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Click to edit Master title style,Click to edit Master text styles,Second level,Third level,Fourth level,Fifth level,33,Focused Management Inc.,2024/9/13,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,2024/9/13,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,solved?,HW,Problem?,Qualification,done?,Problem ID,Identify Part,Identity Delivery Method,(,order parts - some,countries),Solution skill ID,Disp,needed?,Launches,Courier,Logistic,Process,Solution,Identified?,Validation,Identify,Preblem,ID part,ID DM,Solution skill,Disp,needed,Customer told,2,nd Line will,call back,Remote or,Problem,solved?,Predictive,Group,Route to,P2,Help,required,Technical,Assistant,Researches/,Suggests,Solution,Identify,on-site,Resources,Order,Parts,Assign Call,(,some Delivery,method,automated),To,Installation,Process,Techn,dispatched,Parts,Process,CE goes to,site,collects,parts,Repair,completed?,Finish,Repair,Escalation,Process,Process same as Div X,R&D,Process,Off Line,Validation,Close call,Close call,Close call,No,No,No,Yes,Yes,No,Yes,Yes,No,No,Yes,Yes,No,Yes,Yes,No,Yes,No,Yes,No,Yes,Yes,No,Yes,Yes,No,No,Yes,No,No,Yes,Yes,No,No,Yes,Service Delivery Process,Activity Cost Results,Activity Driver,Driver Qty,Activity Cost,$ /,Unit,#,Credit Control Transactions,1,893,36,414,19.24,# 3,Piece Height & Dia Changeovers,20,171,200,8,560.00,# 3,Piece Height Changeovers,59,43,850,743.22,#,Ink Mixes,6,401,68,276,10.67,#,Products Costed,115,5,550,48.26,#,Traded Sales Transactions,866,7,162,8.27,#,Plant 7 Works Order Issues,40,551,48,084,1.19,#,Hrs. Run 3 Pc. Good Products,22,261,1,305,303,58.64,#,Hrs. Run DRD Good Products,14,477,1,100,338,76.01,#,Hrs. Run Marq. Good Products,9,078,1,205,748,132.82,#,Hrs. Run Rect. Line Good Products,2,981,410,534,137.72,ABC & Process Analysis: Thoughtful Interaction,Service Delivery Process,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,solved?,HW,Problem?,Qualification,done?,Problem ID,Identify Part,Identity Delivery Method,(,order parts - some,countries),Solution skill ID,Disp,needed?,Launches,Courier,Logistic,Process,Solution,Identified?,Validation,Identify,Preblem,ID part,ID DM,Solution skill,Disp,needed,Customer told,2,nd Line will,call back,Remote or,Problem,solved?,Predictive,Group,Route to,P2,Help,required,Technical,Assistant,Researches/,Suggests,Solution,Identify,on-site,Resources,Order,Parts,Assign Call,(,some Delivery,method,automated),To,Installation,Process,Techn,dispatched,Parts,Process,CE goes to,site,collects,parts,Repair,completed?,Finish,Repair,Escalation,Process,Process same as Div X,R&D,Process,Off Line,Validation,Close call,Close call,Close call,No,No,No,Yes,Yes,No,Yes,Yes,No,No,Yes,Yes,No,Yes,Yes,No,Yes,No,Yes,No,Yes,Yes,No,Yes,Yes,No,No,Yes,No,No,Yes,Yes,No,No,Yes,ABC ACTIVITY,# 524,CALL RECEIPT,$0.2,m,ABC ACTIVITY,# 355,CUSTOMER,QUALIFICATION,$1.1,m,ABC ACTIVITY,# 274,DISPATCH PARTS,$0.3,m,ABC ACTIVITY#432ON-SITE FIX,$7.9,m,Total Process Cost = $9.5m,Costed Process,Process:,TOTAL COST,Order Fulfillment Process:,$4,437,716,Activities In Process:,Cost,Approve credits,Collecting accounts,Freight delivery cost,Enter credit notes,Enter customer orders,Freight pallet miles cost,Pick loose cases,Picking pallets,Pay promotional claims,Shipping paperwork,Driver,#,Credits,#,Orders,#,Orders,#,Credits,#,Orders,#,Pallet X Miles,#,Loose Cases,#,Pallets,#,Claims,#,Orders,170,123,499,689,167,546,154,539,661,389,1,035,546,843,869,305,769,395,342,203,903,Activity Analysis,The first step in an ABC analysis is to understand what activities are performed in the organization.,Activity Survey Questionnaire (ASQ) facilitates simple and efficient collection of activity data throughout the organization, prepares the data for import into analysis tools and produces draft activity and process costs.,Lets see ASQ in,action,Pharmacy,Best Practice AnalysisUnit Cost Comparison,Activity,Iowa,Los Angeles,New York,Tempe,Michigan,Receive orders,0.09,0.15,0.16,0.06,0.06,Order set-up,0.83,0.59,1.22,0.84,0.71,Checking RXs,0.68,0.60,0.59,0.24,0.76,File hard copy RXs & scan,0.07,0.10,0.16,0.12,0.25,Process inventory,0.07,0.04,0.07,0.03,0.21,Bag & ship orders,12.06,7.72,8.45,6.90,7.47,Product / Customer ABC Profit,VBM Product / Customer Economic Profit,Key Process Measures,Measures can be limited to M1 (end of process) and M2 (sub-process) measures,M1-E (External) measures should be derived from goals,M2,M1-I,External/Customer Measures,Internal/Business Measures,Subprocess Measures,M1-E,CUSTOMER,FUNCTION A,FUNCTION B,FUNCTION C,M2,M2,M2,M2,M1-E,M1-I,Linking Process to Job,“SHOULD” PROCESS MAP,Customer,Function A,Function C,Function D,CROSS-FUNCTIONAL ROLE/RESPONSIBILITY MATRIX,Functions and Outputs,Function A,Function B,Function C,Function D,“Should” Macro Steps,FUNCTIONAL ROLE/RESPONSIBILITY MATRIX,“Should” Process Steps,Jobs and Outputs,Job 1,Job 2,Job 3,Job 4,Function B Outputs,Consequences,Input,Output,Feedback,Human Performance System,“IS” PROCESS MAP,Measures,Everywhere,Process Measures Worksheet,Material Acquisition Process,Total Process Measures,Dimension,Current,Performance,Measure,Short Term,Goal,Long Term,Goal,Actions,to be taken,Process,Output,Bench-,marks,Perspectives of Measurement,(Create & Gather),(Store & Deploy),(Use & Learn),processes,knowledge,training,Insights, Procedures, Guidelines, Expertise,Front lines,Business Repository:,your corporate DNA,Feedback,Knowledge Management Creates “Living Processes”,Web/ Intranet,Internal or External Customer,The Performance Point !,Measures Software to Influence Human Behavior,Distribution of consistent and appropriate measurement information to everyone in the organization is fundamental to execution of A/VBM,Use of computer technologies - data warehouse, OLAP and presentation layer software provide the “media” of distribution,It is the media that facilitates organization change. The marriage of management philosophy with technology and the imperative to create value,The media is represented by the presentation of current measures and performance information on computer screens to all accountable parties,The suite of tools includes software to perform simulation modeling of processes and economic performance,Sample Measurement,Scorecard / Dashboard,Focused Management Info Center,Personal Product Customer Projects Presentations Financial Models News Links Info & Profit Info & ProfitData& Analysis,E-mail,New flashes & Alerts,-market,-competition,-industry,-company info and alerts,(push technology),Calendar Tasks Stock Price External Links,The Performance Architecture,-,Scorecard,With Links and drill down,The Organization,My Part of the Organization,2024/9/13,Driving Performance in Organization,Determine stakeholder needs,Develop organization strategy,Analyze activities, processes and measures,Determine costs, current performance and benchmark,Establish performance standards,Establish goals / budgets & action plans,Deploy measures and knowledge repository systems,World Class Tools To Lead You Into The Future,The Performance Management Portal,ProCarta,Activity Survey Questionnaire,Other software Applications:,Activity Based Costing,ERP,Database,Internet,CRM,Strategy Review,Value Based Management,Business Process Improvement and Management,Balanced Performance Measurement,Activity Based Management / Budgeting,ERP / Databases,CRM,Portals / Presentation,ABM / Knowledge Management,Systems Planning and Analysis,Systems Implementation,Managed Services & Training,Value Creating Methodologies,Information Technology Services,Software,Value CreatingSolutions,=,Performance,Information,Technology,Portals,Assessments,Training,Design,Consulting,Facilitation,At Focused Management Inc. we are devoted to creating value for our clients by working with their staff to transfer skills and knowledge through the implementation of highly respected and proven performance management methodologies and software solutions.,Our market led, technology focus enables us to provide responsive, comprehensive solutions that link strategy with practical results.,Our seasoned team of professionals will address strategy, operations, risk, and technology issues in designing and facilitating end-to-end solutions that are specific to a clients situation and business needs.,We have professional staff in North America and affiliates around the world who provide strategic, operations improvement and systems integration consulting to organizations in all segments.,Seasoned professionals, powerful software working with your people to achieve business objectives,Focused Management Inc.,The Partnership to Implement Your Performance Architecture,Domain Knowledge,FMI Services,Performance Architecture Facilitation,Process Improvement & Management,Activity Based Costing / Management,Value Based Management,Knowledge Management Systems,Information Portals,Organization Design,Client-server systems integration,CRM & ERP Systems integration,We Believe in: Value, Velocity & Integrity,Network Services,CP Rail,Telus,AT&T,MCI WorldCom,Ontario Hydro,Rogers Cable,Consumer Products / Distribution,ESI/Value Rx,Kelloggs,Hewlett Packard,McNeil Consumer Products,Partial List of Clients,Manufacturing,LOF,Pilkington,Volkswagen Canada,DuPont,Procor,Government Services,Canadian Navy,City of Burlington,City of San Diego,Region of Halton,Canadian Coast Guard,City of Kitchener,Alberta Environmental Protection,Financial Services,Citibank - NY & Brazil,Banco Wiese,Toyota Motor Credit Corp.,Canada Trust,Zurich Insurance,Sun Life Insurance,TD Bank,Fidelity Investments,Contact Information,Please Contact Us At:,905-829-2658,PSharman,www.FocusedM,2024/9/13,
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