Sitting on 50-plus year old ION Tyres, the Kolkata-based tyres and tubes manufacturing company with a turnover of more than 1,000 crore, both A.K. Mathur, the Chairman and Raman Kumar, the CEO are searching for solutions to problems which their company started unfolding.
Financial performance of ION Tyres, is poor as reflected in its falling PBT. Performance gap between the top performer in tyres and tubes and ION Tyres ranges from 4 per cent to 5 per cent. The company has aging managerial people and equally old plant and equipment. High cost of production keeps the company in a disadvantaged position. “Boss is always right” culture has permeated the entire organisation killing initiative and innovativeness. There is slackness, laxity and complacency everywhere. Common thread binding all the departments is missing. Each department is a stand alone entity.
There are positives nevertheless. ION Tyres and tubes are famous world-wide for durability, and superior quality. The company offers a wide range of bias tyres and tubes catering to all user segments like heavy and light commercial vehicles, motorbikes, scooters, and autos. The firm has state-of-the-art radial plant. The client list of ION comprises several big guns in Indian corporate sector. Tata Motors, Hero Honda, TVS Motors, Mahindra and Mahindra, L&T, Eicher, Swaraj Mazda, Maruti Udyog and Bajaj are the regular patrons of ION. The company also has foreign presence with USA, UK, S. Africa and Asian countries regularly buying ION’s tyres and tubes.
ION seems to have everything going in its favour. It is the market leader in the Indian market enjoying 19 per cent of the market share;
manufactures 5.6 m tyres per year, has a network of 50 regional offices with over 4,000 dealers and 180 C&F agents.
Suddenly both Chairman and CEO have realised that there are too many road blocks ahead of them and the journey is going to be rough and bumpy.
Realisation dawned on Mathur and Raman Kumar way back in 2001 when they both attended a two-day seminar on “Enhancing Organisational Capability through Balanced Scorecard” organised by CII at Kolkotta. The duo had personal talk with Sanjeev Kumar, the then Chairman of CII. They are now convinced that Balanced Score card is ideal performance assessment tool that could be used in ION with greater benefits.
Mathur and Raman Kumar acted fast. They soon organised a workshop on “Balanced Scorecard” to educate in-house managers about the concept and the procedural aspects of its implementation. There was initial resistance to accept the scorecard as the managers felt that they were already burdened since they were busy implementing other quality improvement initiatives. Deliberations in the workshop changed them.
They are now convinced and enthusiastic about the positives of the scorecard. They are ready to implement the system.
A two-member task force was constituted comprising Director—HRD and G.M.—Strategy and Planning. The task force travelled to all the three factories as well as zonal headquarters to unfold the implementation of the scorecard. The scorecard principles were implemented successfully from November 2002 and completed by March 2003. Figures 24.6 to 24.9 show the scorecards adopted by ION Tyres.
Outcomes of scorecard implementation have been very encouraging.
PBT improved and the gap between ION Tyres and the toppers in the industry reduced by 50 per cent. A transparent and objective performance assessment system came to be kept in place. With inertia and the ennui being broken, both Mathur and Kumar felt galvanised and realised that the road ahead of them was no more bumpy and rough. Thus, solutions to the problems were found.

Questions
1. Do you agree with the conclusion drawn at the end of the case that scorecard system has galvanised ION Tyres? In other words, does scorecard system deserve all the credit?
2. Will quality improvement initiatives clash with scorecard implementation? If yes, how to avoid the clashes?

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Financial "To succeed financially how should we appear to our shareholders" Fig. 24.6 Customer To achieve our vision, how should we appear to our customers Fig. 24.7 Objectives To achieve turnover of 1850 crs by FY05 Objectives Improvement in cus- tomer satisfaction Monsuro Sales turnover PBIDT Measure Customer sat- isfaction survey (by external agency) Target . To achieve tum- over of 1850 crs by FY05 PBIDT of F150 cra (FY05) Decrease in conversion cost from 25 to 21/ kg in Bhopal plant and 28 to *25/kg in Mysore plant Target To improve from 65% to 70% Customer en- gagement at 30% Initiatives Develop acceptablo 1000- 20 lug tyros Increasing number of sales offices from 180 to 220 7 day work week to be introduced at the Bhopal plant Improve fuel wastage and ensure lower power consumption VP Tochnology and MD to initiate technology tie ups Initiatives . Claim settle- ment to be reduced from 8 to 2 days Improvement of casing value of used tyres, atleast by 15% Cost per Kilo- meter of tyre comparable to competitors