D.4 Business Process Improvement

Question 1

What are the steps in Internal cost analysis?

Answer 1

1. evaluate
2. ID costs & cost drivers
3. eliminate non-value activities and reduce costs where applicable

Question 2

What are the main steps to Business Process Improvement?

Answer 2

1. internal cost
2. internal differentiation
3. vertical linkage

Question 3

What are the steps in vertical linkage analysis?

Answer 3

1. evaluate external key pieces of value chain - suppliers, vendors, distributors
2. ID costs and cost drivers
3. evaluate to discover sustainable competitive advantages

Question 4

List steps for internal differentiation analysis

Answer 4

1. ID processes & costs associated with those processes
2. evaluate to see what can enhance customer experience
3. decide & follow sustainable differentiation strategy

Question 5

Define value added activities

Answer 5

any activity that adds value to final consumer

Question 6

What are external failure costs?

Answer 6

costs that occur AFTER products are produced and delivered to consumers

Question 7

What are appraisal costs?

Answer 7

costs to ensure product meets customer specifications

Question 8

What should be identified as prevention costs?

Answer 8

any costs that would prevent product defects:

design engineering
supplier evaluation
labor training

Question 9

Define internal benchmarking

Answer 9

comparing business process to another process inside firm

Question 10

Define competitive benchmarking

Answer 10

comparing firm’s results to a competitor’s results

Question 11

Define functional benchmarking

Answer 11

comparing practices with another firm but outside industry

Question 12

What’s activity-based management?

Answer 12

focuses on HOW costs occur from an activity than the actual costs themselves

Question 13

Continuous improvement aims to achieve ____ _____

Answer 13

ideal standards