Chadwick: A Balanced Scorecard
Needs to focus Its business strategy by first addressing the following questions: How do customers see us? What must we excel at? Can we continue to improve and create value? How do we look to shareholders? The Balanced Scorecard is a set of measures that gives top management a fast but comprehensive view of the business. It details both financial and operational measures by focusing on four parameters: Innovation and Learning Perspective, Internal Business Perspective, Customer Perspective, and Financial Perspective.
By adopting the Balanced Scorecard, Chadwick, Inc. Will create a report that Includes financial measures of results already taken together with operational measures that are the drivers of future financial performance. Innovation and Learning Perspective Chadwick will fulfill its company value through its ability to introduce its new products, improve operating efficiencies to generate its revenue. Well-trained employees bring value to a company, and a good training program can improve the employees’ performance.
The best measurement of training is return on investment (ROI). Chadwick, Inc. ‘s goal Is to create an Increase of new drug Innovation; measured y comparing after-training results to previous pre-training results, setting a benchmark at 5%. The Research and Development department (R&D) plays an important role by getting feedback from the market, customers, and specialists. It will use the feedback to create future products to meet their customer’s needs and create profits. The company should set up both short-term and long-term goal for the R;D department.
The short-term goal will be measured by two deferent ways: the amount of new product’s weight on total sales and time a product takes to be Introduced to the market. New products must occupy 60% of the sales. To measure product introduction, Chadwick, Inc. Can compare the time spends on the new product development and compare it to its competitors. The long-term goal is to maintain technology leadership in the industry, measured by Chadwick ability to develop next generation of drug innovation. To motivate the employees, the company should set up a reward system or work environment to stimulate the creativity of Its workers.
Chadwick should Incorporate both monetary and non monetary methods to reward its employees. The non monetary awards include: public recognition such as reduce development team award dinners and ceremonies, recognition through video spots or the company newsletter; or, time off like time allocated to work on “pet” projects, extra vacation for overtime worked, etc. (Sunken, 30). Above all, to build an engaged workforce, enable a rewarding work environment, and leverage technology are essential elements the company must Include when setting measures under Its Innovation and learning perspective.
Internal Business Perspective Chadwick Inc. Needs to implement internal business measures to meet its customers expectations. By identifying and measuring specific goals such as new compound velveteen, excellence in manufacturing and new product introduction, Chadwick will ensure its continued market leadership. New compound development will be measured by the number of products in development and focusing on three factors: will make it through, attrition can determine the number of compounds needed in each stage to ensure registration.
Cycle time will measure the amount of time it takes for a compound to go through the entire process from development to market introduction. Funding will determine how many projects the company can financially support throughout the year. Based on the three factors, management will be able to calculate how many compounds are needed in each development stage and identify any gaps in its strategy. Chadwick needs to continue its excellence in manufacturing. Creating a quality product at a reasonable cost will ensure customer loyalty and drive profits.
The manufacturing development will measure the unit cost of each drug. Also it will measure the cycle time of each drug focusing on quickness and efficiency. Management will be able to calculate if a certain drug takes longer, or is more expensive to manufacture, and make changes accordingly to minimize cost and improve lead time. Product introduction will be measured by the time it takes to market the newly approved drug. It will also measure the costs associated with introducing the new drug, such as advertisement and incentives to distributors.
Management will be able to track each drug and determine if there are any delays in the distributing and marketing process Customer Perspective Customer retention is one of the most important parts in keeping a company going strong. Chadwick must realize that the customer’s opinions, finances, and willingness to buy their products are significant in moving forward. One way that Chadwick can see what customers are thinking is to have a section on their website that allows them to ask questions about the products and to express their concerns about the products that might not be working.
If the company provides this option on their website, the innovation and learning perspective can focus on ways to improve the products and keep the customers coming back for more. Another way to see what customers think of the company and its products is to ask them directly, whether it’s sending them a survey in the mail or asking them at the doctor’s office. These surveys can include questions that refer to which products are effective and not effective, which products consumers tend to purchase, which products people can afford, ask if the products are delivered promptly, and ask whether or not they are satisfied with the service.
Since Chadwick is always looking to grow in quarterly sales and increase market share, it is important to see what customers are willing to pay for and which products they are purchasing. It is important to find out which products are not being sold so Chadwick can take those items off the shelves and save money. Chadwick must see who its target consumers are; they have to find out which age range, gender, and race purchase the products. In order to keep Chadwick customers coming back, Chadwick must provide them with the best products and services.
Another great way to stay in touch with customers is a loyalty program. It’s a great way to use the email marketing tool and Chadwick can send its loyal customers special offers and let them know about upcoming events and new products. To make the customers feel appreciated, Chadwick can send out birthday greetings with gifts or special offers. This personal touch helps customers understand that Chadwick alee them as individuals and invites more loyalty and trust. Lastly, Chadwick needs to keep its loyal customers involved so Chadwick must ask for their opinions on the that would alienate its loyal customers.
From a consumer perspective, a loyal customer would love to have a say in things and provide an invaluable incite on the upcoming business plan. After the decision is reached, their word of mouth marketing will achieve more success than almost any type of advertising or marketing efforts Chadwick employ. Financial Perspective Financial performance and measurements continue to be the crucial measurements or both the company and the company’s shareholders. Financial goals have been set to determine profitability, growth, and shareholder value. Chadwick, Inc. Seed Return on Capital Employed (ROCK) to control the returns from the most profitable divisions and transfer the excess to those divisions that held out the highest promise for profitable growth. Chadwick implemented the reporting of financial summaries by each division to corporate headquarters. The Chadwick executive committee consisted of the Chief Executive Officer, the Chief Operating Officer, two Executive Vice Presidents, and the Chief Financial Officer. The executive committee met on a monthly basis with each division manager to review ROCK performance.
In order to improve production within the Norwalk Division, we recommend that Chadwick implement to a total quality management program. This program will measure extensively the factors in employee participation, statistical process control, and key quality indicators. Chadwick can use computerized control and remote data entry systems which can produce daily income statements. This information can be available to the department managers and operating personnel. With this information, the value of output from production process can be estimated.
This can be accomplished by using market prices and subtracting the expense of raw materials, energy, and capital consumption in the production process. In conclusion, Chadwick, Inc. Needs to create a clearly defined business vision and strategy to properly apply the Balanced Scorecard Theory. The vision and strategy needs to be implemented from top management. Chadwick measurement system will strongly affect the behavior of management and employees. Monetary incentives can be added to the implementation of this program to make it successful.
