管理会计英文课件：ch7 Measuring and Managing Process Performance

1、 2012 Pearson Prentice Hall. All rights reserved.Chapter 71 2012 Pearson Prentice Hall. All rights reserved.lThere are three general types of facility designs:Process LayoutsProduct LayoutsGroup TechnologylRegardless of the type of facility design, a central goal of the design process is to streamli

2、ne operations and thus increase the operating income of the system2 2012 Pearson Prentice Hall. All rights reserved.lThe Theory of Constraints (TOC) maintains that operating income can be increased by carefully managing the bottlenecks in a processA bottleneck is any condition that impedes or constr

3、ains the efficient flow of a processA bottleneck can be identified by determining points at which excessive amounts of work-in-process inventories are accumulatingThe buildup of inventories also slows the cycle time of production3 2012 Pearson Prentice Hall. All rights reserved.lThe theory of constr

4、aints relies on the use of three measuresThroughput contribution is the difference between revenues and direct materials for the quantity of product soldInvestments equal the materials costs contained in raw materials, work-in-process, and finished goods inventoriesOperating costs are all other cost

5、s, except for direct materials costs, that are needed to obtain throughput contribution4 2012 Pearson Prentice Hall. All rights reserved.lEmphasis is on the short-run optimization of throughput contributionlAssumes that operating costs are difficult to alter in the short run5 2012 Pearson Prentice H

6、all. All rights reserved.lAll similar equipment or functions are grouped togetherlProduction of unique products is done in small batcheslProducts follow a serpentine path, usually in batcheslHigh inventory levelslProducts might travel for several miles within a factory during the production process6

7、 2012 Pearson Prentice Hall. All rights reserved.lWork-in-process inventory accumulates at processing stations in a conventional organization for three reasons:Handling work in batchesIf the rate at which each processing area handles work is unbalanced, work piles up at the slowest processing statio

8、nIf processing area managers are evaluated on their ability to meet production quotas7 2012 Pearson Prentice Hall. All rights reserved.lIn a product layout, equipment is organized to accommodate the production of a specific productlProduct layouts exist primarily in companies with high-volume produc

9、tionlThe product moves along an assembly line beside which the parts to be added to it have been storedlPlacement of equipment or processing units is made to reduce the distance that products must travel8 2012 Pearson Prentice Hall. All rights reserved.lThe organization of a plant into a number of c

10、ells lWithin each cell all machines required to manufacture a group of similar products are arranged in close proximity to each otherlThe machines in a cellular manufacturing layout are usually flexible and can be adjusted easily or even automatically to make different products9 2012 Pearson Prentic

11、e Hall. All rights reserved.lThe shape of a cell is often a U shape lThe number of employees needed to produce a product can often be reduced due to the new work designlU shape also provides better visual control of the work flow10 2012 Pearson Prentice Hall. All rights reserved.lBatch productionCre

12、ates inventory costsCreates delays associated with storing and moving inventoryThese delays increase cycle times, thereby reducing service to customersDelays may even happen before manufacturing begins11 2012 Pearson Prentice Hall. All rights reserved.lDemands for inventory lead to huge costs in org

13、anizations, including:The cost of moving, handling, and storing the WIPObsolescenceDamagelFactory layouts and inefficiencies that create the need to hold work-in-process inventory may hide other problems leading to excessive costs of rework12 2012 Pearson Prentice Hall. All rights reserved.lProcessi

14、ng time is the time expended for the product to be madelProcessing cycle efficiency (PCE) is a measure of the efficiency of the manufacturing processlPCE = Processing Time Processing Time + Moving Time + Storage Time + Inspection Time13 2012 Pearson Prentice Hall. All rights reserved.lCost reduction

15、 has become a significant factor in the management of most organizationslThe premise underlying cost reduction efforts today is to decrease costs while maintaining, or improving, product quality in order to be competitive14 2012 Pearson Prentice Hall. All rights reserved.lGlobal competition has led

16、to the development of international quality standardslIn 1987, the International Organization for Standardization (ISO) developed the first ISO 9000 Series of StandardslThese standards have been updated several times and the new standard is called ISO 9001-2008lCompany certification under these stan

17、dards indicates to customers that management has committed to the production of the highest quality goods and services15 2012 Pearson Prentice Hall. All rights reserved.lIf the quality of products and services does not conform to quality standards, then the organization incurs a cost known as the co

18、st of nonconformance (CONC) to quality standardslQuality usually may be viewed as hinging on two major factors:Satisfying customer expectations regarding the attributes and performance of the productEnsuring that the technical aspects of the products design and performance conform to the manufacture

19、rs standards16 2012 Pearson Prentice Hall. All rights reserved.lClassification of quality costs:Prevention costsAppraisal costsInternal failure costsExternal failure costslExperience shows that it is much less expensive to prevent defects than to detect and repair them after they have occurred17 201

20、2 Pearson Prentice Hall. All rights reserved.lPrevention costs are incurred to ensure that companies produce products according to quality standardslExamples:Quality engineeringTraining employeesStatistical process controlTraining and certifying suppliers18 2012 Pearson Prentice Hall. All rights res

21、erved.lAppraisal costs relate to inspecting products to make sure they meet both internal and external customers requirementslExamples:Inspection of incoming materialsMaintenance of test equipmentProcess control monitoring19 2012 Pearson Prentice Hall. All rights reserved.lAn internal failure occurs

22、 when the manufacturing process detects a defective component or product before it is shipped to an external customerlExamples:Reworking defective components or productsThe cost of downtime in production20 2012 Pearson Prentice Hall. All rights reserved.lExternal failures occur when customers discov

23、er a defectlExamples:All costs associated with correcting the problemlRepair of the productlWarranty costslService callslProduct liability recallslFor many companies, this is the most critical quality cost to avoid21 2012 Pearson Prentice Hall. All rights reserved.lInformation is compiled in a cost-

24、of-quality (COQ) report, developed for several reasons:Illustrates the financial magnitude of quality factorsHelps managers set priorities for the quality issues and problems they should addressAllows managers to see the big picture of quality issuesAllows managers to try to find the root causes of

25、their quality problems22 2012 Pearson Prentice Hall. All rights reserved.lJust-in-time (JIT) manufacturing is a comprehensive and effective manufacturing system lJust-in-time production requires making a product or service only when the customer, internal or external, requires itlIt uses a product l

26、ayout with a continuous flow23 2012 Pearson Prentice Hall. All rights reserved.lJust-in-time manufacturing is simple in theory but hard to achieve in practicelOrganizations that use just-in-time manufacturing must eliminate all sources of failure in the systemlAt the core of the JIT process is a hig

27、hly trained workforce whose task is to carry out activities using the highest standards of quality24 2012 Pearson Prentice Hall. All rights reserved.lWhen an employee discovers a problem with a component, it is the responsibility of that employee to call immediate attention to the problem so that it

28、 can be correctedlSuppliers must be able to produce and deliver defect-free materials or components when they are requiredlPreventative maintenance is also employed so that equipment failure is a rare event25 2012 Pearson Prentice Hall. All rights reserved.lJust-in-time manufacturing has two major i

29、mplications for management accounting:Management accounting must support the move to JIT manufacturing by monitoring, identifying, and communicating to decision makers the sources of delay, error, and waste in the systemThe clerical process of management accounting is simplified by JIT manufacturing

30、, due to the smaller inventory to monitor and report26 2012 Pearson Prentice Hall. All rights reserved.lBalanced Scorecard process metrics include:Defect ratesCycle timesPercent of on-time deliveriesOrder accuracyActual production as a percent of planned productionActual machine time available compa

31、red with planned machine time available27 2012 Pearson Prentice Hall. All rights reserved.lA system that provides relevant data to support lean accounting production systemslFocuses on reducing costs during the manufacturing stage of the total life cycle of a productlKaizen is the Japanese term for

32、making improvements to a process through small, incremental amounts rather than through large innovations28 2012 Pearson Prentice Hall. All rights reserved.lThe system places enormous pressure on employees to reduce every conceivable costlKaizen costing leads to incremental rather than radical proce

33、ss improvementsThis can cause myopia as management tends to focus on the details rather than the overall system29 2012 Pearson Prentice Hall. All rights reserved.lA way for organizations to gather information regarding the best practices of otherslOften highly cost effectivelSelecting appropriate be

34、nchmarking partners is a critical aspect of the processlThe process typically consists of five stages30 2012 Pearson Prentice Hall. All rights reserved.lInternal study and preliminary competitive analysesThe organization decides which key areas to benchmark for studyThe company determines how it cur

35、rently performs on these dimensions by initiating:lPreliminary internal competitive analyseslPreliminary external competitive analyses Both types of analyses will determine the scope and significance of the study for each area31 2012 Pearson Prentice Hall. All rights reserved.lDeveloping long-term c

36、ommitment to the benchmarking project and coalescing the benchmarking teamThe level of commitment to benchmarking must be long term Long-term commitment requires lObtaining the support of senior management to give the benchmarking team the authority to spearhead the changeslDeveloping a clear set of objectives to guide the benchmarking effortlEmpowering employees to make change32 2012 Pearson Prentice Hall. All rights reserved.lThe benchmarking team should include individuals from all functional areas in the organizationlAn experienced coordinator is usually neces