King Fahd University of Petroleum & Minerals
Department of Construction Engineering & Management
CEM – 515: Project Quality Management
Balance Scorecard Proposal for
Professor Abdulaziz A. Bubshait
Outline
•
Purpose of Study
•
Bakheet Co. Company Profile
•
Literature Review
•
Balance Scorecard (BSC) Background
•
Proposed Balanced Scorecard for
Bakheet Co.
•
Conclusion
Purpose of Study
In spite of their struggles for a
continuous improvement and the
significant end-of- year performance,
Bakheet Co. is able to improve by
adopting the Balance scorecard
system (BSC). So, my term paper I will
introduce a typical BSC system for
Bakheet Co.
Bakheet Co. Company Profile
 Bakheet Co. for Machinery Ltd. was
established in 1975 by three ambitious
individuals. Two of them are from Bakheet
family and one from Al Rifai family.
 The Second Generation of those two families is
still active in the company to date.
 Bakheet Company headquarter is located in
Jeddah. The other six branches are spread in:
– RIYADH, DAMMAM, MEDINA, GASSIM, TABUK,
AND ABHA.
Bakheet Co. Company Profile
Company's Activities:
 Provides equipment and support for
construction and paving industry.
(core business)
 Diversified in distribution of tools and
workshop equipment known as most
comprehensive in KSA.
Company Profile
Literature Review
Concept:
 Conducted by Dr. Robert Kaplan from
Harvard and Dr. David Norton with Nolan &
Norton.
 One year research project included 12
companies at the leading edge of
performance measurement.
 Comparative analysis conducted between
these 12 companies and today's general
measurement practices.
Using a Scorecard by Industry Sector
Manufacturing/Service
General Electric
Cargil
Johnson Controls
XEROX
IBM
United Parcel Service
BellSouth
AMOCO Corp
NOVA Chemicals
Siemens
Solvay Pharmaceuticals
Anheuser Busch
Motorola
Amazon.com
Baltimore Gas & Electric
Hewlett Packard
Honeywell/AlliedSignal
Johnson & Johnson
Shell Oil Company
MCI Worldcom
Health Care
Education
University of Michigan
Methodist Healthcare
BJC
Novant Health
SLSMHS
Eden Medical Center
Northwest Hospital
Overlake Hospital
Duke Children’s
Saint Joseph Mercy
Mayo Clinic
Suburban Hospital
Advocate HealthCare
Duke University Medical
Peel Memorial
Henry Ford Health
King’s College Hospital
Shayne Medical Center
North Shore Health Region
Good Samaritan Hospital
University of
Wisconsin Stout
University of San Diego
Educational Testing Srvs
Harvard
University of Montreal
University of Missouri
Outreach & Extension
Balance Scorecard (BSC) Background
BSC consists of a set of superior
combinations of financial and non-financial
measures that provide a comprehensive
view of the business to guide strategy
development, implementation and
communication.
It also provides reliable feedback for
management control and performance.
Balance Scorecard (BSC) Background
The Scorecard allows an organization to
look at their performance from four
important perspectives:
 How do customers and other key stakeholders see us
(customer perspective)
 What must we excel at (internal perspective)
 Can we continue to improve and create value (innovation &
learning perspective)
 How do we look to financial holders (financial perspective)
Example based on a real semiconductor Co.
Financial Perspective
Goals
How do
customers see
us?
Cash flow
Succeed
Quarterly sales growth
and operating income by
division
Customer Perspective
Goals
New
Products
Responsive
supply
Preferred
supplier
Customer
partnership
Measures
Survive
Prosper
Increase market share and
ROE
Measures
What must we
excel at?
Internal Business
Perspective
Goals
% of sales from new
products
% of sales from
proprietary products
On-time delivery (defined
by the customer)
Share of key accounts'
purchases
Ranking by key accounts
Number of cooperative
engineering efforts
How do we look
to shareholders?
Innovation & Learning
Perspective
Goals
Technology
leadership
Measures
Time to develop next
generation
Technology
capability
Manufacturing geometry
vs. competition
Manufacturing
excellence
Cycle time
Unit cost
Yield
Design
productivity
Silicon efficiency
Engineering efficiency
New product
introduction
Actual introduction
schedule vs. plan
Manufacturing Process time to maturity
learning
Product
focus
Percent of products that
equal 80% of sales
Time to
market
New product introduction
vs. competition
Measures
Can we continue
to improve and
create value?
The Proposed Balanced Scorecard for
Bakheet Co.:
Before proposing a BSC for BAKHEET Co. I will propose
a vision, mission and objective.
Bakheet Co. Proposed Vision:
To become a leading heavy equipment agent in Saudi
Arabia with a focus on seamless customer relationships
and delight.
The Proposed Balanced Scorecard for
Bakheet Co.:
Bakheet Co. Proposed Mission:
 To participate in developing Saudi industry and
economy through providing quick solutions and
ensuring the delivery of quality after sales support for
Bakheet Co. customers to enable them to accomplish
their works efficiently.
 To operate the company on a sound financial basis of
profitable growth, increasing value for Bakheet Co.
shareholders and creating career opportunities and
financial rewards for their employees.
The Proposed Balanced Scorecard for
Bakheet Co.:
Bakheet Co. Proposed Objectives:
The objectives of Bakheet Co. are to increase revenues
through expanded sales to existing and potential
customers,
become
service
oriented,
achieve
excellence in order fulfillment through continuous
process improvements and to align employee incentives
and rewards with the strategy.
Bakheet Co. Proposed Financial Perspective
Goal and Measures:
How Do Bakheet Co. Look to Shareholders?
Financial Perspective
Goals
Return on
Spending
Revenue
Growth
Reduce Costs
Measures
Net Income /Expenses Saudi Riyal
% increase in year to year revenue
% reduction in cost of sales and after
sale services
Bakheet Co. Proposed Customer Perspective
Goal and Measures:
How Do Customers See Bakheet Co.?
Customer Perspectives
Goals
Measures
Value Proposition for
New Customers
Survey of now customer satisfaction , including
feedback in:Bakheet value proposition Employee
knowledge and capabilities Convenient access
Provide Consistent/
Seamless Service
Survey of existing customers on:
 Quality
 Availability
 Responsiveness
 Errors and defects
Retain Existing
Customers
Customer retention rate in targeted segments
Bakheet Co. Proposed Internal Perspective
Goal and Measures:
What Must Bakheet Co. Excel at?
Internal Perspectives
Goals
Achieving excellent
supplier relationship
Developing high
quality supplier
capability
Measures
% strategic partnerships established with
suppliersSupplier scorecard, with rating on
1.Cost
2.quality
3.Delivery
4.Flexibility
% perfect order receivedPart-per ten defect
rates from supplier %defect, incoming orders
% supplier qualifies to deliver without
incoming inspection
Bakheet Co. Proposed Innovation & Learning
Perspective Goal and Measures:
How Do Customers See Bakheet Co.?
Innovation & Learning Perspectives
Goals
Measures
Reskilling
competencies to accomplish aggressive
revenue generation targets
Strategic Information
The amount of information and knowledge
possessed by the employees on company
processes, equipment, and customer
Accountability
The extent to how incentive program are
affection.
The extent to how personal goal align with the
company goal.
The Final Proposed BSC for Bakheet Co.
Financial Perspective
Goals
How do
customers see
us?
Cash flow
Succeed
Quarterly sales growth
and operating income by
division
Customer Perspective
Goals
New
Products
Responsive
supply
Preferred
supplier
Customer
partnership
Measures
Survive
Prosper
Increase market share and
ROE
Measures
What must we
excel at?
Internal Business
Perspective
Goals
% of sales from new
products
% of sales from
proprietary products
On-time delivery (defined
by the customer)
Share of key accounts'
purchases
Ranking by key accounts
Number of cooperative
engineering efforts
How do we look
to shareholders?
Innovation & Learning
Perspective
Goals
Technology
leadership
Measures
Time to develop next
generation
Technology
capability
Manufacturing geometry
vs. competition
Manufacturing
excellence
Cycle time
Unit cost
Yield
Design
productivity
Silicon efficiency
Engineering efficiency
New product
introduction
Actual introduction
schedule vs. plan
Manufacturing Process time to maturity
learning
Product
focus
Percent of products that
equal 80% of sales
Time to
market
New product introduction
vs. competition
Measures
Can we continue
to improve and
create value?
Conclusion
The following cornerstones needed to be taken
into considerations
 No single measure can provide a clear target or
focus attention on the critical areas of the
organization
 Leaders need a set of measures that gives them a
fast but comprehensive view of the organization
 Leaders
need a structure that minimizes
information overload by limiting the number of
measures used