The Coors Case (balanced scorecard)

EXECUTIVE SUMMARY

Following the implementation of the CIL supply chain implementation Coors now faces several challenges in reaching the company vision . In to keep the company 's activities in line with the vision , the six planks ' have been adopted . However , there are several gaps between the actual performance of the company , the six planks , and the vision . In to keep the company moving in a cohesive manner , the directive is to implement a balanced scorecard approach for measuring success . Currently , new measurements are needed to evaluate the functioning of the company

p Gaps between the vision statement and the six planks

Aligning and uniting the human , financial , and physical aspects of company ' In the six planks , no system of unification is presented With various plant facilities and functions , this method must be more clearly ascribed

Increase in teamwork and stronger dedication by every person in the organization ' In the six planks , the plank responsible for this development only states engaging and developing people without addressing teamwork and dedication with accompanying rewards and incentives . This is also a concern of employees with the implementation of the balanced scorecard

define the O T Department Vision and Strategies . In this vision it states the use of current , accurate information will enable employees to make better decisions , however , there is no measurement or guarantee of the timeliness and accuracy of information

ANALYSIS

Therefore , the implementation of the Balanced Scorecard will need to take into account these gaps between vision and the methodologies of the company . The performance and financial measures that are adopted must be relevant to the overall vision of the company , yet provide information that can be acted upon quickly . People will also need to be trained to be able to understand the information they are receiving With the advent of new technology , it is imperative that the focus now shift to people and their use and understanding of the system . The company has already experienced enormous change , and after consulting with employees , many of their concerns reflect uncertainty as to what is changing , why it is changing , and how it affects them . Several are concerned that with the tightening of performance measures their contributions will not be adequately seen or rewarded . Aside from change resistance , there are also concerns over the running of the plant and the establishment of measures of performance

Traditional financial methods no longer give the type of information desired by management . Therefore , using EVA (Economic Value-Add analysis is proposed for measuring the overall success of the company Despite the low percentage of stocks Coors publicly trades , the EVA analysis can aid management in determining the value the company is generating over the cost of capital . There have been significant capital investments made over the past years . A basic EVA analysis follows the following formula

Calculate Net Operating Profit after taxes (NOPAT

Calculate Determine the Cost of Capital

Calculate EVA NOPAT-WACC TC

In the Coors case , the EVA roughly calculates as follows

NOPAT 105 ,000 ,000

Invested...