Balanced Score Card and Strategy Map Company Brief: Company Name Activity Location Coverage Mother Network

Affiliate companies No. of employees Company functions

(Dec 2011)

: Maskem Egypt : Promotion, sales and distribution of chemicals and raw materials. : Cairo : Egypt and eastern Africa : Cairo, Alexandria, Dubai, Algiers, Casablanca, Amman : China, Belgium and France : 45 : Commercial (Import, sales, sourcing and suppliers relations) : Operations (Logistics, Finance, Human Resources and administration)

Environmental issues - With the recent economic and political issues in the coverage countries and worldwide, it became a fact that both customers and suppliers have changed their concepts and behaviors. - Customers tend not to keep stocks, not to risk purchasing in foreign currency, - Suppliers tend to sell only in cash, to sell to distributors rather than end users, - For Maskem Egypt to survive and grow it became a must to seek a new, and the right value to deliver for both customers and suppliers.

Setting new financial and marketing objectives - Maintaining a yearly profit growth rate between 5 - 10%. - Profit Growth rate = 5 - 10% per year This could be achieved by: - Increasing sales volumes (though of lower sales prices) to assure higher EBIT Average 10% sales increase per year for the first two years. - Optimizing Operating costs (though of the higher budget for purchases and personnel development) 2-4% less financial and logistics costs. - Enlarging customer base and market presence to assure long term survival and growth. - Add new 10 active customers per year for the first two years - Increase volumes distributed by 10% per year in the first three years

Marekt and Financial objectives breakdown - Making the products available locally - Supports customers spot needs for whatever quantities at whatever time. - Encourages suppliers to sell with low credit risk. - Being a one-stop shop for our customers - Saves customers the effort, and saves Maskem transport and logistics costs. - Gives Maskem the power over competitors through offering bundle products and average prices. - Attracts more suppliers to Maskem. Suppliers usually prefer distributors with complementary product range. - Focusing on customers satisfaction and suppliers relationships - Assures more sales chances and wider product range available at good conditions. - Grants long-term survival and growth. - Optimizing logistics and finance operations - Saves Operating costs - Allows better service to customers. - Optimizing logistics and finance operations throughout the group network. - Creating coordination teams for exchanging experience and enhancing decisions. - Allows better cost structure and customer service. - Grants better financial support from banks and investors. - Strengthens position with new suppliers. - Helps exchanging experience and increasing participation of all employees levels (Learning Organization)

Operational Action Plan On the subsidiary level - Forming customer satisfaction and suppliers relation teams. - Developing the sourcing activity for complementary products and alternative suppliers. - Increasing the sales team customer visits and contact rate. - Allocating more finance to distribution activity. - Supporting the logistics team with new practices for cost optimization. (local transport sourcing, understanding clearance and legislation, ) - Supporting the finance team with new practices for cost optimization. (negotiating bank expenses, interest rates, sourcing credit services, )

On the group level; commercially - Assigning the roles of Supplier Coordinators for stronger presence as group and not subsidiaries with suppliers. - Forming Market Coordination Teams for exchanging industry & product experience and saving repeating bad experiences. - Centralizing purchases for better prices and cost structure. On the group level; operationally - Creating logistics or financial hubs in countries with easier legislations and tax laws. - Targeting global finance and banking deals through subsidiaries with stronger financial position

Employees competences required: - The believe in customer satisfaction as a core cultural concept. - The ability to form and act in different teams and groups. - Highly motivated and dynamic sales staff, with good industry background and closeness to customers. - Sourcing & purchasing candidates with high negotiation & communication skills, and exposure to the latest search & networking trends within reliable sources. - A change oriented & team leader commercial manager to integrate new functions and apply the right control level. - Competent finance officers with exposure to the market's latest trends and high negotiation skills. - Skilled and knowledgeable logistics team, well connected to resources and official authorities.

Human resources action Plan - Reviewing sales team appraisal and compensation for customer visits, satisfaction and new added customers. - Reviewing the purchasing (& sourcing) officers appraisal for new suppliers, supplier satisfaction & sources diversification. - Reviewing the logistics and finance teams appraisals for new tasks' requirements - Arranging for new training requirements (logistics team, finance team). - Selection of "Customer Satisfaction" and "Supplier Relation" teams & setting the team objectives and compensation plans. - Hiring new sourcing and supplier relations coordinator. - Coordinating with group HR managers for selecting, conducting the needed training and adjusting the compensation of global Suppliers and Markets Coordinators. - Ensuring spreading the required organizational culture & learning perspectives (customer satisfaction, self-development )

STRATEGY MAP
MASKEM EGYPT
Corporate goals FINANCIAL (30%)
Optimize Operating costs (24% less financial & logistics costs) Increase sales and volumes distributed by 10% per year in the first three years. Maintain profit growth tendency between 5 & 10% Enlarge customer base and market presence.

CUSTOMER (35%)
Add new 10 active customers per year for the first two years

Operational goals &action plan (15%)

Optimize logistics & finance costs at the subsidiary level (2-4%) Optimize logistics & finance operations at the group level Strengthen Marketing & Supplier relations at the group level Be a one-stop shop for customers Make products more available locally Focus on customers satisfaction & suppliers relations

Apply new logistics practices

Apply new finance practices

Allocate more finance to distribution activity

Develop the sourcing activity

Assure more customer visits and contacts

Build a suppliers relation monitoring team

Build a customer satisfaction monitoring team

Optimize logistics & finance operations at the group level Optimize logistics & finance operations at the group level

Forming Market Coordination Teams at the group level

Assigning the roles of Supplier Coordinators for the group

Centralize purchases at the group level

Learning & Growth Perspectives (20%)

Focus on technical needs for cost optimization Cost saving is everyone' responsibility Think globally - act locally Efficiency of work teams structure Distribution is the key for value creation Supplier partnership culture Customer satisfaction culture

By: Mohamed Mokhtar

MASKEM EGYPT - Strategy Map and Balanced Scorecards

SAMPLES OF MASKEM EGYPT BALANCED SCORECARDS

CUSTOMER (Sales) Objective Increasing Sales Volume Adding new customers Increasing customer satisfaction KPI(s) Sales increase in volume compared to previous year Count of new active customers. Active customer to do 2 consequent purchases or three irregular purchases within a year. Percentage of unsatisfied customers (scale D & E in the customer satisfaction form) Percentage of satisfied customers (Scale A in the customer satisfaction form) Target +10% +10 =< 05% => 45% Results Q1 Q2 Q3 Q4 YTD Full Year

OPERATION (Logistics) Objective Optimizing local transport cost Reducing goods damages in stock Delivery per schedule KPI(s) Reduction in transport cost per kg*km transported. Percentage of weight damaged Percentage of delayed deliveries Total number of days delayed Target 5% =< 0.1% Results Q1 Q2 Q3 Q4 YTD Full Year

SAMPLES OF HR Dashboards for demonstration and future reference

By: Mohamed Mokhtar

MASKEM EGYPT - Strategy Map and Balanced Scorecards