Chapter 7: Organizational and Operational Control Flashcards
ABC Classification
Inventory categorization system that optimizes inventory control by drawing management’s attention to the most critical items according to annual consumption volume.
Bureaucratic Control
Comprehensive system of control comprised of rules and standard operating procedures that shape and regulate the behavior or divisions, functions, and employee’s.
Concurrent Control
Control that gives managers immediate feedback on how efficiently inputs are being transformed into outputs so managers can correct problems as they arise.
Economic Order Quantity (EOQ)
The optimum order quantity that an organization should hold in inventory to minimize the costs associated with ordering, shipping, and holding a product.
Enterprise Resource Planning (ERP)
Computer based integration of core business processes that can include purchasing, production, planning, inventory management, shipping, delivery and marketing and sales.
Feedback Control
Control that gives managers information about customers reactions to goods and services so corrective action can be taken if necessary.
Feedforward Control
Control that allows managers to anticipate problems before they arise.
ISO14000
A set of voluntary, international standards for environmental management (both tools and systems).
ISO 9000
A set of international standards for quality management and quality assurance developed to help companies effectively document the elements of an efficient system.
Kaizan
Japanese management philosophy for continuous quality improvement where all employees are responsible for identifying gaps and inefficiencies in existing processes and implement continuous, incremental improvements.
Management by Objectives
Formal system of managing subordinates based on their ability to achieve specific organizational goals, performance standards, or budget figures.
Material Requirement Planning (MRP)
Computer based production planning, scheduling, and inventory control system used to manage inventories so that the right amount is delivered to the right place at the right time.
Pareto Analysis
Type of histogram that focuses attention on the most important problem area’s rather than all the problems, both large and small.
Quality at the Source (QATS)
Philosophy for quality improvement that makes each employee accountable for the quality of their work.
Scatter Diagram
A graph that shows if a relationship exists between a pair of numerical data (variables). Each variable is plotted on an axis, and, if they are correlated, the points will fall along a line or curve.
Six Sigma
A data-driven approach to eliminating defects (and costs) in business processes.
Stratification
Technique used in combination with other data analysis tools that separates the data so that patterns can be seen.
Stretch Goals
Goals that challenge a manager’s ability but are not impossible to attain.
Acceptance sampling
A quality control tool used to predict product quality of a batch of raw materials or products by inspecting a random sample size for defects
Barcode technology
An optical machine readable representation of data that allows inventory to be recognized for automatic, identification, and data capture
Behavior controls
Actions that shape, employee behavior and motivate employees to work within an organization structure
Clan control
The set of share values expectations, traditions, and norms that guide employee attitudes and behaviors to increase organizational performance
Control chart
A graph that shows process changes over overtime and displays variances in output quality from what is expected
Control systems
Formal target setting, monitoring evaluation, and feedback systems that provide managers with information about how well the organization strategy and structure are working
Cost control
The practice of monitoring and evaluating operating expenses and effort to reduce costs and increase profits
Direct supervision
The active monitoring and observation of subordinate behavior by manager
Fixed costs
Operating cost that remain relatively constant, regardless of the level of production or service provided
Inventory
The raw materials work in process and finish goods that are part of an organizations assets, and or will be offered for sale
Lead production
The relentless pursuit to eliminate waste from production and services while ensuring quality
Operations control
The process of monitoring, influencing and regulating business activities at the operational level
Organizational control
The process of monitoring, influencing and regulating organizational divisions functions and employees at strategic and tactical levels to accomplish an organization’s goals
Output controls
Measurable performance results at the corporate divisional, functional, and individual employee levels of an organization
Process quality
The quality of a product or service in production
Product quality
The quality of the inputs and outputs of a system
Quality assurance
A systemic process of “building in quality” for products and services
Quality
The ability of a product of service to consistently meet or exceeded specifications or standards
Rules
Short written or verbal descriptions of required actions or behaviors within an organization
Safety stock
The level of extra stock, i.e. inventory that is maintained by an organization as insurance against stockouts caused by unexpected changes in supply and demand
Standard operating procedures
Formal written instructions, the outline a detailed set of steps to complete a task
Total quality management
A management philosophy that involves all employees of an organization in a continuous effort to improve quality and achieve customer satisfaction
TQM check sheet
A document used for collecting data in real time at the location where the data is generated
Variable costs
Operating costs that change in relation to the level of production or service provided
What are the four building blocks of competitive advantage?
Efficiency, quality, responsiveness to customers, and innovation
What are the three characteristics of an effective control system?
Flexibility, accuracy, and timeliness
What are the three stages of control?
Input, conversion, and output
Input stage
Stage where managers use feed forward control to anticipate problems
Conversion stage
Concurrent control gives managers immediate feedback on how efficient the inputs are being transformed into outputs. This is the heart of total quality management in which workers are expected to constantly monitor the quality of the goods the result is finished products that are more valuable to customers and command higher prices
Output stage
Stage where managers use feedback control to provide information about customers reactions to goods and services so corrective action can be taken if necessary
What is the control process?
Step one established standards are performance, step two measure actual performance, step three compare actual performance against standards, step four evaluate actual performance and take action if needed
