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For more recent exchange rates, please use the Universal Currency Converter. Data was collected using a questionnaire that was administered through a drop and pick method. Tables, graphs and regression analysis were used to present the findings. Some of the measures that are extensively used include percentage of sales margin, profit margin, range of products offered, accuracy of forecasted demand, level of partnerships with suppliers among others. It was also established that some critical measures have not been intergrated into the organization.
Unfollow thomas balance to stop getting updates on your eBay Feed. These measures can greatly improve the performance of KNC and overcome its challenges of slow production growth, lack of customer awareness, poor information systems and high processing costs. SA Export Opportunities indicated that KNC faces challenges relating to lack of consumer awareness, poor information systems, low purchasing power, high prices due to high processing costs and lack of government support as the government puts more emphasis on other food products such as tea, sugar and coffee. It is thus evident that the BSC has been used both empirically and in literature, however no specific studies have addressed the BSC in the Kenyan food industry specifically in the Kenya Nut Company. With organizations seeking benefits of shorter lead times, responsiveness, flexibility and shorter product development cycles, excellence in supply chain performance is inevitable. The empirical paper provided example measures that are but a tiny fraction of the possible measures that can be developed.
These measures can greatly improve the performance of KNC and overcome its challenges of slow production growth, lack of customer awareness, poor information systems and high processing costs. This measures include return on supply chain assets, cost per operation hour, order lead time, product development life cycle. The study also established some of the challenges faced in implementing the BSC such as too much time in developing and updating the BSC, too many measures being used and difficulty in determining the measures.
It was also clear that there was a very significant relationship between BSC measures and supply chain performance represented by R2 value of 0. Further research can be done on the same study but to a wider group of companies to establish whether the BSC measures are used. It has also been recommended that other organizations embrace the BSC measures to embrace the benefits such as product leadership, improved flexibility, and increased information capital among others.
Supply chain management is becoming a necessity in the competitive marketplace hence the need to have performance measurement tools that can lead to successful supply chains. It strikes a balance between financial and non-financial measures thereby enabling organizations to achieve holistic supply chain excellence. The BSC was developed as an enhancement to the previously traditional methods of measuring performance such as return on investment ROI , payback period and net present value NPV. The traditional methods majored on financial aspects of a firm ignoring other performance indicators.
Neely also explained that performance measurement refers to the use of a multi-dimensional set of performance measures that includes both financial and non-financial measures that quantify what has been achieved as well as measures that help predict the future. Therefore, supply chain performance measurement is the process of determining the productivity of the whole supply chain from suppliers to consumers involving functions such as inventory management, transportation, customer service, storage, delivery and order fulfillment.
The BSC has received a great deal of attention as it integrates financial and nonfinancial performance measures to help organizations in the learning and improvement of their internal and external processes Ababneh, The BSC has four perspectives: The balanced scorecard was developed to address weaknesses associated with traditional performance measurement systems including providing a holistic approach as it addresses both the financial and non-financial aspects unlike the traditional performance measurement tools.
Prior traditional measurement systems cannot capture the measurements that are needed in the modern companies today. High quality services ,intellectual capital ,skilled employees and responsiveness are intangible assets that are important but cannot be captured in the balance sheet hence customers, shareholders and the management cannot know the real worth of a company Chavan, Performance measurement systems can therefore only create value when they are matched with the firms operational goals.
The BSC aligns the performance measures with the objectives of the organization. According to Kaplan and Norton the objectives and measures of the BSC are consistent and mutually reinforcing rather than a collection of financial and non-financial measures that are unrelated. According to Chan performance measurement describes the feedback or information on activities with respect to meeting customer expectations and strategic objectives.
The purpose of a performance measurement system is to ensure that standards and objectives are set clearly, performance is regularly and objectively assessed for accomplishments, and that actions are taken to improve and enhance performance potential in the future Ababneh, With organizations seeking benefits of shorter lead times, responsiveness, flexibility and shorter product development cycles, excellence in supply chain performance is inevitable.
Supply chain performance measurement systems are essential for better decision making by management and good communication across the entire supply chain including supply chain partners and employees. Moreso, supply chain measurement systems ensure timely feedback of information enabling the organization to correct or improve processes in the supply chain.
Kenya Nut Company KNC is a Thika-based Kenyan company formed in and one of the leading producers of macadamia nuts worldwide http: KNC has a vertically integrated supply chain that ensures a continuous chain of the products such as macadamia nuts, organic nuts, coffee and cashew nuts from suppliers to the final consumer. According to the Food and Agriculture Organization as cited by Mogeni macadamia nuts production in Kenya is high, earning the country over Ksh.
However, KNC faces challenges of slow production growth, lack of customer awareness, poor information systems and high processing costs in its supply chain. The BSC can improve the supply chain by overcoming the challenges faced through the use of financial, customer, internal business, and learning and growth perspectives. KNC is one of the companies that is yet to maximize their supply chain performance.
With its products being consumed both locally and in international markets such as U. A, Japan and Germany, the company still faces challenges that inhibit its performance.
According to Mogeni there is increasing demand for KNC products from importing countries such as U. A,Japan and Germany hence the need to increase production. Between the year and , U.
A doubled its local consumption and increased its imports more than four times without changing its production levels thus offering Kenya a huge market potential for macadamia nut Gitonga et al. Furthermore, having local competitors such as Jungle nuts and Equatorial nuts as well as in other countries such as South Africa and Guatemala Cabi, , there is need for the company to implement performance measures that ensure world class performance.
World Horticultural Trade and U. SA Export Opportunities indicated that KNC faces challenges relating to lack of consumer awareness, poor information systems, low purchasing power, high prices due to high processing costs and lack of government support as the government puts more emphasis on other food products such as tea, sugar and coffee. KNC can overcome these challenges by having a BSC that can improve its functions such as sourcing, production, storage, packaging and distribution in the supply chain that relate to the challenges.
For example, the BSC can overcome the challenge of high processing costs through the internal business perspective by having measures such as reduced order cycle time and efficient capacity utilization. An all rounded approach of the BSC can be used to capture the required production capacity, partnerships with stakeholders such as the Kenyan government, technological and demand capacity. The literature did not cover the BSC in manufacturing industries and specifically the food industry. In addition, there is little evidence of the BSC in regard to supply chain management.
Brewer and Speh provided a modified version of the BSC to measure supply chain performance in totality and not within a specific industry.
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Wongrassamee, notes that the BSC is not a template that can be applied to business in general or even industry wide due to different market situations, different product types and competitive environments that require different scorecards. Bigliardi and Bottani developed the BSC for the supply chain in food companies.
The case studies exploited in the paper validated the BSC model, but did not investigate its implementation in factual cases. The recommendations on the paper further suggested applying the model to test its suitability in a wide range of food companies. The study did not focus on the BSC in food companies in the Kenyan market. To determine the extent to which the balanced scorecard measures are used on supply chain performance at KNC ii. The study will be of significance to scholars, academicians, organizations in the food industry and the management and staff at KNC.
The study will assist the management and staff of KNC on how to better improve their supply chain performance using the balanced approach.