The Balanced Score Card (BSC) concept was developed by Kaplan and Norton in the early 1990s and many companies have and still use it successfully.
The BSC is a performance management system that maps the business function’s overall mission and strategy to a set of specific objectives and then these objectives are mapped to measurable PI and KPIs and action plans to improve those if they are off target.
The BSC is balanced because it directs the organisation to consider 4 specific perspectives of performance that map to the key aspects of overall business success.
These perspectives are:
- Finance – the investors view.
- Customer – what is valued by end user of the product or service.
- Internal Processes – what does the company do in order achieve the finance and customers objective.
- Learning and Growth – what is the company’s capability to improve the value it is creating through its people.
The BSC create a framework for a companywide performance management system. The concept helps the organisations to select and then focus on improving the critical few measures which have the biggest impact on what really matters i.e. Finance, Customer Satisfaction, Internal Value Creation Processes and Learning & Growth. The BSC is cascaded down to each of the company’s departments and through this creates a clear link between the strategic objectives of the company, the KPIs that measure the strategic success, through to shorter term actions that people take each and every day to meet these KPIs.
The Balanced Scorecard For Maintenance
From a maintenance operations point of view, we need to consider the Reliability Management System . This RMS is summarised below in simplified block diagram.
The Reliability Management System (RMS)
Below is a list of the BSC KPIs and measure for the Reliability Management System
BSC Perspective | Strategic Objective | Measure / KPI |
|---|---|---|
Finance | Increase profit and reduce cost, while simultaneously increasing both return on investment (ROI) and cash |
|
Customer | Increase the availability of critical equipment |
|
Internal Process | Improve the efficiency and effectiveness of maintenance execution in order to support finance and customer objectives |
|
Learning & Growth | Develop and maintain a highly skilled, competent, empowered and motivated maintenance and operations team. |
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The foundation of the BSC is the company’s strategy and vision. The link between the strategy and vision, business perspectives and department performance measures keeps the organisation focused on what matters. Assigning KPI targets adds an emphasis on performance targets. This allows individuals to see a connection between what they do on a day-to-day basis and the overall company success (or failure!).
Do you need to build your own Maintenance Balanced Scorecard KPI Matrix?
Check out my video on building a Maintenance KPI Balanced Scorecard using Power BI Power KPI Matrix visual
