Designing balanced scorecard for multi echelon repair inventory systems

Purpose – A number of approaches have been suggested in the literature for maintenance performance measurement, including use of the balanced scorecard (BSC). However, its application towards assessing maintenance contribution to business objectives is limited. Currently, a framework integrating maintenance activities in a supply chain environment is lacking in the literature. The purpose of this paper is to develop a maintenance performance measurement framework using BSC for multi echelon repair inventory systems (MERIS) comprising of modular electronic equipment. The paper also suggests a large number of performance measures/indicators (PMs/PIs) pertaining to both maintenance and supply chain components including a few BSC implementation issues for such types of supply chains. Design/methodology/approach – The paper analyses a base model of a large maintenance organization and after carrying out SWOT analysis, identifies strategic themes/objectives for performance measurement. Performance measures for various objectives are identified for MERIS and implementation strategy including cascading of BSC is suggested. The developed performance measurement model is also validated using an action research (AR) based approach. Findings – A performance measurement system (PMS) for MERIS using BSC approach has been developed and an implementation strategy suggested. AR methodology is used for developing BSC for an organization using the selected performance measures. The importance of cause‐effect relationships between various performance objectives and measures is also established. Research limitations/implications – Quantification of each of the developed PMs/PIs and establishing an effective information system for MERIS are the limitations of the present work and may be taken up for more research. Practical implications – The paper will be useful for practitioners in the field of MERIS of electronic repairables wherein relevant PMs/PIs can be selected for implementation as per the requirement of the application. Originality/value – The paper is of value by being original, as no work towards performance measurement of MERIS using BSC concept (as applicable for non‐profit organizations like military, government, NGOs etc) is reported in literature so far. The paper is relevant in this context and its contribution lies in the area of performance measurement.