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The Balanced Scorecard

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julia escobar

on 14 April 2014

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Transcript of The Balanced Scorecard

Customer Perspective
Supermarkets are our main customers
We would not want to sacrifice quality by cutting corners
Customer Satisfaction
Delivery of quality packaged, fresh products on time

Internal Business Perspective
It is crucial that we increase profitability by maximizing efficiency and use of assets
Increase number of of new products
Increase process quality

Innovation and Learning Perspective
Areas of focus:
Reinforce focus on product release R&D
Staff motivation
Reduce cost through reinforced focus on R&D
Increase productivity and employee satisfaction through staff motivation

Use the Balanced Scorecard Method in order to align short term financial perspectives with long term strategic perspectives
Main Financial Objectives Perspective
Revenue growth
Internal Business
Customer Perspective
Cost reduction
Past performance
Innovation & Learning
Asset utilization
Internal Business
Innovation & Learning

• Continued focus on product release R&D can lead to fewer losses through more comprehensive preparation
• Staff motivation = employee satisfaction
Monthly employee satisfaction surveys

• To contribute to a constant 5% reduction of cost year over year

• Average of 7-8 and above on employee satisfaction surveys
• In order to contribute to a 5% reduction of selling and administration cost each year, we will reinforce focus on product release R&D to cut down on unnecessary losses from unsuccessful launches.

• In order to increase staff motivation, monthly employee satisfaction surveys will be distributed to all staff members with the goal of achieving an average of 7-8 and above each month.

Key Performance Indicators
The Balanced Scorecard
Ethan Bourland
Julia Escobar
Xia Madonis
Elan Saynay
Key Performance Indicators

Customer satisfaction surveys
Given to customer at end of each month
Five questions
Ranking based on scale of 1 to 10

On time product delivery
Customer gives date they need product delivered, and we deliver it either before or on that designated day

To have all ratings from customers be an average of 9 or above

To have 95% of orders delivered on time

In order to ensure customer satisfaction we will send out surveys at the end of each month to each of our customers, with the goal of getting a nine or above average out of the five questions over a six month period.

Timeliness of delivery is very important to our customers, and so we are shooting to have 95% of our products delivered to their specific destinations either before or on the date designated by the customer over the next six moths.
Financial Perspective:
higher customer satisfaction could mean more orders, which means higher revenues

Internal Business Perspective:
We would need to make a more effective production line in order to ensure timeliness of orders
Financial Linkages
Financial Perspective:
Reinforced focus on product release R&D could mean a decrease in losses from unsuccessful launches, and therefore increased profit through better preparation
Internal Business Perspective:
Increased staff motivation can lead to higher employee satisfaction, which means increased productivity and a more cohesive internal business structure
Customer Perspective:
Higher employee satisfaction means happier workers, affecting customers in turn

Percentage of total sales revenue, contributed from new products
Percentage of defective output for all product lines
To have 20% of our total sales be from new products
To only have 2% of our total output be defective
Key Performance Indicators
In order to increase the number of new products, we would want to have 20% of total sales be from new products by 2016
To increase process quality, we would want to limit our output of defective products to only 2% of total sales by 2015
Customer Perspective
Increased process quality means more customer satisfaction because of less defective products
Innovation and Learning
The release of new products has a direct correlation with increased and effective R&D
Increased process quality means less defective output, which in turn helps to cut unnecessary costs
Revenue Growth
Cost Reduction
Asset Utilization
Increase sales from new products
Increase sales from existing customers

Decrease Sales, Selling, & Administrative costs
Decrease the cost of unsuccessful or defective products

Improve asset utilization
Percentage of sales from new products contributing to total revenue

Overall sales growth percentage

To have 20% of our total revenue be from the sale of new products
2016 fiscal year end: At least $400,000,000 of revenue from new products

To generate a consistent sales growth percentage of at least 5% YOY
2015 fiscal year end: increase sales by $67,325,250

Key Performance Indicators
In order to increase revenues, we must:
Focus on Internal Business objectives by releasing new products to contribute to at least 20% of total revenue consistently by 2016
Focus on Customer Perspective objectives (increase customer satisfaction) to increase sales from existing customers and generate a consistent YOY sales growth of at least 5%

Percentage of total revenues of Sales, Selling, & Administration costs
Cost of defective products in relation to total revenue
To decrease the ratio of Selling & Admin costs to total revenues by at least 5% YOY until all products have S&A costs that are 80% of total revenue
2015 fiscal year end for Refrigerated and Frozen products
Fluid Milk: 91%
Cultured: 91%
Ice cream: 86%
2015 fiscal year end for Cheese & Butter products
Industrial: 88%
International: 84%
To have costs from defective products make up less than 2% of total revenue

Key Performance Indicators
In order to reduce costs, we must:
Focus on reducing the percentage of S&A costs to total revenues by at least 5% YOY to improve the profitability of both existing and new products

Economic Value Added in relation to R&D

To increase overall EVA by increasing R&D costs to make up 1% of total revenue
2015 fiscal year end: R&D costs of at least $20,000,000

Key Performance Indicators
In order to increase asset utilization, we must:
Focus on Innovation & Learning objectives to increase R&D to make up 1% of total revenue by the 2015 fiscal year end

For Ault Foods Limited
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