GM588 Week 5 Case Study

8/11/2019 GM588 Week 5 Case Study

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Case Study

Quality in Practice: Using theBalanced Scorecard at the USPS

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KEY ISSUES FOR DISCUSSIO

!" For a lot of companies such as the United States Postal Service, Voice of

the Business (VOB) represents projects or initiatives that are initiated from within the

business which tend to start from either a need to improve efficienc, reduce cost or

ultimatel to respond to a historical customer re!uirement or problem" #t $encompasses

the primar needs of a business and its sta%eholders, includin& profitabilit, revenue,

&rowth and mar%et share, and can be used to establish &oals and define success within

a life ccle map"' Understandin& the voice of the business assists in identifin&

potential projects to aid in movin& an or&aniation closer to its &oals and objectives, and

properl initiatin& the voice of the customer identifies needs and re!uirements that feed

into project selection" *he Voice of the +mploee (Vo+) is ver important to the lon&

term viabilit of a compan" $-o or&aniation can survive without &ood people. people

who are improvin& to carrin& out the messa&e and mission of the compan,'/to satisf

customers, the wor%force must first be satisfied and b &ivin& the emploees a voice

throu&h informal and formal means, and b allowin& emploees to participate in

influencin& corporate decision ma%in&, can have a positive impact on the financial

results of a compan"

*he emploees0 voice brin&s about personal ownership and a sense ofresponsibilit that emploees are directl contributin& to the business0s success" 1n

en&a&ed wor%force is %e to strate& and process desi&n, their insi&hts can help to

drive the value levers and mappin&, and define valueadded services and products to

provide effective customer satisfaction" *o &et the most out of customers, a compan

needs to have in place an orderl, outbound, offensive mar%etin& plan that includes a

welldefined Vo+, desi&ned not onl to retain customers but also to increase the amount

of business each customer does with the compan b tappin& into customer loalt"

*he Voice of the 2ustomer (VO2) provides valuable insi&ht into what about the product

or service that customers find valuable, and what the find annoin& or useless and

throu&h Vo+, emploees can provide a dialo&ue with mana&ement that sheds li&ht on

1 http://www.businessdictionary.com/definition/voice-of-business-VOB.html2(ana!in! for "uality and #erformance $%cellence& 'th $dition. outh )estern $ducational #ublishin!& 1/2**+. p.

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how the will appl the compan vision to their dail tas%s and how the will en&a&e

within the project selection processes"

#n summar, or&aniations need to understand the importance of balancin& VOB,

VO2 and Vo+, once these concepts have been full inte&rated. a compan will be able

to establish a process to monitor and control process performance also ma3imie the

value of their customer satisfaction measurement investment" 4evelopin& these three

senses, helps improve a compan0s mar%et share and profits b $understandin& the

relationship between business activities and the customer0s perceived value from those

activities'5" B focusin& on what customers found valuable and removin& or reducin&

what the found annoin&, these small businesses could accumulate financial success

and customer loalt"

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#" 7easurements and indicators provide a scorecard of business

performance that can be used at all levels of the or&aniation" 8hat ou measure is

what ou &et, a balanced scorecard is a measure that drives performance in an

or&aniation" *he balanced scorecard allows mana&ers to learn to loo% at the business

from four perspectives. internal processes, customer satisfaction, product innovation

and financial perspectives, and minimies information overload b limitin& the number of

measures used" #t brin&s to&ether a lot of the seemin&l disparate elements of a

compan0s strate&ic priorities and focuses on the importance of mana&in& these

components to achieve them, such as, 9i*, *:7, emphasiin& teamwor%, becomin&

more customeroriented, lon& term mana&ement &oals, etc," *he Balanced Scorecard

(BS2) was created b ;arvard Business School Professor, 4r" 1ccordin& to #rv Beiman and 2hristian 2" 9ohnson, the US

Postal Service (USPS) first implemented the BS2 in ??@" Since then, USPS has been

able to increase ontime deliver of mail b /A, increase productivit b almost 5 per

ear while decreasin& overall emploment b fulltime e!uivalent (F*+) of @A,AAA,

http://www.competitive%pert.com/webstrate!y.php http://www.adb.or!/0ocuments/Boos/Balanced-corecard/chap2.pdf


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increase emploee and customer satisfaction, and deliver mail at rates a about half

those of Cerman or 9apan"

*he metric core strate&ies of USPS. financial stabilit, customer focus,

operational efficienc, human capital, is a tailored balance scorecard somewhat similar

to the conventional =aplanD-orton desi&n" USPS0s simplicit of strate&ic focus provides

a powerful messa&e for those or&aniations that believe that the re!uire a lar&e

number of strate&ic objectives and metrics on their scorecard" *he cornerstone of a

&ood balanced scorecard is the selection of the ri&ht objectives and metrics to measure

the performance of the or&aniation"E *o tailor the perspectives to the USPS0 objectives,

the financial perspective should not be the top of the hierarch, instead, value creation

process tar&etin& customers and ta3paers0 satisfaction should be paramount" #n

essence, both financial and customer perspectives should be placed at the top a co

e!ual status, because the successful fulfillment of the mission of the or&aniation is

dependent on both" *he balanced scorecard of the USPS should thus emphasie both

perspectives

Financial Pers$ecti%e & 'o( do (e loo) to resource$ro%iders*

Custo+er Pers$ecti%e & 'o( do custo+erssee us*

Profitabilit e3cess revenue and of net

revenue +fficienc retail inventor turnover

Gevera&e total debt to total assets

Understand needs

+ase of orderin& products VarietDavailabilit

Professionalism and 2ourteousness

Internal Process Pers$ecti%e & ,re (e $roducti%e ande--ecti%e*

Personnel e3pense as a percenta&e of net sales

-et salesDs!uare foot sellin& space

-et salesDstudent full time e!uivalent (F*+)

Inno%ation and .earning Pers$ecti%e & 'o(do our e+$loyees -eel*

#nfluence in the communit

=now howto use tools

7ana&e wor%load

1dvancement opportunities, valuable

trainin&

*he balanced scorecard method is ver useful due to the fact that b loo%in& at

four aspects of a companHs performance, ou reall do &et a balanced view of

compan performance and unli%e traditional methods of trac%in& the financial health of a

business, the balanced scorecard &ives ou a full picture as to whether our compan is

meetin& its objectives" 1 compan can be sure that an strate&ic action implemented

http://www.bri!hthub.com/office/finance/articles/,**.asp%
http://www.brighthub.com/office/finance/articles/73400.aspxhttp://www.brighthub.com/office/finance/articles/69778.aspxhttp://www.brighthub.com/office/finance/articles/69778.aspxhttp://www.brighthub.com/office/finance/articles/69778.aspxhttp://www.brighthub.com/office/finance/articles/69778.aspxhttp://www.brighthub.com/office/finance/articles/73400.aspx


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matches the desired outcomes" -ow these four areas do not paint the whole picture,

however" *he financial information included on the scorecard is onl trul beneficial

when it is full inte&rated into a full sstem of accountin&, due to the fact that it is

sometimes limited and can be otherwise detrimental if ta%en as the whole bi& picture

instead of bein& loo%ed at as just a part of a bi&&er strate& for compan &rowth that

includes meticulous accountin& methods"

Documents

GM588 Week 5 Case Study