COORS BALANCED SCORECARD: A DECADE OF EXPERIENCE
Hugh Grove University of Denver Tom Cook University of Denver Ken Richter Coors Brewing Company
By the end of 1997, Coors had finished the implementation of a three-year Computer Integrated Logistics (CIL) project to improve its supply chain management. Coors defined its supply chain as every activity involved in moving production from the supplier’s supplier to the customer’s customer. (Since by Federal law, Coors cannot sell directly to consumers, Coors customers are its distributors whose customers are retailers whose customers are consumers.) Coors supply chain included the following processes: ...view middle of the document...
filling routine customer (distributor) orders, 5. filling rush orders, and 6. moving beer from production through warehouse to distributors before the beer spoiled. (The shelf lives for Coors products were 60 days for beer kegs and 112 days for all other beer packages.) Matt Vail, head of Coors Customer Service department, had been the CIL project leader since the inception of this project. He had developed such expertise with supply chain management that he had just been hired by a supply chain, consulting firm. In early 1998 on his last day of work for Coors, he was talking with Ken Rider, head of Coors Quality Assurance Department.
IM A Ed u c AtIo nA L c A S E JournAL
VOL. 1, N O. 1, ART. 5, MARCH 2008
Ken had just been placed in charge of the new balanced scorecard (BSC) project at Coors. The initial motivation for this project was to assess whether the supply chain improvements were being maintained. However, the project was broadened to become a company-wide BSC. Accordingly, the project strategy was to implement a performance measurement process that: 1) focused upon continuous improvement, 2) rewarded reasonable risk taking and learning to improve performance and 3) enabled employees to understand the opportunity and reward for working productively. Matt: The supply chain management project was really challenging and rewarding. I hate to leave Coors but the consulting firm made me such an attractive offer that I could not refuse it. I hope you have such positive experiences with this follow-up balanced scorecard project. Ken: This new project will be a real challenge. We need to build upon all the improvements made by your supply chain project. Matt: My project team was excited to see that our CEO discussed the supply chain project in his 1997 shareholder letter. He said that significant productivity gains in 1997 were due to our project that streamlined purchasing, brewing, packaging, transportation, and administration of the supply chain. Ken: Perhaps an economic value added (EVA) analysis could be done to assess these supply chain productivity gains. Matt: That’s an interesting idea to analyze performance in the financial quadrant of the balanced scorecard with EVA. Ken: Another challenge for my project is how to translate the Coors vision statement and related business strategies into operational performance measures. Matt: You also need to identify any gaps between the vision statement, business strategies, and current performance. Ken: Do you have any experiences from your project that I could use? Matt: Well, we did obtain some benchmarking data to develop targets for some performance measures for our supply chain project. I can give you these measures but they are limited due to confidentiality problems in obtaining such data. Maybe Coors should join one of the commercial benchmarking databases. Ken: Thanks. I am also aware of certain employee resistance to developing a new set of performance measures for this balanced...