Strategy Maps as Improvement Paths of Enterprises

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International Journal of Production Research, Vol. 46, No. 23, 1 December 2008, 6627–6647

Strategy maps as improvement paths of enterprises
M. BARAD*y and S. DRORz
yDepartment of Industrial Engineering, Tel Aviv University, Ramat Aviv, Tel Aviv, Israel zDept. of Industrial Engineering and Management, Ort Braude College, Karmiel, Israel

(Revision received December 2007) To locate and prioritize the improvement needs of an enterprise, a strategy map merging managerial principles of the BSC with quality principles stemming from the Malcolm Baldridge National Quality Award and the European Foundation for Quality Management is proposed. It comprises four hierarchical levels: business objectives, competitive priorities, core processes and components of the organizational profile. The implementation methodology for supporting its application in an individual enterprise makes use of quality function deployment (QFD), a quality design tool. A strategy map here represents a bottom up cause and effect potential improvement path of an investigated enterprise, starting from an improvement of its organizational profile towards an improved realization of its business objectives, thus providing a global perspective on the important linkages between its weakest components at different hierarchical levels. Analysis of two test cases for implementing strategy maps revealed strategy maps that differed from one company to another and discontinuities in some of the maps. We found processes, considered as core processes by interviewees that did not support any competitive priority and a competitive priority, strongly recommended by interviewees, that was not supported by any core process. Such findings call attention to the complex cause-and-effect relationships influencing the enterprise system behaviour, to the lack of management understanding of this behaviour and eventually they add motivation and support to the continuation of our work here. Keywords: Strategy map; Total quality strategies; Quality function deployment

1. Introduction Nowadays, a key word in any organization is ‘improvement’. Improvement methodologies involve products whose quality has to be improved and whose delivery time has to be shortened, processes whose variances and lead time have to be reduced, infrastructure components whose efficiency and capabilities have to be upgraded, waste to be eliminated or flexibility to be increased. A multitude of improvement methods and improvement frameworks have been developed and among them Six Sigma (see, for example, Hill and Kerney 2003, Anand et al. 2007), Lean Manufacturing, the Theory of Constraints (see, for example, Dettmer 1997) and Agile Manufacturing (see, for example, DeVor et al. 1997). Typically, each of them highlights improvement of selected features for achieving the goals *Corresponding author. Email: barad@eng.tau.ac.il

International Journal of Production Research ISSN 0020–7543 print/ISSN 1366–588X online ß 2008 Taylor & Francis http://www.tandf.co.uk/journals DOI: 10.1080/00207540802230405

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M. Barad and S. Dror

they emphasize. The Six Sigma improvement method is problem focused and its main objective is reducing variance. The Lean Manufacturing method is flow oriented and its main objective is removing waste. Naturally, the theory of constraints focuses on the system constraints and an improvement cycle starts by identifying a new constraint (Nave 2002). Other works presented different combinations of the above methods. Bossert (2003) emphasized the advantages stemming from a combination of Lean Manufacturing and Six Sigma. Kovach et al. (2005) developed the House of Competitiveness. This work combined Six Sigma, Lean Manufacturing, Agile Manufacturing and Design for Six Sigma to improve, quality, cost, responsiveness and other features of an organization. A multi-criteria decision-making approach for connecting various stages of a strategic structure, is the analytic hierarchy process...
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