Measuring Operations Performance of Price Waterhouse Coopers
Introduction
Life is all about setting goals and trying to achieve them. The same theory also applies in the managerial industry. The accomplishment of desired results in a business is called performance. One of the major concerns of the top managers of a firm is the actual performance of the firm so its measurement is unavoidable.
It is really important and necessary that the performance is measured at all levels. The performance is usually divided into five parts in order to be measured in a simpler and more accurate way:
Customer Service and Satisfaction
Finance
Operations
Safety
Staffing
I will concentrate in operations identifying relevant performance measures and comparing them to measures used by my syndicate company Price Waterhouse Coopers (PwC).
Analysis
Operations are all the processes in transforming inputs into desired outputs. These processes must be efficiently and effectively coordinated by managers and eventually they must accomplish specific organizational goals. All operations, despite how well managed they are, are capable of improvement. In order for the operations to be improved however, weaknesses should be identified first. Therefore operations need some kind of performance measurement as a prerequisite for improvement.
In the operations area we need to consider five aspects which will be critical to measure. These ‘performance indicators’ are:
• Quality (How Good?)
• Quantity-Dependability (How many?)
• Time-Speed (How quickly?)
• Easy of use-Flexibility (How easily?)
• Cost-Money (How expensive?)
All operations have in common three main characteristics: inputs, actions (process) and outputs. When measuring performance, we need to consider these component parts having always in mind the five performance indicators.
A firm can provide services, produce goods or contain elements of both. In this case, PwC is a strictly providing service firm. In manufacturing firms performance can be measured in different ways and especially with a set of quantitative ratios. For example: Labour cost per unit, material yield, unit overhead cost, stock keeping units etc. Some other measures which can be used only by a manufacturing company are inventory holding, scrap levels-percentage of material costs and value, delivery reliability, testing and simulation of a product etc.
A service firm performance is usually measured in terms of quality. Nevertheless, these performance measurements can also be measured in terms of time, flexibility and cost, and they can also be used by a manufacturing company. In order to analyze the measures, I will divide them to the three main parts of operations, input – process – output:
Input
In the case of a service firm, input is generally the people who run the operation’s function.
There are many ways to analyze the performance of a company, some more popular than others. According to the Barney text the accounting method is the most popular way of measuring a firm's performance (Barney, 2002). Some of the reasons for the popularity could include the fact that accounting measures of performance are publicly available on many firms and they communicate a great deal of information about a firm's operations. Other methods of performance analysis include firm survival and the multiple stakeholder approach.
Tapinos, E., Dyson, R.G. & Meadows, M. (2005). The impact of performance measurement in strategic planning. International Journal of Productivity and Performance Management, 54(5/6), 370-384.
The Success Measure: The success measure is to maximize the daily operating profit and to gain market share.
In order to attract new employees; sales profits and production will play a major part in recruiting top managers to execute a plan in the next 3 years that will need to involve a quality management performance base pay. The first performance metric that should be tracked is the customer satisfaction score, this will help improve the sales profits. Customer satisfaction score should be measured internally and externally by doing so it will help the organization identify where changes are needed. The next metric is productivity; Weave Tech wants to offer some new quality products that attract more than just military customers. In order to launch a new product, the organization should determine the cost per unit and determine the output cost as well.
Operations refers to the transformation of raw materials(inputs) into finished products(outputs). The operations process is one of the key business functions and is a crucial component to business success. Like every business, Qantas is affected by many internal and external influences requiring it to have effective strategies to respond to these influences. Businesses that are able to adopt and utilise effective operational strategies are able to quickly adapt and either reduce or take advantage of these influences that impact the business. The effectiveness of these strategies can measured by Qantas’ performance and whether or not it is able to hold it’s competitive advantage. How well these strategies respond to the influences on operations will determine the level of success that Qantas achieves.
The simple measures to assess the progress of goal are Throughput, Inventory Management and
In the given project the task is to make strategies for Australian Hardware Company for making their performance better. The strategies are to generate more revenue, gain large market share, increases the profitability ratio and to make this company best for home improvement products. Hence all of these strategies can be achieved within a shorter time period, and the IT managers and the CEO and rest of the staff including the supervisor are responsible for the success and failure of this project, whereas the performance indicator can be used for knowing whether any of the strategies is working well or not and what is their performance in the given time frame.
Performance metrics are used to determine and quantity improvement in processes. To develop performance metrics, it is important to collect data pertaining to critical work processes, understand the desired results and the development of realistic measurements to be used to quantify the process improvements. The goal of lean is to help in comparing performance levels with the benchmarks or established standards. In order to successfully develop project metric, it is it advisable to first define the project metrics. These include the goals, objectives, and project benchmarks. For example, if the process is to produce four inch rods. The upper limits and lower limit must be set probably 4m plus or minus 0.5m. Any deviation bellows 3.5m or beyond 4.5metres shall be considered out of control (Nicoletti, 2013). Process should always be within control. Collecting data is mainly to help in quantifying process improvement and not reduce products variability. The most commonly used metrics include speed, time, quality, quantity. In lean, both primary and secondary metrics must be defined.
Explain why Key Performance Indicators (KPIs) are an important part of the operational planning process. (Your answer must be at least in 50-75
Schonberger, R.J. and E.M. Knod Jr. Operations Management: Continuous Improvement. Richard D. Irwin, 1994, p. 44. 16. Selto, F.H. and D.W. Jasinski. "
Performance management is a management tool used to value, monitor and measure a company’s strategies that ensure the efficiency and effectiveness of its product delivery. This management tool does not focus on the organisation and on its employees as well as stakeholders. It is a continuous process that entails that managers make sure that organisational and employee values are corresponding (Aguinis, 2005,p.1/2-1/5). Performance Management brings about the competencies in the employees, increases self-esteem by giving feedback to employees, there is a low number of lawsuits because it helps understand the company better (eThekwini Municipality, 2008,p.10-11). According to Pride, Hughes and Kapoor (2011, p.288) performance management creates motivation for employees; one theory of motivation is of Expectancy, which stipulates that employees satisfaction is driven by expectations of what an organisation will offer in return.
... in implementing control mechanisms that will help to measure the quality of products, at the time so that they are ready to evaluate the performance.
For operations management to be successful, the function of the operation must be first be defined. The degree to which this is achieved is a measure of effectiveness, the key objective of operations management. Efficiency is less important since there is no point in which carrying out an irrelevant, or worse damaging, activity effectively. Effectiveness means achieving objectives, efficiency means consuming minimum resources. While both are desirable, the former is of overriding importance.
Nevertheless, there remains a debate over the differences between productivity and performance, and how they are measured. Performance is comprised of seven dimensions, of which one is productivity, as well as effectiveness, efficiency, quality, profitability, quality of work, and innovation (Haynes, 2007). Productivity is defined as “the relationship between outputs and the inputs provided to create those ou...
Operations management strategies play an important role in any organization to achieve organizational goals. An organization uses these operations strategies to maintain and control all its operations...