Creating supply chain management strategy map with using causal loop diagram and balanced scorecard

Abstract

Nowadays, organizations can use of main capabilities and competencies of other organizations to optimize abilities and increase the effectiveness of each other and elevate level of their customer satisfaction instead of having the best performance in all fields themselves. This participation requires an accurate and systematic management system and directing components’s goals of the chain in a common way as if it’s been neglected cause organization misses it’s competitive advantages and thus gives it’s competitive share to other competitors. Performance management system should facilitate balanced development in organization and play a key role in managing and mitigating conflicts within it. Moreover, it’s expected from Performance management system beside attention to financial measures, be able to reflect the characteristics that make advantages in modern business environment also beyond the financial standards, can consider other issues such human resources development, knowledge creation, innovation, processes development and promotion. More importantly, the performance management system should be linked with the vision and strategies. Balanced scorecard capabilities in covering the cases mentioned above cause it become a popular approach for performance management. This article points out some limitations of balanced scorecard approach and some potential and capacities of system dynamics as well, furthermore propose a new framework that is combining system dynamics causal loop diagram and balanced scorecard as a solution to improve the process of formulating a strategy map. Finally, after drawing the supply chain management causal loop diagram and creating balanced scorecard in related to it, supply chain management strategy map is achieved.

Keywords

• supply chain management
• balance score card (bsc)
• system dynamics
• causal loop diagram
• strategy map