Performance analysis methods

[Jeremie]

Hi,

Which performance analysis methods and tools do you recommend, in particular for a manufacturing business? I’ve heard about Activity-Based Costing, Balanced Scorecards, etc…

Thanks.

Discussion

[Benoit]

Hi,

Activity Based Costing works in theory but at my level I always struggled to implement it. Also happy to get feedback on this one. For what types of companies is it fit?

Balanced Scorecard I believe is closer to what I have seen working. In manufacturing environments. KPIs that I have been tracking for manufacturing companies are:

Internal – days of inventory based on prospective sales, quality inspection issues

Customer – backlog of orders, customer returns, customer satisfaction (eg. online star ratings, CS tickets), market share

Shareholder: Cash, Working Capital, Gross Margin, Net Profit

Found this article, a bit dated but clear and detailled: https://hbr.org/1992/01/the-balanced-scorecard-measures-that-drive-performance-2

Cheers.