Supply Chain Blog

S&OP (Sails & Operational Planning) – Balanced Scorecard

Posted by Michael Thompson on Wed, Aug 04, 2010

After the grand total of 1 days sailing during the first week – the S&OP KPIs Mistral is back again & we are port bound - moral is flagging.  ‘Customer service levels’ are dropping.  This mind is wandering.

Time for some nautical S&OP stuff again.

Let’s continue on the measurement theme – can’t do S&OP without measurement after all.

We have defined the customer (wife & two children).  We have tried to define customer service – let’s settle on “satisfying the family”, units of measure - a vague, yet to be properly defined, points system.

Now let’s extend our yachting Key Performance Indicators (KPIs). 

A good starting point is the Balanced Scorecard originally developed by Kaplan & Norton.  It is important to keep this simple – the same applies to S&OP KPIs – the KISS principle applies here too.Balanced ScorecardSo here is a stab at our nautical Balanced Scorecard – 1 KPI per quadrant (KISS remember):

  • Finance: Sailing is not cheap.  We could consider the capital costs & associated depreciation involved.  We could also consider maintenance.  However, if we are to maintain focus on the customer & our measure of customer service, it would not be fair to include such financial measures.  It would also probably make me cry or at least wince considerably.  So I will consider an operational cost of ‘Average Daily Spend’.  This will include all costs not directly related to capex & maintenance.
  • Customer Perspective.  Already done – ‘Family Satisfaction’ measured as daily points awarded to Mike.  We could consider other related metrics such as whinges per child per unit of time - a negative measure akin to customer complaints; or number of times certain phrases are uttered, including but not limited to “ I feel sick ...”, “I’m bored ....”, or “It’s too hot ....”.  I have a certain degree of sympathy with the latter – its 34 degrees today & we are all wilting.
  • Processes.  There are numerous processes that keep us going & safe.  There is the ‘Man over Board’ process or, rather, what to do in such an event.  There is anchoring, mooring, putting up the sails, taking down the sails, etc, etc.  There are also numerous domestic chores of course.  Which one should I choose?  Let’s consider again our customer – the family & their satisfaction.  The one thing that makes them happy or drives everyone nuts is leaving harbour or anchorage & the associated activities.  If we leave late, we seem to be in constant catch up mode & the bickering starts.  So let’s have a process measure of ‘time to leave’ & target 10am (yes we are not good at getting going in the morning) – good job there are no tides in the Med.
  • Learning & Growth.  A forward looking measure & often overlooked as part of S&OP.  We have the next generation of sailors on board & it is important to get them trained.  Aidan has been sailing since he was 8 years old (he is 12 now) & seems to have an instinct for it that I will probably never possess.  Koren is keen but not quite as competent.  Wife Margaret is good at cooking.  So let’s set a target to have the crew competent to the point that I am not needed.  So I will use every opportunity to train said crew & let them take over.  I will set a goal to have a watching brief only on at least one passage during the holiday.  There is also a selfish motive here – maybe I can plan for a retirement that includes the kids taking me sailing & doing all the hard work.  So the KPI is ‘Competent Crew’ with the measure of self sufficiency.

That’s it for today. Mike on laptop does not a happy family make.

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In this series:

Oscar Supply Chain Blog

 

Balanced Scorecard image credit: Jinho.Jung

Tagss: Michael Thompson, KPI, S&OP, Forecasting & Demand Planning