3Invisible Organizational Resources


The Name of the School (University)

The City and State where it is located

To be effective as a business a company needs to adopt a means of measuring the resources at its disposal (Strategy Management Group). However, there will be visible and invisible resources. The invisible resources are just as important to the business as the visible resources. In this paper, we develop the key invisible resource of Westfarmers from a Balanced Scorecard Perspective.

Raw Materials

Internal business processes such as making the supply chain more efficient make for a more efficient organization. The company needs to develop its supply chain so that it is clear where their products are coming from (certainty from suppliers). This is a critical invisible resource since it will enable the company to manage and control its raw materials thus controlling not only its sales but also its production processes (Erick, 2014, p.78-82). For instance, the company will have an advantage over other companies by having raw materials to cover several days of production as opposed to a company that does not have such a supply chain.

Work in Progress

Work in progress is a function of organizational capacity. Similar to raw materials, it is an important invisible resource that Westfarmers needs to develop. They constitute a second type of supply inventory as work in progress shows the extent to which the business is utilizing its installed capacity. Better coordination of work in progress including ensuring that the supply chain is operating at optimum capacity will enhance organizational effectiveness over the medium and long term (Niven, 2006, p.89-90). With the company now needing international production and by law having to adhere to regulatory mandates, this invisible resource will be critical.

Finished Goods

An important invisible resource that the company needs to develop for the sake of internal business processes that result in efficiency. The way that Westfarmers can do this is by either controlling these goods in their warehouse or having systems that control such goods in the supplier’s warehouse (Westfarmers). This is an important aspect of organizational efficiency as it enables the company to respond to client’s needs faster resulting in satisfaction. For instance, when Wesfarmers has developed a system of knowing what products are in the finished goods column, they can easily tell their consumers what products are in stock and what are not, resulting in greater customer satisfaction (Nair, 2004, p. 165).

Service Inventory

Managing inventory is tough but important but no more important than service inventory. Service inventory is another type of supply that Westfarmers will need to develop in order to achieve its mission. What makes this invisible inventory resource so valuable to need expert management is that it is at the core of sales (Strategy Management Group). It is only by having service inventory records that the company can use and design failure analysis systems to design better products and better target its customers. Moreover, for a company like Westfarmers which has aspect of recycling and sustainability at the core of its vision and mission, having a service inventory whereby consumers give feedback will be a critical resource towards attaining its goals (Erick, 2014, p. 87).


This is a key invisible inventory and will need to be incorporated in the balanced scorecard objectives to achieve organizational goals. For a company like Westfarmers that depends on farmers as it suppliers, goods in transit may account for up to 20% of its revenues and hence the need for a monitoring system is paramount (Nair, 2004, p. 234). Goods in transit can significantly skew your revenue numbers and can make the company look bad in quarterly revenue figures if a significant number of shipments paid for are yet to arrive. Developing a customer demand based system of transportation that takes into account distortions in demand and supply will make Westfarmers a more efficient organization (Westfarmers).

Balanced Scorecard

Financial Perspective

By initiating these invisible resource management perspectives, Westfarmers will be able to enhance their operating income, return on capital employed, and economic value added. Measures such as having efficient supply chain will mean operating income is more easily measured and calculated. This will result in a better return on capital employed, as it will reduce waste. All of these will have knock on effect of enhancing economic value by making the company a more efficient organization.

Customer Perspective

Employing these measures will enhance measures such as market share, customer retention, and customer satisfaction, in target segments. For instance, by having a supply chain that is organized according to supply and demand, the company stands to gain more market share. Such a positive happenstance is because of customers being satisfied in the company’s ability to provide products when needed. Besides, it will result in higher retention rates, as clients would not want to order from companies that have not proven themselves unlike Westfarmers.

Internal Process

Internal processes of making the supply chain measures such as order fulfilment, production, and procurement more effective will make the business gain in terms of higher quality and reduced costs. It is one of the most critical components of the business, which will make the business sustainable, in accordance with its vision and mission. Streamlining ordering and having a measure of control over suppliers will be critical in the achievement of this aspect.

Learning and Growth Perspectives

It is important that the company measure aspects such as skill sets, employee retention, and employee satisfaction. Having the knowledge and data on such measurements means that the company can learn and grow in aspects in which it is currently not performing optimally. This is one of the most important of aspects that Westfarmers needs to implement, if it is to be successful in taking advantage of its invisible inventory.


Erick, Corwin, 2014, Tracked: What You Should Know about Invisible Inventory Monitoring and Security, New York: NY, PWD Group.

Nair, Mason, 2004, Essentials of balanced scorecard, Hoboken, N.J: John Wiley & Sons.

Niven, Patel, 2006, Balanced scorecard step-by-step: Maximizing performance and maintaining results, Hoboken, N.J: Wiley.

Strategy Management Group, 2002, Balanced Scorecard Basics, Retrieved from http://balancedscorecard.org/Resources/About-the-Balanced-Scorecard

Westfarmers, 2016, Retrieved from https://www.wesfarmers.com.au/