The Role of Balanced Scorecard in Measuring Supply Chain Performance: A Study Of National Oil Corporation Of Kenya

A Research Project Report Submitted to the Chandaria School of Business in Partial Fulfilment of the Requirement for the Degree of Masters in Business Administration (MBA)The general objective of this study was to examine how the implementation of the Balance scorecard has affected Supply Chain Performance at National Oil Corporation. The specific objectives were to evaluate the effect of customer perspective on supply chain performance, measure the contribution of financial perspective on supply chain performance, evaluate the effect of internal processes on supply chain performance, and assess the influence of learning and growth perspective on supply chain performance. The research design selected for the study was descriptive research. Descriptive research uses data gathered on a group to describe or reach conclusions about the group under study. For the purpose of this study, the parameter was the employees of the corporation under study. National oil has a total number of two hundred and twenty-three (223) employees. The study focused on employees in Strategic Planning, Customer service, Finance, supply planning, operations, and marketing, procurement and Business Continuity departments. The mentioned departments were chosen for the study because they are in the direct line of the variables under study. The study selected stratified random sampling for collection of quantitative data and purposive sampling where individuals in senior management were selected to provide an in-depth knowledge about the variables under study. For the descriptive study 30% of the sample frame was selected as the sample size targeting 43 respondents, while for the qualitative data a sample size of 4 employees were selected for the purposive study. Quantitative data was collected using a structured questionnaire for the quantitative data, which was administered via online data collection tool called Google forms. The questionnaire/google form was directed to employees of the sample size of 43. The questionnaire encompassed twenty one questions. Qualitative data was collected with the help of an interview guide administered by recording the interview and also through an online based data collection tool, google forms; the list of questions were semi-structured. These questions gave attention to the variables under study. Data was analyzed using inferential method whereby hypotheses of the independent and dependent variable was analyzed by use of correlation coefficient from which a relationships were tested using the Pearson product-moment correlation. An independent t-test was also used to compare the independent variables under study. The reasonableness behind the selected data analysis methods was to search for relationships or correlations between and among vi variables under study. Descriptive Statistics was used to measure and compute each variable of data; and was done through use of measures of central tendency (mean, mode, median), measures of dispersion (standard deviation). Effects of customer perspective on supply chain performance being the first objective revealed that the service charter is an important tool for ensuring service delivery is efficient to ensure customer satisfaction. Majority of the respondents knew about their departmental service charter, which indicated that service delivery is an important aspect to customers. The study also measured respondent’s involvement on use of the BSC as a tool of maintaining customer relationship with the corporation, and an average number said the BSC was slightly involved while a smaller percentage of respondents said the BSC is not involved in service delivery. The second objective, the effect of internal processes on supply chain performance, proved that the departmental policies and working instructions are indeed aligned to corporate strategy. Most respondents agreed that they understand the procedures that affect their department and that departments review and reassess the processes whenever there are service delivery difficulties. Respondents were asked the measure used in assessing their adherence to policies and procedures, the highest percentage acknowledged that evaluations are done both qualitatively and quantitatively. From the analysis of the contribution of financial perspective on supply chain performance as the third objective, it was established that respondents agreed that revenue collection is done in a timely manner and that financial audits are done and communicated by the corporation management, which is an indication of transparency, by the management team. respondents agreed to the fact that constant monitoring of debtors and adherence to credit limit policies are observed and that there is accountability for petty cash. Analysis of the fourth objective, influence of learning and growth perspective on supply chain performance, this being the perspective that provides feedback through reviews; as shows what was well done and what needs improvement. Respondents were therefore asked to provide the extent to which they acknowledged certain aspects touching on their learning and growth within the corporation. It was noted that most of the respondents agreed that their skills and capabilities drive improvement of the organization. Of all the vii respondents, most agreed that performance appraisals are done as scheduled in the corporate plan. In conclusion, the effects of customer perspective on supply chain performance is highly influenced by the customer relationship management. Customers should be involved in decisions that affect them. Internal processes that work for the organization lead to increase in supply performance. Policies are therefore important as they can be the basis of measuring performance. A focus on the financial performance expected serve as crucial yardstick upon which supply chain performance is measured, this is a just contribution of financial perspective to supply chain performance. Learning and growth perspective defines the core competence, skills and the corporate culture needed to support the organization’s strategy, training of employees should be considered to reinforce employee capability. Recommendation was made on customer retention with the need to constantly carry out customer satisfaction survey. Formal documentation of customer complaints ought to be observed, officially handled and feedback given, these are important aspects in ensuring good performance on supply chain performance. For internal processes, firms need to undertake regular reviews of their policies and processes to establish if the policies are working and if they are strategically aligned to the overall objectives of the firm. The study confirmed that there is a high correlation between sufficient budget and supply performance. There is need to ensure financial information is communicated to encourage transparency by management. Finally, to measure the influence of learning and growth perspective on supply chain performance, the perspective needs to clearly bring out the organizations’ core competence, skills and corporate culture needed to support the organization’s strategy