CASE STUDY MGMT515

Samuel O. Falola

STRATEGY MAP AND BALANCED SCORECARD AT DOMESTIC AUTO PARTS

(DAP)

The strategy to realizing the changes required at Domestic Auto Parts (DAP) will
involve the followings:

i. The financial perspective

ii. Customer Perspective

iii. Process Perspective

iv. Learning and Growth Perspective

FINANCIAL PERSPECTIVE:

1. DAP shareholders are the parent company which they are subsidiary of.

2. The shareholders expectation areas are:

The goal of the leadership to change the financial situation at DAP is to increase its
9% return on capital to achieve 12% within 2 years. The company will focus on two
major factors here: productivity and growth. To achieve productivity goal, the
company will minimize total cost structure, improve on the use of capital assets
both the current and new, and increase top line revenue by 50%. There is no way to
improve growth without capitalizing on some of the financial issues that are
hindering the profit making capabilities of the company. Growth increases revenue,
to increase revenue at DAP, new products need to be pushed out, equipment
upgrades and new investments will be required.

Increase ROCE to 12%

Productivity Strategy: Maximize the utilization of existing assets and reduce cost
without limiting investment and increase top line revenue by 50% through
innovation.

Revenue Growth Strategy: Introduce new products, equipment upgrade,

introduction of new partners and understanding of customers need and becoming
innovators. The growth is creating opportunity for more investment and also
focusing on improving the utilization of asset base capital from operating on the
65% old assets to get to 90% utilization on an upgraded asset base.

CUSTOMER PERSPECTIVE

1. DAP costumers are the various distributors carrying their products

2. The customer wants on time delivery and on spec products.

 CASE STUDY MGMT515
Samuel O. Falola

DAP need to understand what their customers want which can be achieved through
continuous communications and seriously understanding the customers need.
Customers actually want superior products, technology sophisticated products
from DAP. Also DAP need to convince their customers that they are innovators with
superior reputations with an unbeatable image. Customers need to know how
consistent and reliable DAP products are and how they maintained their ranking in
the industry. All these are usually an added advantage for those that carry the
suppliers products.

DAP will create value for its numerous customers through intimacy. The company
needs to create continuous relationship with the key customers that are within the
65% range that create the 90% profits for the company. DAP will create customers
proposition through timely delivery, on spec products, improved products, new
products line, and customer service relationship with value rewards. The more profit
the company makes the better it is for them to identify its loyal customers and build
good relationship to retain this customer or make them partners.

PROCESSES PERSPECTIVE

1. Some of the most important processes for creating value for DAPs shareholders
and customers are

The proper coordination of Supplier management

Coordination of manufacturing management

Re-evaluating and re-organizing of the delivery management

Streamlining of distributions process to attract strong business partners to retain

profitable customers

Reevaluate the procedures for preventive maintenance to eradicate equipment

breakdown

Management of suppliers pipeline and raw materials

Products improvement as an essential part of the process

Capital assets utilization

2. Objectives and measure for process mentioned above:

Strategic Objective Strategic Measures

Product improvement Increase in ROCE
Manufacturing management Upgraded equipment and research
process
Delivery management On time delivery and customers
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 CASE STUDY MGMT515
Samuel O. Falola

Preventive maintenance Reduction of unscheduled downtime

Streamline of distribution process Cutting cost and establishing key
distributors
Supplier management Reduction in product storage
Raw material Proper utilization
Assets Upgrade and monitor efficiency

LEARNING AND GROWTH

1. DAP requires improvement in R&D department of the company which is important

to developing of new products and improving of the old ones. This is essentially the
heart of the companys innovation. The skill to develop new products, maintain
preventive maintenance, streamline distribution process, and for the marketing
department to work more with the manufacturing department in order to
understand in depth about the new products are the most essential at DAP.

Secondly, the company should be able to coordinate the management processes in

order to bring perfection into the organization.

2. In the area of human resources it is important for the DAP to know how to
increase learning process and facilitates training within the organization no matter
how geographically dispersed their employees are. For such a huge company with
various outlets, it is important that communication is the foremost priority for the
company to succeed in the area of innovation. Information technology plays a
crucial role in the manufacturing industry, for DAP to retain its ranking there is need
for strong technology background for manufacturing company in automobile
industry. Information technology should not be comprised for any reason in the
company. The just in time technology should be taking advantage of and use by the
company. Alignment is important especially in an organization where every sector is
experiencing different changes. Employees need to be oriented and trained for the
new improvement and the series of changes going on in the company.