From balanced scorecard to continuous flow metrics: Evolving performance measurement for Kaizen-driven organizations

The current study deals with the development of performance measurement models for Kaizen-focused manufacturing companies. Although the use of the balanced scorecard (BSC) approach offers a multidimensional system compatible with strategic objectives, the periodic nature of performance measurements does not allow for flexible and immediate response of the company to changes in the operating environment (Kaplan & Norton, 2007; Neely et al., 1995). The study focuses on the incorporation of real-time process metrics into strategic performance management systems. To solve the problem, a new approach to performance measurements referred to as the hybrid performance measurement model, combining the use of the BSC approach and process metrics, was developed. The proposed framework was tested using the Monte Carlo simulation technique. According to simulation results, the application of the hybrid model could lead to a reduction in cycle time and work-in-process (WIP) by about 25 percent and 20 percent, respectively. Thus, the use of the proposed framework might improve organizational flexibility. The contribution of the study lies in developing a novel framework for performance measurement that links strategic management and real-time performance. Future research should further verify the validity of the proposed framework.