CRC – Construct Management and Control System for Diversified Group
China Resources [CRC] is one of the leading conglomerates in Hong Kong and the Chinese mainland, with assets of approximately HK$135 billion. The conglomerate is often heralded in China as an example of modern management. CRC’s core businesses include three primary areas: manufacturing and distribution of consumer goods; property; plus infrastructure and utilities. CRC started exploring balanced scorecard methodology to upgrade convention management system since 2002. Moving away from using a traditional budget-centered management system, CRC sought to combine an improved use of BSC with CRC’s internal 6S management system to establish themselves as a strategy focused organization. The result - management system changes from financial control to strategic control.

CRC started a pilot project with one of their profit centers – China Resources Microelectronics [CRM], and appointed eGate to implement BSC to upgrade the management system for their diversified businesses. With the efforts of eGate consultants and project team, we combined new elements of the BSC system with the existing management system to form a new fully integrated top-level management system controlling six key management sub-processes. The change in management system focus (from independent silos to integrated horizontal processes) forced substantial changes in information flow through the system, especially in the areas of business strategy and performance appraisal.

BSC then became the most important management tool in CRC for strategic control of SBUs, and all SBUs adopted BSC to enhance internal management. CRM has achieved breakthrough results with BSC implementation, and financial results include:
     1. Increase turnover 7 times, to HK$1.45 Billion, compound annual growth = 72%
     2. Increase output per employee 97%, compound annual productivity improvement = 18%
     3. Improved operating profit, compound annual growth rate = 70% [since 2003]
     4. Improved inventory turnover to 3.69 (2005) from 1.62 (2001), compound annual improvement = 23%

Non-financial results include:
     1. Increased customer satisfaction rating to 81% from 72%
     2. Improved product yield to 97% from 72%
     3. Re-focus on the target customer, moving from lower-end domestic market to serving a group of customers          that are more global, bigger and with better credit rating and more stable recurring orders
     4. Better cooperation across CRC’s other business units
     5. Achieved Top 100 Electronic Enterprise For Quality in China
     6. CRHM,CRSM,CRMAT awarded as Top 10 in their respective fields 2004
     7. Wang Guoping, GM awarded Industry Leader of Chinese Semiconductor industry from 2003 to 2005

According to the group’s top executives, BSC scores highly in its capability for group management and control, “we need strategy and the balanced scorecard methodology to manage our diversified businesses. BSC is a scientific and powerful tool for any diversified group, and it can make profit center management easier. BSC clarified our group management process in an easy and practical way.”