Constructing the integrated strategic performance indicator system for manufacturing companies

Abstract

The performance indicator system based on balanced scorecard (BSC) is the vertical breakdown proceeding from the strategy, it neglects considering the collaborative relationship between the upstream and downstream departments. This paper proposes a design method of company integrated strategic performance indicator system based on BSC and the ‘suppliers-input-process-output-customers’ model (SIPOC). First, the strategy map and BSC are adopted to develop the company-level key performance indicators (KPIs), which are gradually broken down to different departments and forming department KPIs. Then, the common performance indicators (CPIs) are determined based on the SIPOC process analysis; thus, achieving the synergy between different departments. Finally, the departmental performance indicators system can be constructed by composing KPIs and CPIs together. While achieving the strategic vertical breakdown, this method can bring about the synergy between departments in horizontal operation. Also, a case study from a manufacturing company is performed to verify the feasibility of the method.