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Developing performance measurement for Virmax

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Nico Broersen

on 15 September 2014

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Transcript of Developing performance measurement for Virmax

Virmax Café
Methods available to solve the identified problems and desires of Virmax.
Best model for Virmax

Nico Broersen
1st lecturer Philip Dekker
2nd lecturer Maurice Brown
Performance measurement can be defined in its strictest sense as the process of quantifying the efficiency and effectiveness of action (Neely et al)
Unable to set SMART objectives except for financial objectives
Inefficiency in the purchasing & sales process of Virmax
Difficulties with forecasting
1. What are the desires and problems that Virmax currently experiences
in regards to performance measurement?
2. Which methods are available to solve these problems and desires of Virmax?
3. What is the best fitting method for Virmax?
4. How should Virmax implement this method?
5. How should this method be used and what are the costs attached to this?

Which performance measurement should Virmax use in order to measure and achieve its strategic objectives? Sub questions:
The problem
The research
The company
Current situation
Literature review
Best method
best method
Literature review
Reasons for using performance measurement
KPI's < Performance measurement framework
Choosing the best method
Tyagi & Gupta
Brooke & Tobias
Desired purpose
Desired scope
Available resources
Desired level of detail and complexity
Performance of the model
Colombian coffee exporter
High quality
Parchment, Colombia, Central America,
Lack of knowledge in logistics
Problems due to the absence of performance measurement
Inefficiency in the sales process
Currently data of customers are not effectively used and measured. This has as effect that time and resources are ineffectively allocated to customers
Current situation analysis
Assisting strategic as well as operational decision making
Improve financial management and reporting
Set and measure strategic objectives

Balanced scorecard: created through vision & mission, financial, customer, internal business process and learning & growth
EFQM framework: The EFQM framework is non prescriptive in where the PM should be based on.
MBNQA: a non-prescriptive framework, The MBNQA framework has a broad scope and measures internal as well as external measures (Godfrey 2012)
Performance prism the prism model develops the measurement through the needs of stakeholders.
Balanced scorecard, functions well in strategic decision making
EFQM, has been criticized for its weak link with strategy and strategic integration process (Junnonen 1998).
MBNQA, is considered to be an effective strategic management tool (National Institute of Standards and Technology).
Performance prism, functions well in assisting day to day activities (Powell, 2004)
Balanced scorecard, mostly internal factors
EFQM, Requires a lot of resources and time to conduct measurement because of the large dimensions (Wunderer, 1997)
MBNQA: A host of dimensions that are effectively unmeasurable, (Leonard & Mcguire, 2007)

Performance prism: is broader and more complex than the balanced scorecard (Powell, 2004).
Costs & Duration of technical implementation
$1500,- costs of extra recording of data
Recommendation: Implementation of the BSC
Recommendation: Implementation of the BSC
Recommendation: Implementation of the BSC
Learning & Growth
Internal business processes
N. Broersen
Recommendation for the review of the BSC
Every 12 months
Consulting with management
Developing performance measurement for Virmax
$7584,- 12 days, consultancy costs
Balanced scorecard, customer, internal business processes, financial, learning & growth

Performance prism, performance measurement should be derived from the stakeholder satisfaction

EFQM Excellence model,

MBNQA, built upon a set of interrelated core values and concepts
Increase productivity of employees
• Assist strategic as well as operational decision making

• Improve financial reporting

• Increase productivity of employees

• Set and measure strategic objectives

• Bad management of accounts receivable

• A lack of knowledge in logistics

• Inefficiency in the purchasing process

• Inefficiency in the sales process

Current situation analysis
Absence of performance measurement has as effect that forecasts in costs and duration of transport are regularly inaccurate.
the increasing complexity of managing an organization today

increase one's knowledge and at the same time to reduce uncertainty

Continued buying from suppliers that supply low quality beans that get rejected which costs time and money
Inefficiency in the purchasing process
Customers of Caravela often pay later than the negotiated terms
Bad management of accounts receivable
Current situation analysis
Desired scope
The best model for Virmax
Recommendation: Implementation of the BSC
Desired purpose
Available resources
The best model for Virmax
The best model for Virmax
Virmax vision & strategy:

Virmax wants to be the supplier of choice of high quality, fully traceable, direct trade Latin American coffees.
Any questions/comments?
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