Performance Management Part: 1_M4 Flashcards
What are the quality programs?
- Absolute conformance is the most rigorous standard of quality because it represents a perfect, or ideal, level of compliance.
- Goalpost conformance assumes a range of acceptable results. It represents achievement of compliance within an established range of tolerable error.
- Goalpost conformance is considered less rigorous than absolute conformance.
What are quality and efficiency indicators of production?
Quality Indicators
-Returns and allowances
-Customer complaints
Efficiency Indicator
-Production cycle time.
What is in a Cost of Quality Report?
- Appraisal Cost.
- Prevention Cost.
- Internal Failure.
- External Failure.
What is Conformance Cost?
Cost incured to catch defect before produced and after produced
Conforming costs are those preventative and appraisal costs
invested to detect and prevent errors.
Prevention Cost to prevent the production or delivery of a defective unit:
- Inspection expenses Pre-Production only (raw materials expected soon).
- Preventative maintenance
- Redesign of Product
- Redesign of Process
- Search for higher-quality suppliers
- Engineering or training.
- Supplier evaluations.
- Design engineers.
Appraisal Cost discover and remove defective parts before they are shipped to customer
- Statistical quality checks.
- Inspection and testing Post Production (For completed products to be shipped).
- Maintenance of the Laboratory.
- Testing.
What are non-conformance cost?
Cost incured before and after sent to customer
Nonconforming costs are those internal and external failures
associated with correcting quality errors associated with non compliance.
Internal Failure Cost to cure a defect discovered before it was sent to the customer
- Rework Process.
- Scrap.
- Tooling changes.
- Costs to dispose.
- Cost of the lost unit.
- Downtime.
External Failure Cost to cure a defect discovered after the product is sent to the customer:
- Warranty Cost.
- Cost of returning the good.
- Liability claims.
- Lost Customers.
- Reengineering an external failure.
What is the directional relationship to conformance and non-conformance cost?
They are inversely related.
What techniques are used to measure financial and non-financial measures?
A Fishbone Diagram
- Potential problems that could occur at each phase of a process.
- Fishbone diagrams provide a framework for managers to analyze the problems that contribute to the occurrence of defects.
- A fishbone diagram analyzes cause and effect.
- Manpower, machinery, methods, and materials are commonly identified elements of manufacturing processes that would be used to evaluate the source of defects typically presented on a cause and effect (Fishbone) diagram.
Pareto Diagram
- Represents an individual and cumulative graphical analysis of errors by type.
- Individual error types are represented on a histogram (bar graph), while the cumulative number of errors is presented on a line graph.
- Used to prioritize process improvement efforts.
- Display the relationship between errors and process issues.
Control Chart
- Shows the performance of a particular process in relation to acceptable upper and lower limits of deviation.
- Performance within the limits is termed statistical control.
- Processes are designed to ensure that performance consistently falls within the acceptable range of error.
Value Chain
Is a macro level flowchart that shows the relationship between broad functional areas, the product delivered by the organization, and manner in which value is added at each link in the chain.
What are financial score cards?
4 of them
Financial scorecards are variance report overall analysis analyzed by:
- The Responsibility of Segments.
- Areas of Accountability in Financial Scorecards.
- Contribution Reporting.
- Balanced Scorecards
What is the Balance Score Card?
4 of 4 Financial Score Cards
- Normally classifies activities of an organization into major headings.
- Documents the measurements of the critical success factors and related strategic goals.
- There are both financial and non-financial measures that are evaluated regularly in a format that shows the dimensions of the business.
What are the 4 critical success factors measured by the Balanced Scorecard?
- Financial is concerned with the capture of increased market share.
- Internal business processes is concerned with maintaining low costs that are supported with low prices.
- Customer perspective is concerned with target markets (e.g., low-price leader).
- Advancement of innovation and human resource development (learning and growth curve) is concerned with linking strategy with reward and recognition.
What are performance reports?
- Are designed to meet organizational needs.
They should contain:
- Exceptional items that are controllable.
- A user focus.
- Specific time horizons.
What is a strategic plan?
Strategic plans are broad-based and long-term in nature.
What are the Contribution Reporting Measures?
Profit SBU’s are responsible for profit vs. controllable cost.
Controllable Margins
- Are specifically defined as CM less controllable FC and do not contemplate all costs directly associated with strategic objectives regardless of control.
Contribution Margin
- Measures the excess of revenues over variable costs or (Contribution to FC).
Allocation of Common Cost
- Managers can control VC and some controllable FC. Common cost are not controllable.
What is Just-In-Time Management?
Just in time management anticipates achievement of efficiency by scheduling the deployment of resources just-in-time to meet customer or production requirements.
What is benchmarking?
Benchmarking is a technique used to identify standards that define quality.
