After studying this chapter, you should be able to meet the following learning objectives (LO).

  1. Identify the desirable characteristics of performance measures. (Unit 11.1)
  2. Explain how to use a balanced scorecard to improve an organization's performance. (Unit 11.2)
  3. Explain how to use benchmarking to improve an organization's performance. (Unit 11.3)
  4. Calculate delivery cycle time, manufacturing cycle time, and manufacturing cycle efficiency. (Appendix)


The Pitch


“It's been an interesting year,” observed George Douglas, CEO of C&C Sports. “We've learned more about jacket production and theactivities it consumes. We've got a plan for evaluating our batch processes to eliminate non-value-added activities. And we're going to add a new product line this year. I don't doubt that these changes will improve our profitability; however, we're just reacting to events that have gone badly. We need to identify proactive measures, so we won't find ourselves in the same predicament next year.”

Chad Davis, vice president of operations, agreed. “We have a habit of waiting until we see an income statement or a bank statement to decide whether or not things are going well. That's too late to prevent anything bad from happening. If I see new ...

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