Aligning Supply Chain Incentives Using the Balanced Scorecard

In recent years, much has been written about the merits of collaborative supply chain partnerships. However, this article contends that companies will fail to reap the potential rewards of collaborating with their supply chain partners unless they redefine how they measure and reward employee performance. The Balanced Scorecard is a performance measurement tool that can be used to help align the incentives of employees across organizations within a supply chain. This article explains the inter-relationship between supply chain management and the Balanced Scorecard. It also uses the Dell Computer Corporation supply chain to illustrate how the Balanced Scorecard can be used to motivate collaborative supply chain behavior.