JAMALCO, THE Clarendon-based alumina company, is reporting significant reduction in operating costs and an improvement in productivity in the three years since the company adopted the new strategic management system, the Balanced Scorecard in 2000.
The company's productivity measure on maintenance work, sampling for the last quarter ending 2003, surpassed the international industry benchmark by four percentage points to stand at 59 per cent. Man-hour to produce each tonne of alumina also saw a more than 50 per cent improvement over the last three years.
The performance review was included in a case study presented by Sharon Boucher-Brown, finan-cial controller at JAMALCO, at a luncheon for corporate executives attending a recent one-day seminar conducted by the co-architect of the Balanced Scorecard, Professor Robert Kaplan.
The seminar at the Jamaica Pegasus Hotel, was organised by local business consultants, Growth Facilitators and their Atlanta-based counterpart, Knowledgeworks.
In 1999, operating costs at JAMALCO's Halse Hall plant were among the highest in the Alcoa Group worldwide, there was significant waste and productivity levels stood at two man-hours per per tonne, or approximately three times lower than other processing locations.
"While we joined other Alcoa companies worldwide, in implementing the Balanced Scorecard model and pursuing our primary goal of being a low-cost supplier of alumina, JAMALCO customised the core values identified at Group level, in order to make them more relevant in our specific context," Mrs. Boucher-Brown explained.
For example, timeliness in the execution of all procedures was an area of particular concern for the local company, in order to improve the quality of service to both internal and external customers.
PRIORITY AREAS
JAMALCO highlighted five priority areas in developing its Balanced Scorecard programme. These were environmental health and safety; human resources, including suppliers and contractors, with an emphasis on engaging the right people for the right job; customer satisfaction; manufacturing efficiencies through waste elimination and community and government.
The challenge of waste reduction was translated into simple, easily understood terms, so that employees could understand, for example, that a tap left running for one hour would affect company profits and their salary increase, the financial controller noted. The company also introduced a daily on-line information cost system through which employees can monitor the operational costs in each area, against the budget.
"Now staff feels a sense of ownership and workers on the shop floor can speak confidently about costs and return on capital...and the productivity incentive, linked to the five areas of the BSc, has promoted further desire to achieve and exceed goals," Mrs. Boucher-Brown observed.
She emphasised that the Balanced Scorecard facilitated integration of the strategic management process, with all employees working together to achieve the critical success factors and the company's leadership serving as coaches and mentors.
"The environment allows us to continuously evaluate our performance and share ideas on ways to correct deficiencies in the operation. The BSc empowers you to take charge of your organisation and I believe that Jamaicans can do this successfully," she said.
