Harris Corporation: Financial Benchmarking

12 Pages Posted: 10 Jun 2009

See all articles by Mark E. Haskins

Mark E. Haskins

University of Virginia - Darden School of Business

Abstract

This field-based case describes the approach and decisions used by Harris Corporation's vice president of supply chain management and operations to establish a set of financial benchmarks. It requires students to use those benchmarks to decide what areas need focus to potentially raise the company's financial results and elevate its financial performance through specific actions within its supply-chain group.

Excerpt

UVA-C-2289

Rev. Mar. 22, 2012

Harris Corporation: Financial Benchmarking

Leon Shivamber, vice president of supply chain management and operations, had been with Harris Corporation (Harris) about three years. Since joining the company, many exciting changes and initiatives had been undertaken throughout the organization, contributing to an excellent few years of financial performance. Shivamber, however, felt his part of the organization was poised to make an even bigger contribution to Harris's success than it had to date. He wanted his people to be more in sync with the company's long-term financial goal of creating shareholder value, and not just with year-over-year improvement against their local budgets. To accomplish this, he wanted to establish a clear “line of sight” from his group's supply chain activities to the enterprise-wide metrics of return on sales (ROS) and return on equity (ROE). To be useful, that line of sight had to highlight the supply-chain levers most in need of improvement through a group of benchmark companies.

Company Setting

Harris, based in Melbourne, Florida, was a century-old, publicly held company with just over $ 4 billion in 2007 revenues and just under $ 500 million in net income. Revenues had more than doubled over the prior four years, and net income had increased eightfold during the same period. Harris manufactured, sold, and serviced an array of technical communications products, programs, and systems for both the government and commercial markets in more than 150 countries. Its products included tactical military field radios, high-speed network encryption terminals, and high-definition servers and editing workstations. U.S. government customers included the Census Bureau, the Federal Aviation Administration, the National Reconnaissance Office, the Air Force, the Army, and General Services Administration; various television and radio broadcast organizations were also customers. About two-thirds of the company's revenue was from sales and services to the U.S. government. About 90% of its 16,000 employees were located in the United States, and approximately 7,000 of those employees were engineers and scientists. Competitors included companies such as General Dynamics, ITT Industries, Boeing, Lockheed Martin, Nokia, Raytheon, Rockwell Collins, and L-3 Communications.

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Keywords: financial statement, analysis, operations management, ratios, benchmarking, financial reporting, field-based, supply chain

Suggested Citation

Haskins, Mark E., Harris Corporation: Financial Benchmarking. Darden Case No. UVA-C-2289, Available at SSRN: https://ssrn.com/abstract=1417162

Mark E. Haskins (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924 -4826 (Phone)

HOME PAGE: http://www.darden.virginia.edu/faculty/haskins.htm

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