CASE STUDY MGMT515
Samuel O. Falola
STRATEGY MAP AND BALANCED SCORECARD AT DOMESTIC AUTO PARTS (DAP)
The strategy to realizing the changes required at Domestic Auto Parts (DAP) will involve the followings:
i. The financial perspective
ii. Customer Perspective
iii. Process Perspective
iv. Learning and Growth Perspective
FINANCIAL PERSPECTIVE:
1. DAP shareholders are the parent company which they are subsidiary of.
2. The shareholders expectation areas are:
The goal of the leadership to change the financial situation at DAP is to increase its 9% return on capital
to achieve 12% within 2 years. The company will focus on two major factors here: productivity and
growth. To achieve productivity goal, the company will minimize total cost structure, improve on the
use of capital assets both the current and new, and increase top line revenue by 50%. There is no way to
improve growth without capitalizing on some of the financial issues that are hindering the profit making
capabilities of the company. Growth increases revenue, to increase revenue at DAP, new products need
to be pushed out, equipment upgrades and new investments will be required.
Increase ROCE to 12%
Productivity Strategy: Maximize the utilization of existing assets and reduce cost without limiting
investment and increase top line revenue by 50% through innovation.
Revenue Growth Strategy: Introduce new products, equipment upgrade, introduction of new partners
and understanding of customers need and becoming innovators. The growth is creating opportunity for
more investment and also focusing on improving the utilization of asset base capital from operating on
the 65% old assets to get to 90% utilization on an upgraded asset base.
CUSTOMER PERSPECTIVE
1. DAP costumers are the various distributors carrying their products
2. The customer wants on time delivery and on spec products.
DAP need to understand what their customers want which can be achieved through continuous
communications and seriously understanding the customers need. Customers actually want superior
products, technology –sophisticated products from DAP. Also DAP need to convince their customers
that they are innovators with superior reputations with an unbeatable image. Customers need to know
CASE STUDY MGMT515
Samuel O. Falola
how consistent and reliable DAP products are and how they maintained their ranking in the industry. All
these are usually an added advantage for those that carry the supplier’s products.
DAP will create value for its numerous customers through intimacy. The company needs to create
continuous relationship with the key customers that are within the 65% range that create the 90%
profits for the company. DAP will create customer’s proposition through timely delivery, on spec
products, improved products, new products line, and customer service relationship with value rewards.
The more profit the company makes the better it is for them to identify its loyal customers and build
good relationship to retain this customer or make them partners.
PROCESSES PERSPECTIVE
1. Some of the most important processes for creating value for DAP’s shareholders and customers are
The proper coordination of Supplier management
Coordination of manufacturing management
Re-evaluating and re-organizing of the delivery management
Streamlining of distributions process to attract strong business partners to retain profitable customers
Reevaluate the procedures for preventive maintenance to eradicate equipment breakdown
Management of supplier’s pipeline and raw materials
Products improvement as an essential part of the process
Capital assets utilization
2. Objectives and measure for process mentioned above:
Strategic Objective
Product improvement
Manufacturing management
Delivery management
Preventive maintenance
Streamline of distribution process
Supplier management
Raw material
Assets
Strategic Measures
Increase in ROCE
Upgraded equipment and research process
On time delivery and customers comment’
Reduction of unscheduled downtime
Cutting cost and establishing key distributors
Reduction in product storage
Proper utilization
Upgrade and monitor efficiency
CASE STUDY MGMT515
Samuel O. Falola
LEARNING AND GROWTH
1. DAP requires improvement in R&D department of the company which is important to developing of
new products and improving of the old ones. This is essentially the heart of the company’s innovation.
The skill to develop new products, maintain preventive maintenance, streamline distribution process,
and for the marketing department to work more with the manufacturing department in order to
understand in depth about the new products are the most essential at DAP.
Secondly, the company should be able to coordinate the management processes in order to bring
perfection into the organization.
2. In the area of human resources it is important for the DAP to know how to increase learning process
and facilitates training within the organization no matter how geographically dispersed their employees
are. For such a huge company with various outlets, it is important that communication is the foremost
priority for the company to succeed in the area of innovation. Information technology plays a crucial
role in the manufacturing industry, for DAP to retain its ranking there is need for strong technology
background for manufacturing company in automobile industry. Information technology should not be
comprised for any reason in the company. The just in time technology should be taking advantage of
and use by the company. Alignment is important especially in an organization where every sector is
experiencing different changes. Employees need to be oriented and trained for the new improvement
and the series of changes going on in the company.