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Lecture 8 - The Voice of the Market (Chapter 6)

Lecture 8 - The Voice of the Market (Chapter 6). Benchmarking, Performance Monitoring. “Voice of the Market”. Beat in Class Benchmarking. Benchmarking. “Benchmark”. Purposes of Benchmarking. Difficulties in Monitoring and Measuring Performance. Commonly Benchmarked Performance Measures.

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Lecture 8 - The Voice of the Market (Chapter 6)

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  1. SJSU Bus. 142 David Bentley Lecture 8 - The Voice of the Market (Chapter 6) Benchmarking, Performance Monitoring

  2. SJSU Bus. 142 David Bentley “Voice of the Market”

  3. SJSU Bus. 142 David Bentley Beat in Class Benchmarking

  4. SJSU Bus. 142 David Bentley Benchmarking

  5. SJSU Bus. 142 David Bentley “Benchmark”

  6. SJSU Bus. 142 David Bentley Purposes of Benchmarking

  7. SJSU Bus. 142 David Bentley Difficulties in Monitoring and Measuring Performance

  8. SJSU Bus. 142 David Bentley Commonly Benchmarked Performance Measures

  9. Productivity 10/07/10 SJSU Bus 142 - David Bentley 9

  10. Productivity – Macro vs. Micro Macro productivity Country as a whole or a region of the country Sectors of the economy Individual industries Micro productivity A small work group or team An individual worker 08/28/09 SJSU Bus 142 - David Bentley 10

  11. Productivity - Micro Productivity = Output / Input Single factor productivity Usually labor productivityinput Multi-factor productivity Usually labor, material and overhead productivityinputs, where overhead may include fixed and variable Rev. 10/07/10 SJSU Bus 142 - David Bentley 11

  12. Productivity - Micro Single factor productivity Example: Carpet laid in 8 hours = 720 sq yds; crew size = 4 installers; hourly productivity per worker = ? 720 sq yds / 4 workers x 8 hrs = 22.5 sq yds/hr Multi-factor productivity Example: 7,040, valued at $1, units produced in a day; 5 workers paid $25 per hour; fixed OH = $520 per day; variable overhead = 200% of direct labor cost (7,040 units x $1.00) / $1,000 + $520 + $2,000 = 2 Rev. 05/30/07 SJSU Bus 142 - David Bentley 12

  13. Productivity – TFP & MFP Total Factor Productivity (TFP) Effects in total output not caused by inputs Incorporates technological progress, management techniques, smart work Developed by Robert Solow (MIT) Won Nobel Prize for Economics in 1987 Multifactor Productivity (MFP) Considers labor, material, and capital inputs More reasonable than labor productivity in most cases Rev. 08/30/10 SJSU Bus 142 - David Bentley 13

  14. SJSU Bus. 142 David Bentley Benchmarking and Company Objectives

  15. SJSU Bus. 142 David Bentley Best-In-Class Benchmarking

  16. SJSU Bus. 142 David Bentley Best-Of-The-Best Benchmarking

  17. SJSU Bus. 142 David Bentley Business Process Benchmarking Business Process Questions

  18. SJSU Bus. 142 David Bentley 5W2H Approach • What? Subject • Why? Purpose • Where? Location • When? Timing/sequence • Who? People involved • How? Method • How much? Cost/impact

  19. SJSU Bus. 142 David Bentley Eliminate Unnecessary Tasks

  20. SJSU Bus. 142 David Bentley Change the Sequence or Combination

  21. SJSU Bus. 142 David Bentley Simplify the Task

  22. SJSU Bus. 142 David Bentley Select an Improvement Method

  23. SJSU Bus. 142 David Bentley Robert Camp’s 10 Steps

  24. Robert C. Camp • Principal of the Best Practice Institute • Retired Manager, Benchmarking Competency, Quality Office, USCO, Xerox • Author of three books on benchmarking

  25. SJSU Bus. 142 David Bentley Robert Camp’s 10 Steps

  26. SJSU Bus. 142 David Bentley Robert Camp’s 10 Steps

  27. SJSU Bus. 142 David Bentley Robert Camp’s 10 Steps

  28. SJSU Bus. 142 David Bentley Leading and Managing the Benchmarking Effort

  29. SJSU Bus. 142 David Bentley Leading and Managing the Benchmarking Effort

  30. SJSU Bus. 142 David Bentley Leading and Managing the Benchmarking Effort

  31. SJSU Bus. 142 David Bentley Leading and Managing the Benchmarking Effort

  32. SJSU Bus. 142 David Bentley Problems with Benchmarking

  33. SJSU Bus. 142 David Bentley Summary

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