ACCY 304: Homework for Session 19 due by 8AM on 11/2 (Th)
John Drake / 8am
In this session, we are learning about Balanced Scorecard (BSC), which was one of the most innovative
thoughts in accounting in the past century. (Actually, R. Kaplan and D.
Norton, the inventor of Balanced Scorecard, were awarded with the
Notable Contribution to Management Accounting Award, and R.
Kapan was inducted to the Hall of Fame in Accounting thanks to BSC.)
After carefully reading the assigned part of the Bloomfield text as in the syllabus, practice constructing a
balanced scorecard for Triple S-C Co. described below. In designing its
balanced scorecard, list the four perspectives of BSC in the order
described in the text, because the order of the perspectives matters.
Also, try to ensure that the linkage among each perspective of the
balanced scorecard you design makes senses, such that the TA
grading your work can easily understand that your own balanced
scorecard corresponds to important processes that Triple S-C should
execute to implement its strategy. You may want to consider including
2-4 measures for each perspective. I would like to encourage you: (1)
to firmly understand what BSC is about from the assigned article (i.e.,
perspective; the concepts of objectives,
measures, targets, and initiatives in BSC) and (2) to try building a BSC
that can align performance evaluation measures along with the firm's
strategy. (For brevity, we do not include targets or initiatives in this
Feel free to discuss with your colleagues about this HW, but
never copy others' work.
Traditionally, steel purchasers fall into one of two groups. Very large customers such as automobile and
appliance manufacturers fall into the first category. These customers purchase steel from mills and have
it delivered to processors for cutting to specification. They might also buy direct from one or more of the
approximately 3,500 steel processors or from wholesalers (normally called service centers). In all three
instances, the cut steel is delivered to the customer, often on a just-in-time basis. The second group
comprises smaller-volume firms such as metal stampers and fabricators. Firms that make equipment,
agricultural tools, and heating and air conditioning units also fall into the second group. These small to
midsized companies, which purchase steel as both contract customers and spot buyers, but in relatively
small quantities, also tend to have extensive needs for special alloy steels and odd sizes. For the past
decade, the variety of the steel demanded has steadily trended up, while the average lot size has
trended down. These trends, which partly reflect increased customization and the growth of the
just-in-time philosophy, are expected to continue, if not accelerate.
Triple S-C's founder, Remus Illies, worked at a major steel manufacturer (and was considered a rising star
until he quit). Remus realized that the bulk of the distribution industry revolved around coordinating
action. Managing information flow is key. Remus therefore set up Triple S-C, which does not own any
warehouses or processing facilities. Instead, Triple S-C is a coordinator that buys the steel, has it
processed, and has it delivered to the customer. In the process, Triple S-C might deal with as many as six
separate entities. Triple S-C maintains an extensive list of firms in the steel supply chain. It has also
negotiated prices and terms with many long-standing partners.