Perspectives for a Balanced Scorecard Approach to an Organization (Futura)
Futura is a 50 year old international company involved with aluminum extruding, finishing, fabrication, machining and design. Futura industries serves a high end clientele in a variety of markets for example; floor covering, electronics, trims, showers, marine and transportation.
Futura industries are guided by their mission that states that “Extraordinary Value through Extrusions”. With this mission the company expects each and every employee to contribute to the success of the company as well as of the customer.
Futura has adopted a visionary strategy of Learning, innovation and growth as one part of its growth strategy and as a dimension in creating a balanced scorecard. This is because Futura believes that a work force that is challenged to grow and feels respected and trusted is the foundation of its success. This strategy has led to the company’s 50% revenue increase from 1996 – 1999 without hiring new staff.
The balanced scoreboard at Futura is approached to make sure the company grows, prospers and survives. This is further divided into two major pillars of strategy to make sure they are easily monitored and easily manageable, these pillars are; growth and operational excellence.
Growth is monitored by intimacy, this where the company uses the knowledge it has of its customers to solve problems and improve on the services to them, flawless production of their products without hitches hence these ensuring there is a steady supply and the last bit under the growth strategy is production of new products. This keeps it in line with its goal of innovation and attracts new customers too.
Operational excellence is gained through speedy delivery of its products and maintaining quality as well as planning and having timely delivery to their customers. The company also has continually reduced its costs. Hence the balanced score board approach has been used by Futura as an overall tool to tract its growth and survival.
The balanced scorecard helps the company to satisfy its mission by putting together the company’s strategy and tactical measures. This dimension of learning, innovation and growth, when put to operation made sure that the other three components of its overall dimension also succeeded. These components are namely; customer service, financial and internal operations.
The three objectives of improving the company’s financial position include the following
Improve the costing information of customers.
This analyses the standard price per item per customer so that the Futura industries can compare the profitability between customers.
This is used in monthly reporting meetings to communicate the financial state of the entire company and also to compare customers based on the profitability that in turn drives behavior. This falls perfectly within the company’s mission and overall strategy in that the growth of the company has to closely monitored to in order to arrive to and achieve extraordinary value.
Measures in internal perspectives
Futura follows four major goals when it comes to measuring and achieving its internal perspectives. These goals include the following:
Planning and delivering flawless new products
Plan and deliver in order to deliver what the say and when say.
Indent new products in products and processes and
Reduce their cost continually
This has been specifically designed in guidance with the mission. In order for the company to be and extraordinary valuable and maintain its learning, innovation and growth the company has to maintain a vibrant work force.
Good customer service.
The Futura industry has built a customer service dimension which lies entirely in hiring people aligned with the company and retaining those who deliver outstanding customer service. This has helped the company to stay in focus and in touch with its mission and the entire the dimensions hence the industry keep being extraordinary value trough extrusions.
Performance measures of each of these objectives:
Futura measures the performance of improving the costing information on each customer objective by analyzing standard cost per item to the actual cost per item this is done by actually looking into individual level. Actual costs vary based on time of production, raw materials to be used and overhead costs.
However, to measure customer service urgency and responsiveness is the major ways Futura industries uses to gauge customer service. This has four major dimensions for measure which include: customer satisfaction, customer complaints, on time delivery and return materials rate to measure customer satisfaction the company calls 10 customers randomly and asks them a series of questions as it regards its relationship with Futura.
While measuring internal perspectives Futura industries addresses these from four major parts the goals themselves.
- Plan and deliver flawless new products.
- Plan and deliver orders of what they have promised and when they promised
- Indentify new opportunities and processes
- Reduce their costs
Hence the industry admits that one of their important metric on basic scoreboard is safety.
Expected Level of Performance for each Objective
The performance of the improvement of costing information is to make sure the order processing is bringing profits to the company hence the high volume customers are targeted for ways the company can gain additional profitability. This is used by the sales team too to daily manage net grass margin levels hence the target.
Internal perspective is targeted to continually improve new job analysis in order to drive ultimate productivity and profitability of the company. Futura industries uses this for employment physicals to predict the ability to succeed an the job and for the annual ‘fitness to work’
Hence, meeting the goals to reduce the number of insurance claims and thus improving on the company’s profitability.
Customer targets on quality, on time delivery and fair value of products and services. This is inclined at improving the customer confidence in the company and aims at maintaining and also attracting more, thus when you take a close look at the basic scoreboard you will realize that it s been used in every aspect build a profitable company and keeps it on tract with its mission and vision.
Programs Developed to help Implement each Objective
Futura industries has developed a number of programs and developed new ideas which are made to meet its needs. for example the following:-
Futura has developed a cool tool that has helped greatly to improve costing information. This tool is used to financial department to analyze measure and daily gross margin levels as well as analyze each customer by items they purchase or order.
A Futura industry has as well come up with an analysis method introduced to capture data on very critical motion used on the job. This is conducted by a physical therapist and monitors employees individually in each major category of the job.
In addition to the above, Futura industries also uses surveys in order to ensure customer service is kept at its highest levels possible. This has ensured the company gets relevant and useful feedback as well as keeps in touch with the disgruntled customers.
In conclusion, we can therefore a test that the basic scorecard has been utilized in an innovative manner by Futura industries and it has helped it to maintain in its mission, vision and overall strategy hence the success and continued growth of the company. Futura Company has used the balanced scoreboard approach as an overall tool in its daily management and uses it to make sure it has kept tract of its mission and vision in an innovative manner.