On-time delivery is customer OR process — say which and why

The chain, with Tamarack’s numbers on the arrows

A scorecard is a hypothesis about cause and effect: if we improve the drivers, then the results follow. Tamarack’s reads like this. Training hours per employee rise (learning and growth) → the warehouse and store staff pick and pack better, so order pick accuracy rises (internal process) → complaints per 1,000 orders fall and the repeat-purchase rate rises (customer) → revenue and gross margin rise (financial). The environmental perspective feeds the same chain from the side: route optimisation cuts the fleet’s scope 1 emissions per $1,000 of revenue and cuts delivery time, which is an internal-process gain the customer feels.

The direction is the point. The chain runs from learning and growth up to financial, never the reverse — you cannot “improve ROA” directly, only through the drivers below it. When a board reviews a scorecard with a red financial KPI and green drivers, the hypothesis is wrong, not the drivers: either the targets are too low or the chain is missing a link.

Which perspective? Twelve KPIs

KPI                                   Perspective          Framing
Revenue growth %                      financial            result
Gross margin %                        financial            result
Market share                          customer             how buyers choose us
Net promoter score                    customer             the buyer’s view
Customer complaints per 1,000 orders  customer             the buyer’s experience
Order cycle time (order → ship)       internal process     the operation’s speed
Defect rate on repairs                internal process     the operation’s quality
Capacity utilisation, warehouse       internal process     the operation’s efficiency
Employee turnover %                   learning and growth  people capability
Training hours per employee           learning and growth  people capability
Water intensity per store             environmental        resource use
Scope 1 emissions per $1,000 revenue  environmental        emissions

Most of these are unambiguous. Market share is customer, not process — it measures how buyers choose. Cycle time is process — it measures the operation. Employee turnover is learning and growth, not process: it is about the people who run the process, not the process itself. Water intensity is environmental even though saving water saves money; the money is a consequence, the measure is a resource intensity.

The ambiguous ones: state the framing

Some KPIs sit on a boundary, and the exam knows it. On-time delivery is a customer measure when framed as the customer’s experience (“did my order arrive when promised?”) and an internal-process measure when framed as the operation that produces it (“did the warehouse ship on schedule?”). Both are defensible; an unframed answer is not. The rule for any KPI that could go two ways: state the framing, then classify — “on-time delivery, framed as the customer’s experience, is a customer KPI.” A marker gives the mark for the framing, not for guessing the key.

The same holds for repair turnaround: process if it measures the repair desk’s speed, customer if it measures the wait the customer sees. A KPI can belong to more than one perspective across framings; it belongs to exactly one within a stated framing.

Building one from scratch: Kettle Creek Foods

Kettle Creek Foods Inc. is a private producer supplying packaged foods to grocery chains. Its new owner wants a scorecard, and the exam-style answer is a table of five rows — perspective, goal, KPI, target — followed by one explained link. A food producer’s drivers are different from a retailer’s: the process perspective is about spoilage, line changeover time and on-spec batches; the customer is the grocer (on-time-in-full delivery, listings retained); learning and growth is food-safety certification hours; environmental is energy per tonne produced or packaging waste per tonne. The KPI must be measurable — “quality” is a goal, “batches on spec %” is a KPI — and the target must be a number or a direction. The last thing a good answer says is what the owner would do with a red KPI, because a scorecard nobody acts on is a poster.