.

Customer Value
is the difference between realization and sacrifice,
where realization is what the customer receives and
sacrifice is what is given up.
Realization = product functionality (features), product
quality, reliability of delivery, delivery response time,
image, and reputation.
Sacrifice = product price, time to learn to use the product,
operating cost, maintenance cost, and disposal cost
Customer Perspective
Process Perspective
 Process Perspective
Innovation Process :
Objective and Measures
increase the number of new products, increase
percentage of revenue from proprietary products, and
decrease the time to develop
new products.

Operation Process :
Objective and Measures
First time through is a common quality metric used to
measure quality in manufacturing cells and value streams :
FTT = (Total units processed/Rejects and reworks)/Total
units processed

Cycle Time and Velocity

Cycle Time = is the length of time it takes to produce a
unit of output from the time materials are received until
the good is delivered to finished goods inventory.
Velocity = the number of units of out-
put that can be produced in a given period of time
 Process Perspective
Manufacturing Cycle
Efficiency
MCE = Processing time/(Processing time +Move time +
Inspection time + waiting time)
The actual cycle time is 6.0 minutes, and the theoretical
cycle time is 5.0 minutes. MCE is computed as follows:
MCE = 5.0/6.0 = 0,83
Takt Time and Day-by-the
Hour-report
the rate at which customers demand product. For example,
customer demand may require that a product be produced
every 10 minutes. Thus, the required cycle time is five
minutes if the firm (or value stream) is to produce on
demand and minimize waste.
Postsales Service
Process : Objectives and
Measures
Increasing quality, increasing efficiency, and decreasing
process time
Process Perspective
Infrastructure
Perspective
 Learning & Growth Perspective
Employee Capabilities
Indicator : hours of training and strategic job coverage
ratios (percentage of critical job requirements filled)

Motivation, Empowerment
and Aligment
Employees must not only have the necessary skills, but
they must also have the freedom, motivation, and
initiative to use those skills effectively.

Information System
Capabilities
providing more accurate and timely information to
employees so that they can improve processes and
effectively execute new processes.
Learning & Growth Perspective
Thankyou!!!