Question

Organic Food Stars Pty Ltd, (“OFS”) is a small company that imports, manufactures and wholesales organic foods. OFS products are minimally processed and contain no artificial additives. In a world with growing interest in premium quality foods, OFS invests heavily in research and is building a reputation for its quality goods. OFS has invested heavily in Research and Development (R&D). The R&D annual budget is $20 million for the current year. It employs a senior food scientist, five junior scientists, and two administration staff. The goal of the R&D department is to develop high-quality new products that are then tested and found to be acceptable for human consumption by an external quality testing agency. The agency provides specific feedback on the products and has even rejected products in the past. A rejected product results in high additional costs or severe losses to OFS. Identify two (2) key KPI’s for the Board to consider for each of the internal process and the learning and growth quadrants of the balanced scorecard for the R&D department.

Answer 1

Balance Score Card is the new technique to present information to the management for decision making. There are four quadrants for the score card: Learning and growth, financial, internal and customer perspective each having their own Key Performance Indicators.