Chapter 3 Construct Strategy Map & Balanced Scorecard
4.3 Target Company Balanced Scorecard Development & System Dynamic Model
4.3.1 Balanced Scorecard of the Target Company
Perspective Target Actions Indicators
Raise Gross Margin Rate Increase ROI
Steady Fixed Operating income Actively Obtain the Variable Operating income
Operating Incomes Predictors Shareholder ROI Rate
Return On Assets Rate Return on capital
Number of new strategies Financial
Cost Down Regulate Operating Cost Number of the customer complaints Reacting speeds of customer
complaint Customer Customer's
Satisfaction
CRM Customer's Demand Fulfillness Total Profit per customer
Total Cost per customer Reinforce QC ISO Standard Documents QA
Set up & Execute SOP
Workflow Standardization
Operation ProcedureStandardization
Maintain & Promote Readiness Riase Reliability
Decrease Maintainability On Job
Training
Basic Skills Training The number of R & D personnel Proportion of Personnel's OJB Improving rate of engineering level Human
Resources
Man Power Management
R & D personnel's satisfaction Employee Turnover Rate Personnel Deployment Rate Group Study With Other Department Group Study With Other Company Table 4.5 Balanced Scorecard of the Target Company
Source: From this research
4.3.2 Intuitive Strategy Map of the Target Company
Figure 4.3 Intuitive Strategy Map of the Target Company Source: From this research
Finanacial
Customer
Internal Process
Learning & Growth
Customer Satisfaction
Maintainability
Operation Efficiency Quality Assurance
Training & Education
Equipment Utilization Readiness
Profit Rate
Employee Capability Reliability
Cost Down
Mission Accomplish Fixed Income
Shareholders’ Value
4.3.3 Intuitive System Dynamics Model of the Target Company / Wire Flow
Figure 4.4 Intuitive System Dynamics Model of the Target Company / Wire Flow Source: From this research
Customer
4.3.4 Intuitive System Dynamics Model of the Target Company/Variables Equation
(01) L Customer Satisfaction= INTEG (Satisfaction Var, 0.4) Units: Dmnl
【Customer Satisfaction is a Level Variable that is the integral of Satisfaction Variation with initial value of 0.4.】
(02) R Satisfaction Var=Readiness2Satisfaction* ((TargetCustomerSatisfaction -Customer Satisfaction)/Time2EffectSatisfaction)
Units: Dmnl
【Satisfaction Var is a Rate Variable that adjusts the difference between TargetCustomerSatisfaction and Customer Satisfaction.】
(03) N TargetCustomerSatisfaction=0.85 Units: Dmnl
【Set the Target Customer Satisfaction to be 0.85】
(04) A Time2EffectSatisfaction=3 Units: Month
【The duration of taking the Target Customer Satisfaction into effect】
(05)A Readiness2Satisfaction = WITH LOOKUP (Readiness, ([(0,0)-(10,1)], (0.4,0.4),(0.5,0.45),(0.51,0.46),(0.52,0.47),(0.53,0.48)
,(0.54,0.5),(0.55,0.55),(0.56,0.6),(0.57,0.65),(0.58,0.7),(0.59,0.75),(0.6 ,0.8),(0.61,0.85),(0.62,0.9),(0.63,0.95),(0.64,0.96),(0.65,0.97),(0.66,0.98),(0.
67,0.99),(0.68,1),(0.69,1),(0.7,1),(0.71,1),(0.72,1) )) Units: Dmnl
【A Multiplier for transforming Readiness to Customer Satisfaction】
(06) L Readiness= INTEG (Readiness Var,0.4) Units: Dmnl
【Readiness is a Level Variable that is the integral of Readiness Variation with initial value of 0.4.】
(07)R Readiness Var=Reliability2Readiness *(TargetReainess-Readiness)
/Time2EffectReadiness Units: Dmnl
【Readiness Var is a Rate Variable that adjusts the difference between Target Readiness and Readiness.】
(08) A TargetReadiness=0.64 Units: Dmnl
【Set the Target Readiness to be 0.64】
(09) A Time2EffectReadiness=3 Units: Month
【The duration of taking the Target Readiness into effect】
(10)A Reliability2Readiness = WITH LOOKUP ( Reliability,
([(0.8,0)-(10,0.8)],(0.85,0.4),(0.9,0.45),(1,0.48),(1.1,0.5),(1.2,0.55), (1.3,0.58),(1.4,0.6),(1.5,0.62) ))
Units: Dmnl
【A Multiplier for transforming Reliability to Readiness】
(11)L Reliability= INTEG (Reliability Var, 0) Units: Dmnl
【Reliability is a Level Variable that is the integral of Reliability Var with initial value of 0.】
(12)R Reliability Variability=Efficiency2Reliability*Usage
Rate*((TargetReliability-Reliability)/Time2EffectReliability) Units: Dmnl
【Reliability Variability is a Rate Variable that adjusts the difference between Target Reliability and Reliability.】
(13)A Time2EffectReliability= 5 Units: Dmnl
【The duration of taking the Target Reliability into effect】
(14)A TargetReliability=1.5 Units: Dmnl
【Set the Target Reliability to be 0.64】
(15)A Efficiency2Reliability = WITH LOOKUP (Efficiency,
([(0,0)-(1,2)],(0.3,0.8),(0.4,0.9),(0.5,1),(0.6,1.1),(0.7,1.2),(0.8,1.3) ,(0.9,1.4),(1,1.5) ))
Units: Dmnl
【A Multiplier for transforming Efficiency to Reliability】
(16)A Efficiency=(InitialEfficiency+ActionEffectOnEmployeeEfficiency)-L2E Units: Dmnl
【Efficiency is equal to Initial Efficiency +ActionEffectOnEmployeeEfficiency -(Loading to Efficiency)】
(17)A InitialEfficiency=0.5 Units: Dmnl
【Set the Initial Efficiency to be 0.5】
(18)A ActionEffectOnEmployeeEfficiency=DELAY1I(Strategy Target Action, DelayOnAction , 0 )
Units: Dmnl
【The effect of taking the Action of Improving Employee Efficiency】
(19)A DelayOnAction=2 Units: Month
【The duration of taking the Action of Improving Employee Efficiency into effect】
(20)A Strategy Target Action=STEP( 0.1 , 3 ) Units: Dmnl
【A Step Function that take the Strategy Target Action into effect from the third month and raise to 0.1】
(21) A Efficiency2Maintenance = WITH LOOKUP (Efficiency,
([(0,0)-(2,10)],(0.1,1.9),(0.2,1.8),(0.3,1.7),(0.4,1.6),(0.5,1.5),(0.6,1.4 ),(0.7,1.3),(0.8,1.2),(0.9,1.1),(1,1) ))
Units: Dmnl
【A Multiplier for transforming Efficiency to Maintenance】
(22) A Time2EffectMaintainability= 4 Units: Month
【The duration of taking the Target Maintainability into effect】
(23) L Maintainability= INTEG (MaintainabilityVar,15) Units: Dmnl
【Maintainability is a Level Variable that is the integral of MaintainabilityVar with initial value of 15】
(24)R MaintainabilityVar=
(Efficiency2Maintenance*TargetMaintainability-Maintainability)/Time2EffectM aintainability)
Units: Dmnl
【MaintainabilityVar is a Rate Variable that adjusts the difference between Target Maintainability and Maintainability.】
(25) A TargetMaintainability= 8 Units: Dmnl
【Set the TargetMaintainability to be 8】
(26)A M2L = WITH LOOKUP
(Maintainability,([(0,0)-(20,10)],(7,1),(8,1.1),(9,1.2),(10,1.25),(11,1.3),(12,1.35 ),(13,1.4),(14,1.45),(15,1.5) ))
Units: Dmnl
【A Multiplier for transforming Maintainability to Loading】
(27)A Loading=M2L*Capacity*UsageRate2Loading Units: Hr/Month
【Loading is equal to (Maintainability to Loading) * Capacity * Usage Rate to Loading】
(28)A Capacity="No.OfEmployee"*8*22 Units: Hr/Month
【Set the Capacity to be No.OfEmployee*8(Hours/Day)*22(Days/Month)】
(29)A "No.OfEmployee"=150 Units: People
【Set the No. of Employee to be 150 People】
(30)L OperatingCost= INTEG (CostVar,1e+006) Units: $
【Operating Cost is a Level Variable that is the integral of CostVar with initial value of NT$1000000】
(31)R CostVar=FixedCost+((Loading-Capacity)*70) Units: $/Month
【CostVar is a Rate Variable that is equal to Fixed Cost + (Loading-Capacity)
* 70(Labor Rate: NT$/Hour).】
(32)A FixedCost=1.75e+007 Units: $/Month
【Set the Fixed Cost to be NT$17500000】
(33)L OperatingIncome= INTEG (IncomeVar,0) Units: $
【Operating Income is a Level Variable that is the integral of IncomeVar with initial value of 0】
(34)R IncomeVar=IF THEN ELSE(Readiness>0.54, FixedIncome , FixedIncome-((0.54-Readiness)*FixedIncome))
Units: $/Month
【IncomeVar is a Rate Variable that is a condition: If Readiness>0.54 then get the Fixed Income. But if Readiness<0.54, then the income is equal to Fixed Income-((0.54-Readiness)*Fixed Income)】
(35)N FixedIncome=1.87e+007 Units: $/Month
【Set the Fixed Income to be NT$18700000】
(36)L Operating Profit= INTEG (ProfitVar, 0)
Units: $
【Operating Profit is a Level Variable that is the integral of ProfitVar with initial value of 0】
(37)R ProfitVar=OperatingIncome-OperatingCost Units: $/Month.
【ProfitVar is a Rate Variable that is equal to Operating Income- Operating Cost】
4.3.5 Intuitive System Dynamics Model of the Target Company / Outcome Plots
Customer Satisfaction : Current Dmnl
Efficiency : Current Dmnl
Loading : Current Hr/Month
Maintainability : Current Dmnl
Operating Profit : Current $
Readiness : Current Dmnl
Figure 4.5 Outcome Plot of 6 Indices for Intuitive Model of the Target Company
0.8 Dmnl
Figure 4.6 Outcome Plot of 3 Indices for Intuitive Model of the Target Company
4.4 System Dynamics Model of the Target Company with Feedback