Coors: Balanced Scorecard Essay

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Coors is a family owned business in the beer industry offering 16 different kinds of beers in the US market. Coors has 3 production plants in the US with its Colorado plant being the largest brewery in the world and serving 70% of the US market. Coors has implemented a supply chain management (SCM) software solution from the Computer Integrated Logistics (CIL) project to solve urgent problems in the logistical area such as meeting seasonal demand, surges from promotion and introducing new brands each year. Other issues addressed by the CIL project were filling routine customer orders, filling rush orders and shipping beer to distributors before it was spoiled. The project’s objective was to increase the company’s profitability by reducing …show more content…
EVA is a superior financial measure compared to other financial measures, such as Return on Investment. We recommend Coors to use EVA in combination with the non-financial measures from the BSC project. Furthermore, we recommend the BSC to be drilled at functional unit level, to. ensure that the performance measures are understandable and controllable for each employee. However, we suggest that EVA should not be used at a lower functional level as employees might not understand the concept of economic profit. For example, a production line supervisor can be measured against the load scheduling and load accuracy performance measures. EVA can be used to analyze the success of higher level management. In summary, BSC if implemented correctly, translates Coors strategy into a comprehensive set of performance measures that provides the framework for implementing its strategy successfully throughout the company.

Appendix:

Exhibit 1: Benchmarking analysis

Exhibit 2: Key performance measures

Table 1: New performance measures and initiatives for effective & operational BSC for Coors

EVA Calculations
Table 2: EVA Adjustments EVA adjustments | | | | Capital | Income | Advertising Costs - 3 year life | 900 | 300 | LIFO reserve | 45 | 3 | Deferred income Tax liability | 65 | 10 | Capitalization of operating leases | 30 | 5 | Net interest expense | 0 | 12 |
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