Chapter 16: Control Systems and Quality Management Flashcards
Controlling
Monitoring performance, comparing it with goals, and taking corrective action as needed
Control process steps
The four steps in the process of controlling: (1) establish standards; (2) measure performance; (3) compare performance to standards; and (4) take corrective action, if necessary
Control standard
The first step in the control process; the performance standard (or just standard) is the desired performance level for a given goal
Control charts
A visual statistical tool used for quality-control purposes
Management by exception
Control principle that states that managers should be informed of a situation only if data show a significant deviation from standards
Feedforward control
Focuses on preventing future problems
Concurrent control
Entails collecting performance information in real time
Feedback control
Collecting performance information after a task or project is done
Balanced scorecard
Gives top managers a fast but comprehensive view of the organization via four indicators: (1) customer satisfaction, (2) internal processes, (3) the organization’s innovation and improvement activities, and (4) financial measures
Budgets
A formal financial projection
Incremental budgeting
Allocating increased or decreased funds to a department by using the last budget period as a reference point; only incremental changes in the budget request are reviewed
Fixed budgets
Allocation of resources on the basis of a single estimate of costs
Variable budgets
Allowing the allocation of resources to vary in proportion with various levels of activity
Financial statements
Summary of some aspect of an organization’s financial status
Balance sheet
A summary of an organization’s overall financial worth—assets and liabilities—at a specific point in time
Income statement
Summary of an organization’s financial results—revenues and expenses—over a specified period of time
Statement of cash flows
Reports the cash generated and used over a specific period of time
Financial ratios
Indicators determined from a company’s financial information and used for comparison purposes
Customer satisfaction
Measure of how products or services provided by a firm meet customer expectations
Customer retention
Refers to the actions companies take to reduce customer defections
Best practices
A set of guidelines, ethics or ideas that have been shown to produce optimal results
Strategy map
A visual representation of the four perspectives of the balanced scorecard that enables managers to communicate their goals so that everyone in the company can understand how their jobs are linked to the overall objectives of the organization
Quality
The total ability of a product or service to meet customer needs
Quality control
A means of ensuring quality whereby errors are minimized by managing each stage of production
Quality assurance
A means of ensuring quality that focuses on the performance of workers, urging employees to strive for “zero defects,”
Deming management
Ideas proposed by W. Edwards Deming for making organizations more responsive, more democratic, and less wasteful
PDCA cycle
A Plan-Do-Check-Act cycle using observed data for continuous improvement of operations
Total quality management (TQM)
A comprehensive approach—led by top management and supported throughout the organization—dedicated to continuous quality improvement, training, and customer satisfaction
Two core principles of TQM
(1) People orientation—everyone involved with the organization should focus on delivering value to customers—and (2) improvement orientation—everyone should work on continuously improving the work processes
Continuous improvement
Ongoing, small, incremental improvements in all parts of an organization
Outsourcing
Using suppliers outside the company to provide goods and services
Reduced cycle time
The reduction of steps in the work process
Statistical process control
A statistical technique that uses periodic random samples from production runs to see if quality is being maintained within a standard range of acceptability
Lean Six Sigma
Quality-control approach that focuses on problem solving and performance improvement—speed with excellence—of a well-defined project
ISO 9000 series
Quality-control procedures companies must install—from purchasing to manufacturing to inventory to shipping—that can be audited by independent quality-control experts, or “registrars,”
ISO 14000 series
Set of quality-control procedure that extends the concept of the ISO 9000 series, identifying standards for environmental performance
Supply chain
The sequence of suppliers that contribute to creating and delivering a product, from raw materials to production to final buyers
Kaizen
A Japanese philosophy of small continuous improvement that seeks to involve everyone at every level of the organization in the process of identifying opportunities and implementing and testing solutions
Six Sigma
A rigorous statistical analysis process that reduces defects in manufacturing and service-related industries
