Question

Question 3 (30 marks) Surrey Glass Manufacturing, manufactures a variety of high quality electronic components. Data from the last three months are presented below: Direct materials partial productivity Overtime hours worked Defect rate On time delivery Set up time (average in hours) Number of machine breakdowns 2 Downtime (hours) Number of products returned 6 Throughput time (hours) April May 0.85 0.86 8075 2.00% 1.95% 98.0% 98.3% 6.90 6.85 1 12.0 11.5 5 12.0 11.8 June 0.87 72 1.92% 98.0% 6.80 11.25 11.5 You are the new assistant controller for Ranger and the controller has asked you to review the performance over the last 3 months and write a summary analysis with your recommendations for follow up or further monitoring. In addition, the controller notes that the company, although it has many detailed performance measures, is considering implementing a balanced Scorecard and asks you to identify the measures you think would be most appropriate to include in the balanced Scorecard. Required: Analyze the performance and prepare a detailed Balanced Scorecard.

Answer 1

Meaning of a balance score card :

A balance score card is a performance metric used by organisations used to identify various internal and external issues or matters connected to them .
The balanced scorecard model reinforces good behavior in an organization by anlysing of the following four separate areas . These four areas or perspectives involve learning and growth, business processes, customers, and finance.

Balance score card for surrey manufacturing:

A) Financial perspective

1. Increase direct materials productivity by avoiding normal or abnormal wastage and increasing efficiency

2. Manage and reduce cost

3. Optimise channels to maximise revenue

B) Internal perspective

1. Conduct periodic maintenance and services of machines in order to eliminate or avoid machine down time altogether.

2.Provide adequate supervision for production process in order to avoid defects to products due to carelessness or lack of seriousness

3. provide employees overtime payments at higher rates than normal payment for any additional work rendered by them

C) Customer perspective

1. Achieving 100% on time deliveries.

2. Making quality checks stronger and achieving zero percent sales returns by customers on account of quality issues.

D) Learning and growth perspective

1. provide proper training to new recruits to avoid defects in production process.

2. Provide periodic training to employees in order to increase efficiency and make themselves updated with latest technologies or methods

3. Reduce machine set up time by training all personnel properly.