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Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc.Developed by Stephen M.Peters

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Productivity through Managementand Quality Control

Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc.

All rights reserved. Requests for permission to make copies of any part of the

work should be mailed to the following address: Permissions Department,Harcourt, Inc., 6277 Sea Harbor Drive, Orlando, Florida 32887-6777.




Organizational Control

• The systematic process of regulating organizational activities.

• Control can focus on events before, during, or after a process.

• Three types of control.

1 Feed forward

Sometimes called preliminary or preventive control.

2 Concurrent

Assesses current work activities, relies on performance standards.

Includes rules and regulations for guiding employee tasks and behaviors.

Intent is to ensure that work activities produce the correct results.

3 Feedback

Focuses on the organization’s outputs; also called post-action or output control.

American

Productivity &

Quality Center

http://www.apqc.org/




Organizational Control Focus

Feedforward Control

Anticipates Problems

Examples

• Pre-employment

drug testing

• Inspect raw materials

• Hire only college

graduates

F o c u s i s on

Inputs

Concurrent ControlSolve Problems as

They Happen

Examples

• Adaptive culture

• Total quality

management

• Employee

self-control

F o c u s i s on

Ongoing

Processes

Feedback ControlSolves Problems

After They Occur

Examples

• Analyze sales per

employee

• Final quality

inspection

• Survey customers

F o c u s i s on

Outputs




Feedback Control Model

If Inadequate

If Adequate

Adjust Standards Adjust Performance

Feedback

Establish

StrategicGoals

1. Establish

standards of performance.

2. Measure

actualperformance.

3. Compare

performanceto standards.

4. Take

correctiveaction.

4. Do nothing

or providereinforcement.

Nist Quality

Program

Feedback

http://www.quality.nist.gov/



Managing Productivity

Two approaches for measuring productivity:

Total factor productivity: the ratio of total outputs tothe inputs from labor, capital, materials, and energy.

Partial productivity: the ratio of total outputs to a

major category of inputs.

Productivity is the organization’s output of goods and services divided by its inputs.




Total Quality Management (TQM)

• Commitment to infusing quality into every activity.

• Focuses on teamwork, increasing customer satisfaction,

and lowering costs.• Means a shift from a bureaucratic to a decentralized

approach to control.

• Has a target of zero defects.




TQM Techniques

• Most companies that have adopted TQM have

incorporated.

Quality

EmpowermentBenchmarking

Outsourcing

Standard for reduced cycle timeContinuous improvement

Center For Quality &

Productivity

Improvement

http://www.engr.wisc.edu/centers/cqpi




The Quality Circle Process

Team

Creates Quality

Circle andCollects

Information

Team

Selects Problems

to Be Solved

Team

Gathers Data and

Analyzes Problems

Team

Recommends

Solutions

Decision byTop Management Feedback from Mangers to Quality Circles




Achieve growth by

attracting new

customers

A way to position for

the future

TQM Can Improve

Operations Management

Way to make

company one of the

best

TQM Leads to:




Statistical Quality Control Steps

Define the characteristics of a high-quality output.

Breakdown work activities into separate elements

required for producing a high-quality output.

Have current and reasonable standards.

Discuss specific performance expectations for every

job with workers.

Make check sheets and collect data for each task.

Evaluate employee progress at frequent intervals.

1.

2.

3.

4.

5.

6.




Improving Productivity

Three places to look:

Technological productivity: the use of more efficient

machines, robots, computers, and other technologies to

increase output.

Worker productivity: having workers produce more

output in the same time period.

Managerial productivity: managers do a better job of running the business.




Budgeting

Expense Budget• Outlines the anticipated and actual expenses.

Cash Budget

• Estimates and reports cash flow on a daily or weekly basis to ensure that

the company has sufficient cash.

Capital Budget

• Lists planned investments in major assets.

• Not only have a large impact on future expenses, they are investments

designed to enhance profits .

Revenue Budget

• Lists forecasted and actual revenues.




Traditional Companies Budgeting

• Top-down budgetingMiddle and lower-level managers set departmental

budget targets.

Done in accordance with overall company revenuesand expenditures specified by top management.

• Bottom-up budgeting

Lower-level managers budget their departments’

resource needs.

Budget request pass up to top management for

approval.




International Quality Standards

• ISO 9000

International standards for quality management.

Adopted in the late 1980’s by more than 50 nations

including the United States.U.S. companies initially lagged behind .

Process of application and certification for ISO 9000 is

expensive and time-consuming.Certification is an important indicator of world-class

quality.




Qualities of

Effective Control Systems

1. Linkage to Strategy

2. Understandable Measures

3. Acceptance by Employees4. Balance of Objective and Subjective Data

5. Accuracy

6. Flexibility7. Timelessness

8. Support of Action

16 productivity through management and quality control

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