Optimizing the production of Bio-fuels using a Balanced Scorecard

Bio-fuels are often considered as possible alternative for "fossil fuels" which can have a great potential in near future

There are various forms of bio-fuel; among which the commonly recognized ones include Bioethanol (derived from cereals, maize, and soybeans and is a replacement of petrol or gasoline), Biodiesel (obtained from oilseeds and is used in place of diesel) and Biogas (formed from animal waste and is a substitute for natural gas). Some of the major benefits of this biomass-generated "bio-fuels" comprise "their possibility of being used in vehicle engines, after mixing with certain amount of fossil fuels"; "less production of green-house gas emission" and "its renewable nature that makes it a cheap and energy source".

The amount of energy delivered on combustion of bio-fuels can be up to ten times the value that went in producing those. Moreover, the green-house gas emission can be reduced to a fourth of what is thrown by a corresponding amount of fossil fuel. Owing to the stated advantages of employing bio-fuels, companies are getting involved in production of this energy source. However, there lie several challenges to be won before one can completely rely on it.

To start with, although significant volume of energy is released on burning of bio-fuels and global warming too stands

chances of being under control; but there exists another side to this story. Few categories of bio-fuels generate enormous harmful gases, which contribute to global warming. Moreover, attempts to increase the volume of bio-fuels can result in "food price-rise" as major chunk of photosynthetic plants would be diverted to production of bio-fuels. Such environmental and social hurdles limit the functioning of companies striving to produce bio-fuels.

Besides this, there are several guidelines that make up the framework, in which these bio-fuel producing companies operate. The norms that relate to air quality, biodiversity, labour conditions and soil conservation, exist on both the national and international levels. All the projects are allowed to proceed under Environment and Social Impact Assessment (EISA).

Combining these restrictions, which limit the utility and production of bio-fuels, it is seen that a tool that allows monitoring and tracking of the proceedings should be in place. A BSC (Balanced Scorecard) that has indicators grouped in various perspectives is the strategy to be used. An organization can use any number of focus areas, which it sees have important bearing on the success of the efforts. When it comes to "Bio-fuel Production", the aspects can be- Production Perspective, Efficiency Perspective, Quality Enhancement and Public Awareness perspective and Research and Environmental Perspective.

The indicators for following the production process are- "Gallons produced per year", "cost per hectare" and "types of bio-fuels produced". Further, Efficiency can be gauged by measuring "% reduction in production downtime", "% increase in production capacity" and "% reduction in bio-fuel production cost per hectare". Moving on, Quality Enhancement and Public Awareness Perspective can be tracked using metrics like "level of compliance with ASTM standards", "number of quality management techniques utilized", "number of bio-fuel benefits awareness campaigns held" and "integration level of small- and mid-sized plants with large-sized ones". Lastly, Research and Environmental perspective can be obtained with "fraction research budget", "% increase in government aid" and "number of potential sources of bio-fuels developed".

Such a quantitative approach enables the production company in pulling all the valuable aspects together, in single direction. Consequently, the chances of achieving the aims and objectives intensify by manifold.

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