SECTION E – PERFORMANCE EVALUATION AND CORPORATE FAILURE
QUESTION 01- ZORIS
Zoris is an overnight parcel delivery business. Since it was founded by the current CEO, it has grown rapidly due to a boom in online shopping. It now operates 1,000 delivery vehicles of various sizes. Recently, financial performance and market share have deteriorated. Zoris has had no clear corporate vision, an excessive focus on financial objectives and inadequate systems to measure and manage performance of the underlying processes driving its financial performance.
Zoris’ collection and delivery service uses delivery vehicles to transport parcels to and from local depots and individual addresses. Vehicles may also pick up parcels from the addresses to which they deliver. Each time the vehicle calls to pick up or deliver parcels is known as a stop, and the time of day for each stop is booked in advance. At the end of each day, vehicles, along with any parcels not delivered, return to the depot. Regardless of who pays for the service, Zoris regards anyone to whom it delivers, or from whom it picks up parcels, as a customer. In the long term, the requirements of both of these groups for a competitively priced, reliable and flexible service will be similar.
Performance improvement proposals
The CEO believes that reductions in customer satisfaction and flexibility, caused by a decline in operational performance, may have led to the recent deterioration in financial performance and market share. It has been suggested that Zoris use the Lynch and Cross performance pyramid (Appendix 1) to reverse this deterioration, and three new measures for operational performance have been suggested in Appendix 2. The CEO has stated that Zoris’ corporate vision should be:
‘To increase shareholder wealth by becoming the leading overnight parcel delivery business, providing quality, reliability and value for customers.’
It is also proposed to use the DMAIC (define, measure, analyse, improve and control) method to implement the six-sigma methodology to improve the quality of delivery. Two measures have been defined in Appendix 3 which may help improve Zoris’ delivery performance.
a. Advise the CEO how the Lynch and Cross performance pyramid can help Zoris achieve its corporate vision.