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Balanced Scorecard.Cypress102


William Cha

on 14 May 2015

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Transcript of Balanced Scorecard.Cypress102

Internal processes
Research and development processes
Distribution and production processes
After-sales processes
UPS - Financial
Financial Goals
Increase EPS 10%-15% per year
Increase revenue 6%-8% per year
Return on invested capital by 25% starting 2014
Free cash flow each year to exceed 100% of net income
Expansions of distributions to shareholders in the form of dividends and stock repurchasing
FEDEX - Customer Perspective
Swot Analysis - FedEx

UPS - Internal Process
UPS - Learning & Growth
Training and Education
Information System
Balanced Scorecard

Training & Education
FEDEX - Learning & Growth
Promote diversity and inclusion in the domestic workforce.
Promote training and development of employees.
Provide incentives for employees and departments that show positive annual results and provide incentives to employees that have shown employer loyalty.
Improve technology to improve international communication internally and automate customer services as much as possible.
FedEx - Financial
Financial Goals
10% Operating Margin
Incease EPS 10%-15% each year
Grow Profitable Revenue
Improve Cash Flows Increase ROIC
Increase returns to shareholders
UPS - Customer Perspective
SWOT Analysis
FEDEX - Internal Process
Employee Retention
Employee Satisfaction
Employee Production
Competition - Main domestic competitor UPS; internaltional competition (ex. DHL).
Cultural/Religious Inclusion - Continually looking for untapped markets.
Logistics - Efficient package delivery on global scale at an affordable price, even in 2nd/3rd world countries.
Peer to peer (P2P)
Certified trainers
Wellness Program that promotes a healthier lifestyle
Intangible benefits
Information System
On Road Integrated Optimization and Navigation system (ORION) provides real-time feedback:
-Best route(s) -Expedited delivery time -Vehicle status
Extensive cost savings to positive environmental effects
Focus on international business; less competition.
Hiring and training a very diverse workforce.
Software development to simplify international internal communication and customer satisfaction.
1) adding more capacity to their global network,
2) improve efficiency through innovations
3) Expand their network and capabilities in growth markets around the world, implementing strategies in key emerging and growth markets such as Asia.
4) Focus on fast-growing industries such as healthcare and e-commerce.
5) Reengineering processes and interfaces to generate greater customer satisfaction.
Revenue increase
Operating margin increased from 5.8% to 7.6% in 2013.
Cost reduction
Training program and software improvements resulted in $2.5 million dollars in net savings from decrease in employee errors and increase in customer satisfaction.

Global brand
Strong distribution network


Perception of Ground Dellivery Instead of Overnight
Heavy Union Presence


Expansion of Online Shopping
Emergence of International Middle Class


Increasing Fuel Costs
Competitive Landscape (DHL FedEx)
Potentially Slowing Global Economy

Diversified business operations
Strong information systems network
Strong foothold in the market
strong financial position


Overdependence on the U.S. Market
Seasonality of the business
Increasing trade receivables


Agreements and acquisitions
Growth of air freight and logistics market
Expansion plans
Cost-cutting initiatives


Volatility in crude oil costs
Intense competition
National Labor Relations Act
Measures of Success
Research and Development
efficiency in innovating new technologies
Distribution and production
efficiency in deliveries
efficiency in keeping costs low
After-sales process
can customers voice their complaints
New Innovations
ORION- cut down on delivery costs and maintenance costs
Package Flow Technologies- helped increase number of on-time deliveries, 91% (3% better than FEDEX)
System of "Only Right Turns"- cut down on delivery costs and increases employee safety
Website- up-to-date package information, customers can voice complaints
Grow Core Package Business
Grow Internationally
Grow Supply Chain capabilities
Grow through E-commerce and technology
Grow through new services and alliances
New on-road integrated and navigation system
Major expansion in Europe
Completion a $1 billion expansion of its high-tech UPS Worldport air hub.
Double the size of supply chain and logistics campus
Assembled the "Youngest" fleet of aircraft in the Cargo Industry
2015 Growth Strategies
Grow core package business
Grow internationally
Grow supply chain capabilities
Grow through e-commerce & technology
Grow through new services & alliances
Long Term Goals
Achieve 10% operating margin
Increase EPS 20% - 15% per year
Grow profitable revenue
Improve cash flows
Increase ROIC
Increase returns to shareowners
New Centennial Plan
Attract talented people
Study our customer's behavior
and anticipate their needs
Develop an environment that enables us to treat a customer as if he or she were our only customer.

Internal/Employee Growth
: Provide Key programs that will promote positive internal communications and staff development
Open Door Process
: allow employees to provide direct feedback and comments to management.
Promotion From Within Policy
: provides employees priority in application, consideration, and selection for any open positions.
APAC e-Learning
: gives employees an opportunity to learn in their own time from any location for job enhancement or personal development.
: Growth through innovation in technology
Cost Down, Customer Satisfaction Up
: Incorporation of Oracle Advanced Collection to revolutionized management and improve customer experience
15% reduction in operating and collection costs
Within 1 year of going live, goals were not only met but surpassed.
4 day improvement in days sales outstanding.
Productivity up and bad debt down.
Multiple Customer Touchpoints
: Merging with the growing transportation,e-commerce, and business service markets.
Redesigned with Customers in Mind
: Customer can tell how well organized internally a company is by what they see and the things that do not fit.
UPS Company
UPS is a global logistical leader, operating in over 200 countries.
just like most companies UPS face decreasing revenues, however UPS has had an increase in revenue in the past several years.
"Unusual expense" and Increasing costs is an issue for UPS as it seeks to expand operations in the global market.
Regulatory issues:
Foreign taxes and laws often interrupt UPS's performance.
The only major competition UPS faces is FEDEX, however they each have their own niches in the market.
UPS has a bigger ground fleet.

Growth rate for past 4 years
Year 2011: 7.19%
Year 2012: 1.92%
Year 2013: 2.42%
Year 2014: 5.04%
FedEx Corporation
A global courier and information technology service provider.
Currently operating in 220 countries and territories.
Strong focus on international service.
FEDEX - Conclusion
Financial/Long Term Goals
Achieve 10%+ operating margin
Grow profitable revenue
Improve cash flow
Increase ROIC/returns to shareowners
UPS Conclusion

• Increase efficiency in there package and delivery processes
• Improving their customer service, and employee efficiency and productivity
• Expanding the company internationally
• Increase revenue
Employee Retention
UPS states "The strength of their company is with their people, working together with a common purpose."
2012 - UPS comany has 399,000 Employees
323,000 located domestically
76,000 located internationally
2014 - UPS comany has 435,000 Employees
354,000 located domestically
81,000 located internationally
Employee Satisfaction/Production
To promote employee satisfaction and production UPS Company includes the following:
7 step Comprehensive health and safety process to prevent occupation illnesses and encourage healthy lifestyles
Prescription Drug Program
Life Insurance
Supplemental Group Universal Life Program
Business Travel Accident Insurance
Sickness & Accident Insurance
Long-Term Disability with Inflation coverage
Long-Term Care Insurance
Child/Eldercare Spending Accounts
Healthcare Spending Accounts
Cancer Insurance
Work-Life Balance Programs
1) Increased Competition - Primary competitor (UPS).
2) Declining Revenue Growth.
3) Increasing Costs - Sensitive to changes in fuel costs.
Source: http://investors.fedex.com/financial-information/performance-at-a-glance/default.aspx
Implementing new technologies to their fleet of trucks
ORION technology
Increased employee productivity and efficiency
Comprehensive Health and Safety Process
Improved customer service
The New Centennial Plan
Online website
Incurred extra expenditures and increasing costs
Still has had increase in revenue
Unable to meet goals to increase sales and net income by 5-6%

Growth Strategies
Grow Core package business
Grow internationally
Grow supply chain capabilities
Grow through e-commerce & technology
Grow Through new services & alliances
Continue to employ more employees as they grow internationally
Implement new technologies into delivery systems to keep up with growth of e-commerce
Full transcript