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MANAGEMENT AND ACCOUNTING WEB |
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Clinton, B. D. and H. Ko-cheng. 1997. JIT and the Balanced Scorecard: Linking manufacturing control to management control. Management Accounting (September): 18-24. Summary by Ken Wombacher |
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Integrating the Balanced Scorecard in the JIT system. |
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Step 1: Identify Manufacturing Control Activities. |
Management first formulates a strategic plan. Next the business is subdivided into the various activities that support the plan. |
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Step 2: Map these activities to their related drivers (metrics). |
Drivers (metrics) are identified which are used to measure and manage the activity. |
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Step 3: Time sequence each measure in its linkages to other measures. |
Identify if the activity is short term, intermediate or long-term. This helps to insure a clear purpose for the activity. |
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Step 4: Link the metrics together so that they are both reinforcing and supportive of strategic objectives. |
The value of specific activities can be assessed by linking them all the way from their short-term drivers through their intermediate indicators and ultimately to their long-term validation (see figure 1). |
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Step 5: Establish a
Value-Chain linkage to facilitate an overall management assessment of
value creation across functional categories. |
Analysis of value chain allows managers to identify the phase where the primary drivers of results occur. |
Figure 1: Time linkages
| Short-term Drivers | Intermediate Indicators | Long-Term Validator |
Number of employee complaints  |
Employee Satisfaction |
Employee Turnover |
| Number of customer complaints |
Customer Satisfaction |
Market Share |
| Percent of activities non-value added |
Process Quality |
Cash flow ROI |
Figure 2: Value Chain linkages
| Development/Design | Production | Distribution | Service |
| # of new products |
Process reliability |
% Ontime delivery |
# of warranty claims |
| Balanced Scorecard Main Page | JIT Main Page |
