DEVELOPING A COMPETITIVE STRATEGY AND CONTEMPORARY COST MANAGEMENT TECHNIQUES Flashcards
Level of sales in critical product group,
sales trend, percent of sales from new
products, sales forecast accuracy
SALES
Earnings from operations, earnings
trend, dividend growth
PROFITABILITY
Cash flow, trend in cash flow, interest
coverage, asset turnover, inventory
turnover, receivable turnover, credit ratings
LIQUIDITY
Share price
MARKET VALUE
Customer returns and complaints,
customer survey
CUSTOMER SATISFACTION
Coverage and strength of dealer and
distributor channel relationships; e.g. number
of dealers per state or region
DEALER AND DISTRIBUTOR
Trends in sales performance, training,
market research activities; measured in
hours or peso
MARKETING AND SELLING
On-time delivery performance, time
from order to customer receipt
TIMELINESS OF DELIVERY
Customer complaints, warranty expense
QUALITY
Number of defects, number of returns,
customer survey, amount of scrap, amount of
rework, field service reports, warranty claims,
vendor quality defects
QUALITY
Cycle time (from raw materials to finished
product); labor efficiency’ machine efficiency;
amount of waste, rework and scrap
PRODUCTIVITY
Setup time, cycle time
FLEXIBILITY
Downtime, operator experience, machine
capacity, maintenance activities
EQUIPMENT READINESS
Number of activities, effects and activities
SAFETY
Number of design changes number of new
patents or copyrights, skills of research and
development staff
PRODUCT INNOVATION
Number of days over or under the announced ship date
TIMELINESS OF NEW
PRODUCT
Number of training hours, amount of skill
performance improvement
SKILL DEVELOPMENT
Employee turnover, number of complaints,
employee survey
EMPLOYEE MORALE
Rate of turnover, training experience, adaptability, financial and operating performance measures
COMPETENCE
is a technique in which management develops policies and practices to ensure that the firm’s products and services exceed customer’s expectations
Total Quality Management
The two major characteristics of TQM are:
- a focus on serving customers, and
- systematic problem-solving using teams made up of front-line workers
is the philosophy that activities are undertaken only as needed or demanded
Just-In-Time (JIT)
tends to focus broadly on the control of TOTAL
MANUFACTURING COSTS instead of individual costs such as direct manufacturing labor
Just-In-Time (JIT)
is a process for creating competitive
advantage in which a firm reorganizes its operating and management functions, often with the result that jobs are modified, combined, or eliminated.
REENGINEERING
It has been defined as the
“fundamental rethinking and radical redesign of business processes to achieve dramatic improvement in critical, contemporary measures of performance, such as cost, quality, service and speed.
REENGINEERING
a more radical approach to improvement than TQM, is an approach where business process is diagrammed in detail, questioned and then completely redesigned in order to eliminate unnecessary steps, to reduce opportunities for errors and to reduce costs.
PROCESS REENGINEERING
Process reengineering has one basic recurrent problem, that is
EMPLOYEE RESISTANCE.
is a process by which a firm
1. determines its critical success factors
2. studies the best practices of other firms (or other units within a firm) for
achieving these critical success factors, and
3. then implements improvements in the firm’s processes to match or
beat the performance of those competitors.
Benchmarking
is a management technique in which marketing and production processes are designed to handle the increased variety that results from delivering customized products and services to customers
Mass Customization
is an accounting report that include the firm’s critical success
factors in four areas
a. financial performance
b. customer satisfaction
c. internal business process, and
d. innovation and learning.
Balanced Scorecard
firm’s critical success factors in four areas
a. financial performance
b. customer satisfaction
c. internal business process, and
d. innovation and learning
- is used to develop a detailed description of the
specific activities performed in the operation of the firm.
ACTIVITY ANALYSIS
is used to improve the accuracy of cost
analysis by improving the tracing of costs to products or individual
customers.
ACTIVITY-BASED COSTING
uses activity analysis to improve operational control and management control.
ACTIVITY BASED MANAGEMENT
are key strategic tools for many firms, especially those with complex operations, or great diversity of products
ABC and ABM
is a sequential process of identifying and removing constraints in a system
THEORY OF CONSTRAINTS (TOC)
is a management technique to identify and monitor the costs of a product throughout its life cycle. It consists of all steps from product design and purchase of raw material to delivery of and
service of the finished product.
LIFE CYCLE COSTING
involves the determination of the desired cost for a product or the basis of a given competitive price so that the product will earn a desired profit.
TARGET COSTING
Target cost =
Market determined price - Desired profit
The entity using ____ must often adopt strict cost-reduction measures to meet the market price and remain profitable
target costing
This is a common strategic approach used by intensely competitive industries where even small price differences attract consumers to the lower-priced product
TARGET COSTING
is the use of computers in product
development, analysis and design modification to improve the quality and performance of the product
COMPUTER-AIDED DESIGN (CAD)
- is the use of computers to plan,
implement, and control production.
COMPUTER-AIDED MANUFACTURING
involves and requires a relatively large investment in computers, computer programming, machines and equipment.
AUTOMATION
is a computerized network of automated equipment that produces one or more groups of parts or variations of a product in a flexible manner
FLEXIBLE MANUFACTURING SYSTEM (FMS)
is a manufacturing system that totally integrates all office and factory functions within a company via a computer-based information network to allow hour-by-hour manufacturing management.
COMPUTER-INTEGRATED MANUFACTURING (CIM)
A number of internet-based companies have emerged and been proven successful in last decade. Established companies will undoubtedly
continue to expand into cyberspace - both or B2B transactions and for
retailing.
E-commerce
refers to the sequence of business functions in which usefulness is added to the products or services of a company
Value chain
The term refers to the increase in the usefulness of the product or service and a result its value to the customer.
value
is an analysis tool that firms use to identify the specific steps required to provide a product or service to the customer
value chain
The key idea of this concept is that the firm studies each step in its operation to determine how each activity contributes to the firm’s competitiveness and profits.
Value chain
is the set of activities required to design,
develop, produce, market and deliver products or services to customers.
INTERNAL VALUE CHAIN
