Balance Scorecard Proposal for

1. King Fahd University of Petroleum & Minerals Department of Construction Engineering & Management Balance Scorecard Proposal for CEM – 515: Project Quality Management Professor Abdulaziz A. Bubshait

2. Outline • Purpose of Study • Bakheet Co. Company Profile • Literature Review • Balance Scorecard (BSC) Background • Proposed Balanced Scorecard for • Bakheet Co. • Conclusion

3. 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.

4. 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.

5. 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.

6. Company Profile

7. 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.

8. 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 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 Education University of Michigan University of Wisconsin Stout University of San Diego Educational Testing Srvs Harvard University of Montreal University of Missouri Outreach & Extension

9. Balance Scorecard (BSC) Background BSC consists of a set of superior combinations of financial and non-financial measures that providea comprehensive view of the business to guide strategydevelopment, implementation and communication. It also provides reliable feedback for management control and performance.

10. 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)

11. How do we look Financial Perspective to shareholders? Goals Measures Survive Cash flow Succeed Quarterly sales growth How do What must we and operating income by customers see division excel at? us? Prosper Increase market share and Internal Business ROE Customer Perspective Perspective Goals Measures Goals Measures New % of sales from new Technology Manufacturing geometry Products products capability vs. competition % of sales from proprietary products Manufacturing Cycle time Responsive On-time delivery (defined excellence Unit cost supply by the customer) Yield Innovation & Learning Preferred Share of key accounts' Design Silicon efficiency Perspective supplier purchases productivity Engineering efficiency Ranking by key accounts Goals Measures Customer Number of cooperative New product Actual introduction partnership engineering efforts introduction schedule vs. plan Technology Time to develop next leadership generation Manufacturing Process time to maturity learning Product Percent of products that focus equal 80% of sales Can we continue Time to New product introduction to improve and market vs. competition create value? Example based on a real semiconductor Co.

12. 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.

13. 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.

14. 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.

15. Bakheet Co. Proposed Financial Perspective Goal and Measures: How Do Bakheet Co. Look to Shareholders?

16. Bakheet Co. Proposed Customer Perspective Goal and Measures: How Do Customers See Bakheet Co.?

17. Bakheet Co. Proposed InternalPerspective Goal and Measures: What Must Bakheet Co. Excel at?

18. Bakheet Co. Proposed Innovation & LearningPerspective Goal and Measures: How Do Customers See Bakheet Co.?

19. How do we look Financial Perspective to shareholders? Goals Measures Survive Cash flow Succeed Quarterly sales growth How do What must we and operating income by customers see division excel at? us? Prosper Increase market share and Internal Business ROE Customer Perspective Perspective Goals Measures Goals Measures New % of sales from new Technology Manufacturing geometry Products products capability vs. competition % of sales from proprietary products Manufacturing Cycle time Responsive On-time delivery (defined excellence Unit cost supply by the customer) Yield Innovation & Learning Preferred Share of key accounts' Design Silicon efficiency Perspective supplier purchases productivity Engineering efficiency Ranking by key accounts Goals Measures Customer Number of cooperative New product Actual introduction partnership engineering efforts introduction schedule vs. plan Technology Time to develop next leadership generation Manufacturing Process time to maturity learning Product Percent of products that focus equal 80% of sales Can we continue Time to New product introduction to improve and market vs. competition create value? The Final Proposed BSC for Bakheet Co.

20. Conclusion The following cornerstones neededto 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