Balnced Scorecard + Benchmarking

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Hi,
Can someoneplease give me a description of what these mean?
Havent a clue and im worried they may come up.
Thanks

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Balnced Scorecard + Benchmarking

    Hi,

    I thought I would reply as everyone else will be watcing the footie! I've got the following info from the FTC books:

    Balanced Scorecard:
    This was developed as it was thought that too much emphasis was being placed on financial ratios to assess performance. To be 'balanced' the following four aspects should be considered-

    Financial Aspect(profitability, revenue growth etc.)
    Customer Aspect (on time deliveries, satisfaction etc.)
    Business Process Aspect (manufacturing excellence, time to market, cycle time etc.)
    Organisation Learning (continuous improvement programme sucess, % of sales from new products etc.)

    Each CSF (Critical Success Factor) of each aspect will have KPIs (Key Performance Indicators) to assess performace i.e. ROCE, number of new customers, cycle times, % of sales from new products

    Benchmarking
    Is the establishment of targets and comparators to assess performance either set for particular industries so that comparisons can be made with competitors or internally so comparisons can be made between divisions. The targets used are chiefly the 'normal' ratios and other key indicators.

    Take it youve got the PEV/PCR exams coming up, what a nightmare ey? Best of Luck!! :D

    (To be on the safeside, it might be worth looking at TQM & Cost Reduction also)
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Balnced Scorecard + Benchmarking

    Thanks so much for them Kate, Cna you tell me about TQM and cost reduction too? Good luck to you too
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Balnced Scorecard + Benchmarking

    Hiya,

    There seems to be a lot of talk about TQM coming up but who knows!?! (All info from FTC books)

    TQM
    Total Quality Management can be defined as 'a continuous improvement in quality, efficiency & effectiveness', it aims towards:

    1) an environment of zero defects at minimum cost, i.e 'get it right first time'
    2) an awareness by all personnel of the quality requirements with supplying the customer with products of the agreed design specification
    3) the elimination of waste (anthing other than the essential amount
    4) embracing all aspects of operation from pre to post reduction

    There are three types of quality related costs:

    1)Failure
    a) Internal - Costs discovered before he product reaches the customer (i.e. scrap, quality related downtime)
    b) External - Costs discovered after the product reaches the customer (i.e. recalls, complaint investigation)
    2)Appraisal
    Costs of monitoring and inspecting products before products are released to customers (i.e. measurement equip, quality audits)
    3)Prevention
    Costs involved reducing number of defective products (i.e. customer surveys, field trials, quality engineering)

    The chapter in my book also mentions quality cirles which are groups of employees of all different levels who get together and discuss problems and ideas etc.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Balnced Scorecard + Benchmarking

    Forgot about cost reduction! (At least typing these notes it helping me to revise, hasn't been sinking in too well so far..)

    Definition
    Cost Reduction leads to real and permanent reductions in unit costs without impairing suitability for use intended.

    Cost Control aims to simply acheive the targets originally accepted.

    Implementing a Cost Reduction Programme
    Following conditions need to apply to be sucessful:
    1) A clear purpose (i.e. reduce labour costs by 20%)
    2) A good reason (i.e. economic survival)
    3) Commitment and involvement by senior managers
    4) Excellent communication with workforce and possible cosultation
    5) Gradual introduction

    Appliaction of Cost Reduction Techniques

    Two important techniques are:

    1) Target Costing - subtracting a desired profit from a market proce and it is then up to the designers to plan how product can be manufactured for that cost
    2) Value Engineering - a philosophy of designing products which meets customers needs at the lowest cost while assuring the required standard of quality and reliability. It eliminates the costs of anything that doesn't add value in the customers eyes.

    (There is also a note that the 'flip side' of cost reduction is value enhancement, namely, getting the best value from the resources that are used in the organisation).

    I'm hedging my bets that there will be a mention in section 2 of any of the above I dont think there has been yet.

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Balnced Scorecard + Benchmarking

    Thanks Kate, You've been a star!!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Balnced Scorecard + Benchmarking


    dont worry, nothing of this came in the exam except the target costing part

    good luck

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Balnced Scorecard + Benchmarking

    yeah sorry about the info overload, no hard feelings ay!? :lol:

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