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Cognos basics

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Cognos basics
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  • FIVE SIMPLE STEPS TO

    BUILDING AN EFFECTIVE

    SCORECARD

    Rapid scorecarding formanufacturing

  • While every attempt has been made to ensure that the information in this document is accurate and complete, some typographical errorsor technical inaccuracies may exist. Cognos does not accept responsibility for any kind of loss resulting from the use of information con-tained in this document.

    This page shows the publication date. The information contained in this document is subject to change without notice.

    This text contains proprietary information, which is protected by copyright. All rights are reserved. No part of this document may bephotocopied, reproduced, stored in a retrieval system, transmitted in any form or by any means, or translated into another languagewithout the prior written consent of Cognos.

    The incorporation of the product attributes discussed in these materials into any release or upgrade of any Cognos software productas well as the timing of any such release or upgradeis at the sole discretion of Cognos.

    U.S. Government Restricted Rights. The accompanying materials are provided with Restricted Rights. Use, duplication for disclosure bythe Government is subject to the restrictions in subparagraph (c)(1)(ii) of the Rights in Technical Data and Computer Software clause atDFARS 252.227-7013, or subparagraphs (c) (1) and (2) of the Commercial Computer Software Restricted Rights at 48CFR52.227-19,as applicable. The Contractor is Cognos, an IBM company, 67 South Bedford Street, Burlington, MA 01803-5164.

    This edition published September 2008Copyright 1989-2008 Cognos, an IBM company.

  • 3Rapid scorecarding for manufacturing

    Table of contents

    Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

    Scorecarding 101 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

    Five Simple Steps to Fast, Effective Scorecards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

    Step 1: Build the Strategic Linkages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

    Step 2: Determine Indicators of Success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

    Step 3: Identify Processes, Projects and Measures . . . . . . . . . . . . . . . . . . . . . . . . 9

    Step 4: Build Scorecard Processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

    Step 5: Launch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

    Want an Even Faster Route? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

    The End Result. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

    A Profile in Performance: Scorecarding at Mueller . . . . . . . . . . . . . . . . . . . . . . 11

    Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

    The Right Technology and Solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

    The Fastest Methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

    Performance Management Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

    Request a call . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

    About Cognos, an IBM company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

  • 4Introduction

    For manufacturers worldwide, todays business climate iscomplex and competitive. Manufacturing companies areunder intense pressure to improve customer service, bringinnovative new products to market and increase businessspeed and agility, while being mindful of regulatory andlegal compliance.

    From the executive suite to the shop floor, managersjuggle a variety of priorities, and must assign a value toeach one based on their relative importance and theinteraction among the processes that drive them. Thenthey can integrate these elements into a strategic plan andcommunicate the plan throughout the rest of theorganization.

    This is the core value of scorecards.

    Manufacturing companies need forward-looking orleading metrics that are tied to their value drivers.Leading metrics in key areas such as productivity,profitability, customer satisfaction, compliance and safetycan alert companies to problems before they adverselyaffect the bottom line. For example, metrics such as partsshortages or order delays can point to an eventual drop incustomer satisfaction, declining revenue or a loss ofmarket share. Understanding these cause-and-effectrelationships, coupled with sound supply and demandplanning, allows for better synchronization, reduced costsand better performance.

    While defining these metrics is one thing, bringing thedata together to support them can pose an even biggerchallenge. Companies usually rely on a raft ofperformance data drawn from many different systems:enterprise resource planning (ERP), spreadsheets, datamarts, presentation software, legacy data and othersources. Each system provides important informationabout a particular aspect of the companys performance,but each collects, defines and displays the information in adifferent way.

    Scorecarding with IBM Cognos 8 BI can helporganizations consolidate performance data fromdisparate sources into a coherent system that people cantrust. They can create their own truth scorecards that helpthem firmly pinpoint opportunities and roadblocks in keyfunctional areas.

    Scorecarding helps business users, from the shop floor tothe top floor, quickly find answers to common questions,regardless of the data source, such as:

    How has this metric performed in the past?

    Who is involved in solving this problem? Havecorrective actions been put in place?

    What are the factors driving the performance?

    What other processes or metrics are affected?

    What are the details behind this metric? How is itcalculated?

    Scorecarding with IBM Cognos 8 BI allows you to linkdecisions made by individual employees to corporatestrategies and goals. It provides users at every level of thebusiness with access to reports, analysis and alerts,helping them understand their metrics and the factors thatdrive their performance. It can scale easily from tracking afew individuals to specific operating subsidiaries, andfrom discrete geographic regions to the entire enterprise. Itcan manage performance using methodologies likeBalanced Scorecard, Six Sigma and Total QualityManagement.

    And while many scorecard initiatives suffer from lack ofadoption by middle managers, IBM Cognos 8 BIscorecards provide the kind of drill-down capability andrelevant tactical information that middle managers findhighly usefulimproving the chances for enterprise-widesuccess.

    Not everything that can be counted counts, and not everything that counts can be counted.

    ~Albert Einstein

  • 5Scorecarding 101

    Scorecarding is a proven approach for monitoring,measuring and managing performance at a tactical orstrategic level for an organization, a team, or individualemployees. At the tactical level, employees and managersuse scorecards to monitor performance against targets fordiscrete, specific projects. At the strategic level, scorecardscan be part of a corporate-wide performance managementsystem that executives use to map the overall corporatestrategy and communicate it throughout the organization.

    A scorecard is a list of key performance indicators (KPIs),or metrics, that present current performance data for abusiness process or strategic goal against target values.Most metrics feature a corresponding color scheme andtrend arrow that indicates whether that performance ison, above or below target and whether performance istrending up or down.

    Most scorecards, such as those used in Balanced Scorecardimplementations, use a mix of financial and nonfinancialinformation, leading and lagging (financial) indicators andcorresponding strategy maps. Other may be industry-specific, such as supply chain performance management.According to Ventana Research, The best way tomeasure process effectiveness is to organize your supplychain BI measures according to a standard performancemeasurement reference model. Reference models integratethe well-known concepts of benchmarking and processmeasurement.2

    The best-known reference model for managing supplychain performance is the Supply Chain OperationsReference (SCOR) model, created by the not-for-profitSupply Chain Council (www.supply-chain.org). Thismodel contains standard descriptions of managementprocesses and characterizes management practices andstandard metrics that benchmark best-in-classperformance.

    SCOR is based on five core management processes:

    1. Plan. Processes that balance aggregate demand andsupply to develop a course of action which bestmeets sourcing, production and deliveryrequirements.

    2. Source. Processes that procure goods and services tomeet planned or actual demand.

    3. Make. Processes that transform product to afinished state to meet planned or actual demand.

    4. Deliver. Processes that provide finished goods andservices to meet planned or actual demand, typicallyincluding order management, transportationmanagement and distribution management.

    5. Return. Processes associated with returning orreceiving returned products for any reason, whichextends into post-delivery customer support.

    R

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