ROI Case File No.298 | 'MeatSupply's Invisible Growth Impediment'

Chapter One: The Limit of Paper—Expanding Organization, Management Can't Keep Up

The week after Netwise's KPT case was resolved, a consultation arrived from Kanagawa regarding a meat wholesale company's inventory management. Episode 298 of Volume 24 "Proof of Reproducibility" is a story of going beyond mere systemization to draw an organizational growth scenario.

"Detective, our inventory management is at its limit. We've done paper ledgers for 20 years. But employees increased, business partners increased, and manual work can't function anymore. We want to systemize, but we don't know what purpose to pursue or how to proceed..."

Kenichi Sato, operations director at MeatSupply, a native of Yokohama, visited 221B Baker Street unable to hide his confusion. In his hands were handwritten inventory ledgers and, in stark contrast, a blank proposal document written "Systemization Consideration."

"We operate meat wholesale in Kanagawa. We deliver to restaurants, supermarkets, and food processing companies. Since founding, inventory management has been paper ledgers. But it's at its limit now."

MeatSupply's Inventory Management Crisis: - Founded: 2003 (meat wholesale) - Annual revenue: ¥850 million - Employees: 28 (12 five years ago) - Business partners: 180 companies (78 five years ago) - Inventory management method: Paper ledgers (handwritten) - Inventory confirmation time: Average 3 hours daily - Misshipments: Monthly average 8 cases - Inventory discrepancy: Average 2.8% in monthly stocktaking

There was deep anxiety in Sato's voice.

"The problem is with paper, we can't know 'what and how much we have now' in real-time. Even checking inventory at 8 AM, it decreases with shipments by noon. But ledger entries happen in evening. Meanwhile, sales respond to customers with old information."

Typical Failure Case:

10:00 AM: Customer A: "Can you deliver 50kg beef round tomorrow?" Sales: "Morning inventory shows 60kg available, so no problem."

1:00 PM: Ship 40kg beef round for different Customer B's order

3:00 PM: Warehouse inventory check: 20kg remaining (30kg short for Customer A's 50kg order)

Result: Apologize to Customer A, emergency procurement from other companies, zero profit

Monthly Impact: - Misshipments: 8 cases - Emergency procurement: 5 cases - Customer apologies: 13 cases - Opportunity loss: Estimated ¥1.8M monthly

"Management says 'systemize.' But what should we aim for with systemization? I think just 'digitizing paper' is meaningless..."

Chapter Two: Four Perspectives—Strategy Design Beyond Efficiency

"Mr. Sato, what purpose is current systemization consideration based on?"

To my question, Sato answered.

"The purpose is 'efficiency.' Reduce inventory confirmation time. Reduce misshipments. That's all. But with just that, I can't convince management. When asked 'Is there effect worth the investment?' I can't answer."

Current Consideration (Mere Efficiency): - Purpose: Reduce work time - Effect: Inventory confirmation time decreases - Problem: ROI unclear, can't see connection to organizational growth

I explained the importance of strategic systemization.

"Systemization is means. BSC—Balanced Scorecard. Financial, Customer, Business Process, Learning and Growth. Drawing strategy with these four perspectives transforms mere efficiency into organizational transformation scenario."

⬜️ ChatGPT | Catalyst of Conception

"Don't end with efficiency. With BSC, transform systemization into growth strategy"

🟧 Claude | Alchemist of Narrative

"Inventory management is means. True purpose is protecting customers, nurturing organization, creating future"

🟦 Gemini | Compass of Reason

"BSC is strategy map. Draw causal relationships with four perspectives: Financial, Customer, Process, Learning"

The three team members began analysis. Gemini deployed the "Balanced Scorecard (BSC) Framework" on the whiteboard.

BSC's Four Perspectives: 1. Financial Perspective: Contribution to profit and revenue 2. Customer Perspective: Customer satisfaction and trust improvement 3. Business Process Perspective: Business efficiency and quality improvement 4. Learning and Growth Perspective: Talent development and organizational capability improvement

"Mr. Sato, let's strategically design MeatSupply's inventory management renewal with BSC."

Chapter Three: Causal Chain—Growth Story Woven by Four Perspectives

Phase 1: Learning and Growth Perspective (Foundation)

BSC builds from bottom. First is "Learning and Growth."

Current Issues: - Inventory management staff: 2 people (in their 50s, used to paper) - Young employees: Comfortable with IT but not entrusted with inventory management - Knowledge siloed: When veteran 2 take leave, inventory becomes unknown

BSC Design:

Goal (Learning and Growth): "Create state where all employees can use inventory management system"

Measures: 1. Training before system introduction (2 months) 2. Manual creation and OJT 3. System where veteran 2 teach young 5 4. Expand "inventory management team" to 7 people

KPI: - System operation proficiency: 100% (all can operate independently) - Knowledge transfer to young staff: 5 people able to handle inventory management

Causal Relationship: "If talent develops → Business process improves"

Phase 2: Business Process Perspective (Execution)

Next, design "Business Process."

Current Issues: - Inventory confirmation: 3 hours daily (manual) - Inventory accuracy: 2.8% discrepancy in monthly stocktaking - Misshipments: 8 cases monthly

BSC Design:

Goal (Business Process): "Grasp accurate inventory in real-time"

Measures: 1. Introduce inventory management system - Barcode management for incoming/outgoing - Real-time inventory update - Sales can check inventory on smartphone 2. Analyze and improve inventory discrepancy causes 3. Automate pre-shipment double-check

KPI: - Inventory confirmation time: 3 hours daily → 10 minutes (95% reduction) - Inventory accuracy: 2.8% discrepancy → 0.3% (90% improvement) - Misshipments: 8 monthly → 0.5 monthly (94% reduction)

Causal Relationship: "If business improves → Customer satisfaction increases"

Phase 3: Customer Perspective (Value)

Next, design value to "Customer."

Current Issues: - Customer complaints from misshipments: 13 monthly - "Said inventory available, but actually wasn't" - Customer satisfaction: 3.6/5

BSC Design:

Goal (Customer): "Gain customer trust with zero misshipments"

Measures: 1. Sales checks real-time inventory and responds 2. Complaint reduction through zero misshipments 3. Trust improvement through accurate delivery date responses

KPI: - Customer complaints: 13 monthly → 1 monthly (92% reduction) - Customer satisfaction: 3.6 → 4.8 - Repeat rate: 68% → 85%

Causal Relationship: "If customer satisfaction increases → Revenue and profit increase"

Phase 4: Financial Perspective (Result)

Finally, design impact on "Financial."

Current Issues: - Opportunity loss: ¥1.8M monthly (misshipments, stockouts) - Emergency procurement cost: ¥250K monthly - Inventory management personnel cost: ¥480K monthly

BSC Design:

Goal (Financial): "Reduce inventory management costs, expand revenue"

Measures: 1. Opportunity loss reduction 2. Emergency procurement reduction 3. Inventory management efficiency reducing personnel cost 4. Transaction expansion through customer satisfaction improvement

KPI: - Opportunity loss: ¥1.8M monthly → ¥200K monthly (89% reduction) - Emergency procurement cost: ¥250K monthly → ¥30K monthly (88% reduction) - Inventory management personnel cost: ¥480K monthly → ¥280K monthly (42% reduction) - Annual revenue: ¥850M → ¥1.02B (+20%)

ROI: - System investment: ¥12M - Payback period: 8.2 months

Phase 5: BSC Strategy Map Completion

Connected four perspectives with causal relationships.

[Financial]
Revenue expansion, cost reduction
↑ (Causality)
[Customer]
Customer satisfaction improvement, trust acquisition
↑ (Causality)
[Business Process]
Inventory accuracy improvement, misshipment reduction
↑ (Causality)
[Learning and Growth]
All-employee system proficiency, knowledge sharing

Sato's eyes lit up.

"This isn't mere systemization. It's the organizational growth strategy itself."

Chapter Four: Strategy Execution—BSC-Guided Transformation Story

Phase 6: BSC-Based Execution (12 months)

Months 1-2: Learning and Growth Phase - System selection and customization - Knowledge transfer from veteran 2 → young 5 starts - Training program implementation

Months 3-4: Business Process Improvement Phase - System full operation - Barcode management introduction - Real-time inventory confirmation starts

Months 5-8: Customer Value Improvement Phase - Misshipments dramatically decrease - Customer trust improves - Sales proposes with confidence

Months 9-12: Financial Results Realization Phase - Revenue expansion - Cost reduction - Investment recovery

Results After 12 Months:

Learning and Growth: - System proficiency: 100% (target achieved) - Inventory management team: Expanded to 7 (veteran knowledge transferred to young staff) - Siloing eliminated: Anyone can handle inventory management

Business Process: - Inventory confirmation time: 3 hours daily → 10 minutes (96% reduction) - Inventory accuracy: 2.8% discrepancy → 0.2% (93% improvement) - Misshipments: 8 monthly → 0.3 monthly (96% reduction)

Customer: - Customer complaints: 13 monthly → 0.8 monthly (94% reduction) - Customer satisfaction: 3.6 → 4.9 - Repeat rate: 68% → 88% - New customers: +32 companies annually (increased through word-of-mouth)

Financial: - Annual revenue: ¥850M → ¥1.08B (+27%) - Opportunity loss: ¥21.6M annually → ¥2.4M (89% reduction) - Operating profit margin: 6% → 11% - Investment recovery: Completed in 7.8 months

Phase 7: BSC Continuous Operation

BSC isn't made once and finished. Reviewed quarterly.

Q2 BSC Review: - New issue: "Inventory freshness management" - New learning: "Thorough FIFO" - New business improvement: "Add expiration date alert function"

Q3 BSC Review: - New customer value: "Inventory visualization sharing" - New measure: "Share inventory status with major customers in real-time" - New financial effect: "Customers' order accuracy improves, waste loss reduction"

Chapter Five: Detective's Diagnosis—Strategy Transforms Organization

That night, I reflected on BSC's essence.

Many companies end systemization with "efficiency." Work time decreases. They're satisfied with that.

But BSC is different. It uses efficiency as "means" to draw "purpose" of increasing customer satisfaction, expanding revenue, and growing organization.

Four perspectives connect with causal relationships. Learning and growth becomes foundation, improving business process, increasing customer value, generating financial results.

MeatSupply's inventory management renewal wasn't mere systemization. It was transformation from paper-dependent organization to digitally growing organization.

"Systemization without strategy is just investment. Causal chain drawn by BSC transforms investment into growth"

The next case will also depict the moment when BSC draws organizational transformation scenario.

"Don't end with efficiency. Draw with BSC. Learning changes business, business protects customers, customers generate profit. That is strategy"—From the detective's notebook

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