Key objectives and performance measurement The fishing products industry LQ1,2, 3 has five key objectives:

1. Keep costs down so that prices can be kept down.

2. Ensure that products meet stated, or expected, quality standards.

3. Ensure that the assigned quota of each species is harvested.

4. Ensure that the fish that are harvested are handled and processed in a way that maximizes their retail value.

5. Support growth by developing new products that are appealing to cus¬ tomers.

There are unique conditions affecting the fishing industry. Harvesting is constrained by two factors. A government regulatory agency sets quotas for each species of fish. The quotas specify the maximum amount of each species of fish that can be caught and the permissible fishing period. Because of equipment failure, weather conditions, and stock depletion, most firms are unable to catch their assigned quota of any given species.

Care has to be taken at each step in the process of harvesting and trans¬ porting the fish. During harvesting, too many fish in the nets causes the fish to be crushed and bruised, resulting in a loss of quality. Fish begin to deteriorate the moment they are caught. Therefore, care has to be taken to pack fish in ice in the ship's hold. Similarly, when fish are discharged from the ship's hold into the processing plant, care has to be taken to ensure that they are not damaged or bruised.

The Organization as a System of Activities Within the processing plant, care has to be taken to ensure that fish are processed rapidly to prevent deterioration, carefully (to ensure that quality standards relating to color, form, and lack of parasites are met), effectively (to ensure that bones, skin, and blood are not left in the fish, and conversely, that excessive amounts of flesh are not removed with the bone), and efficiently (since many of the operations are manual, labor costs are significant).

The Primo Fishing Products Company (PFPC) is organized into three re¬ sponsibility units: (1) harvesting (the fleet of company-owned ships and their crews used to harvest various species of fish); (2) processing (the processing plants used to process raw fish into the fresh, frozen, and cooked products wanted by the company's customers); and (3) marketing (responsible for creat¬ ing the demand for the company's products).

Currently, the performance of each of the three responsibility units is eval¬ uated as follows:

REQUIRED Assess the current system that is used to evaluate the performance of each re¬ sponsibility center at PFPC. Make suggestions for any improvements.
LO 1, 2, 3, 4

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UNIT Harvesting Processing Marketing PERFORMANCE EVALUATION Tons of fish caught Costs relative to standards adjusted for actual volume Sales increases over the previous year