Click to edit Master title style,Click to edit Master text styles,Second level,Third level,Fourth level,Fifth level,*,Focused Management Inc.,*,Cost and Performance Management:,Creating Value with Measures,Presented by,Focused Management Inc.,Facilitating Performance Improvement Through Better Use Of Information And The Application Of Decision Support Tools,2024/11/15,At Issue,Every organization needs to measure and manage performance to satisfy the demands of stakeholders,Todays measurement and management methods are much better than in the past but need to be connected together,The speed of change and information age computing and communications leave little margin for errors,Decision making needs facts,The Fish Tank Syndrome,If each person described what they saw,would it be the same description?,Perspectives vary!,Which is correct?,Implications of The Fish Tank Syndrome,We need a variety of perspectives and with which to obtain a balanced,disciplined and dynamic view of our businesses,We need to develop a common/agreed understanding of the business and all of its characteristics,We need a constantly available set of reference points to which we can return,We need a living repository in which locate and maintain knowledge,Result What Is At Stake,Inappropriate measurement systems can be costly experiments,Sobeys,$50m ERP write off,Boeings production problems in the late 1990s,Malcolm,Baldridge,winner,Wallace Co bankrupt,Fortune 500 companies will face a$31.5 Billion knowledge deficit next year,By how much can profit be increased by changing your product/market mix to focus on your most profitable products,Performance Architecture,A combination of a business logic methodology,relevant software and systems capability.The links between the tools are as important as the tools themselves.,Performance Architecture to Drive Value,Systems Enabled,Performance,Stakeholder Need/Values,Customers,Shareholders,Employees,etc.,Process Management,Human Performance,IN,OUT,Performance Measures,Scorecard,Organization Design,and Compensation,Best Practices,Activity Based,Management,Activity,Goals,Measures,Results,Process,Goals,Measures,Results,Organization,Goals,Measures,Results,TIME,QUALITY,FINANCIAL,QUANTITY,Strategic,Plan,Understand the Organization,Value-Based Management,“,VBM is a holistic management approach that encompasses redefined goals,redesigned organizational structures and systems,rejuvenated strategic and operational processes,and even revamped human resources practices”.,“This holistic practice of VBM is in sharp contrast to the finance-driven appearance that VBM has taken on in the past”,INSEAD Working Paper,Are you(Really)Managing for Value?,Value Creation is an Operational Issue!,Linked to Seven Value Drivers:,Sales growth rate,Operating profit margin,Cash income tax rate,Working capital,Fixed capital,Cost of capital-(WACC),Growth duration period,Creating shareholder value requires intense focus on:,Delivering benefits to customer in most efficient way,Hiring/retaining motivated workforce,Maintaining excellent supplier relationships,Good citizen in local communities,Processes are where the work is done,“If you cant describe what you are doing as a process,you dont know what you are doing.”,W.Edward Deming,Processs are connected to the appropriate knowledge and learning elements.All focused on the successful performance of a single task.,Processes link organization goals and measures to human performance and activities.,How We Organize OurselvesThe Three Levels of Performance,Market,Suppliers,C,I,O,F,III.Performer/Job Level,II.Process Level,I.Organization Level,Products,Services,Needs,Organization Work is Performed by Systems of Processes,Alignment of jobs,activities and processes with total,organization goals is critical to the success of the organization.,Shared service organizations are an integral component.,purchase,order,orders,invoice,samples,/specs.,product requests,extrusions,SUPPLIERS,CUSTOMERS,promotions,Order Fulfillment,Store,Pick,pack,ship,bill,collect,Strategic Planning,Planning&Control,Product Development,Test die,Build die,design,Production,Product made,Procurement,Buy material,Store&issue,Order Generation,Order entered,promotion,In,Stock,Work order,Sales order,product,Requisition,Materials,Line,time,New Dies,Goals/plans,Performance reports,Price targets,Yes,No,Human Resources/Systems/Maintenance/Facilities,Support processes,Corp.Gov.,6%,7%,4%,48%,22%,13%,Detailed Process Map,Customer,Call,Center,First Level,Technical,Dept,Second,Level,Technical,Dept,Inventory,Management,Scheduling,Logistics,Site,Technician,Escalation,R&D,Call Close,Transfer or,Reroute,Customer,informed of,Solution,Call,Transfer,Reference,docs,Predictive call,(,electronical,),Customer calls,IVR Routing,HW,Problem,Identify,-,Customer,-,Product,-,SLA,Verify Entitlement,Validation,Completed?,Hardware,Log Call,Re-repair,Qualified,by,Knowledge,tools,To,Process,5,Installation?,1,st level,product?,Reroute,Identify,Problem,Remote,so