A 'Balanced Scorecard' is FPIC's key to customer satisfaction

MANILA, Philippines - Over the past 40 years, First Philippine Industrial Corp. (FPIC) has been smoothly transporting through its underground pipeline system billions of liters of gasoline, diesel, jet fuel, fuel oil and other petroleum products to meet the needs of its various customers.

But even with such a high-stake business, the company has kept a relatively low profile, focusing instead on keeping its operations safe and efficient through a business strategy that is now drawing the attention of other firms.

FPIC is currently being managed by First Gen Corp., a company under First Philippine Holdings Corp., the investment holding firm for the power, infrastructure and property ventures of the Lopez Group.

The secret of its success, says company president Leonides Garde, lies in its “continued thrust to come up with better, more efficient and reliable service for all its stakeholders; and recently, the application of the company of an established business strategy called the “Balanced Scorecard.”

He says this business orientation is part of the Kaplan-Norton strategy management system developed by two company executives who were then taking their masteral degrees at the Asian Institute of Management.

It took them nearly a year to get used to the concept and by 2005, the Balanced Scorecard was formally included in the company’s strategic planning process.

Garde points out that the Balanced Scorecard is a system where the organization’s objectives are dispersed among four perspectives: learning and growth, internal processes, customer service and financial results. All these objectives have measurable targets to track accomplishment. 

He adds that the strategy has resulted in highly improved operations and performance. “Our small organization of less than 50 people has kept pipeline operations reliability at a remarkable 99.7 percent and on-time delivery at 99.8 percent.  Even the office secretary understands the importance of transmitting reports on time to make our customers happy.”

Moreover, he says the Kaplan-Norton system has allowed the company to balance the needs of all its stakeholders such as customers, employees, suppliers, communities, government and stockholders.

Customer satisfaction, which is at the forefront of FPIC’s operations, are continuously monitored.  Its customers, mostly the oil companies, are being asked to rate the company’s performance every month. 

The result of the survey, called the customer satisfaction index (CSI), now stands at a laudable 99.9 percent compared with a CSI rating of 74.8 percent six years ago prior to the application of the Balanced Scorecard busines strategy.

“That’s how FPIC ensures the steady, safe, efficient petroleum supply in Metro Manila on a 24/7 basis,” Garde notes. On the employees’ side, nearly 90 percent are now proficient in their jobs with the other 10 percent undergoing intensive training since they were either newly re-assigned or hired.  Employees particularly like the scorecard as a performance appraisal tool since the measurable targets removed the subjectivity or perceived favoritism in the past.

Wiith the success of the Balanced Scorecard, the company has started sharing the system on performance measurement, recently taking 30 principals and assistant principals from 15 small public elementary schools along the pipeline route. This came a week after FPIC sponsored a workshop for 30 teachers from the same schools on innovative ways of teaching mathematics to students.

On a larger scale, as its contribution to nation-building, FPIC has shared the company’s best practices, including the Balanced Scorecard, in more than 20 conferences since 2009.  These forums were organized by business, professional and academic institutions and attended by more than a thousand executives and business excellence practitioners.