Management Tools in DR MAN0J MISHRA

Strategy C N L U , PAT N A
Summary

Benchmarking: Definition of Benchmarking,

Approaches to Benchmarking, Benchmarking
Practices Worldwide
Completing Strategy – Reengineering: Strategic
Processes, Operational Processes

Enabling Processes Systematic Approaches,

Clean Sheet Approach
Reverse Engineering
The Balanced Scorecard.

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Management Tools in Strategy

Change is persistent and is one of the most important business issues

Change provides opportunities for growth and innovation
Also provides threats disorientation and upheaval.
Vertical integration
 mergers
new technologies
 stock less or just in time distribution
TQM
 continuous improvement
business reengineering
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Management Tools in Strategy

Organizations have to ensure that there are quicker

To reach the market
 Innovative
Flexible
Customer focused
Capable of handling rapid change

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Benchmarking: Definition of Benchmarking

Benchmarking has revolutionized the culture of business all over the world
It has transformed the way business is run all over the world
It is used in every sector like; healthcare, insurance, financial services,
construction, real estate, banking, education and local government
It is likely to become more widespread in the near future.
Benchmarking is based on the premise that in all processes, including:
supply, production, sales, service, the organization has achieved world class
competitiveness

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Benchmarking: Definition of Benchmarking

It can be defined as a process for improving performance by constantly

identifying understanding and adapting best practices and processes
followed inside and outside the company and implementing bees
adapted practices.
Strategic benchmark: improving performance by studying long term
strategy and best practices.
Competitive benchmarking of performance benchmarking: used to
compare big best performers in the industry for product and services.

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Benchmarking: Definition of Benchmarking

Process benchmarking: used to improve process or activities by

benchmarking with other companies in the industry.
Functional benchmarking or generic benchmarking: used to improve
business processes activities from different business sectors involved in
similar function.
Internal benchmarking: Business unit of company at different locations are
used for sensitive type of benchmarking
External benchmarking: Used by company to seek help of organisation get
succeed on account of their practices learning from high end performers

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Approaches to Benchmarking

Planning
Determine what to
benchmark Analysis
identify the key
performance indicators Understand
Integration
performance gaps
identify benchmarking
Communicate findings
Action
partners predict the future
performance levels and gain acceptance
determine data Implement and monitor
Establish functional
collection method progress
goals and
collect data implementation plans Measure results against
stakeholders wants and
needs
Recalibrate benchmarks

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Approaches to Benchmarking

Benchmarking is a learning process aimed at ensuring

 best performance
it also focuses on improving any given business process by exploiting best practices
by discovery the specific practices that result in high performance

Analysing an understanding the way business is practiced all over the

world the skills can be gained by
Reading articles books and other publication on benchmarking
Watching videos on benchmarking
Through inform liaison with benchmarking experts
Attending benchmarking training events and in benchmarking conferences
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Benchmarking Practices Worldwide
oThe number of companies following benchmarking are increasing day by day.
oSome organizations when able to create significant market advantage.
oDo Europeans centre for total quality management (ECTQM)
oThe benchmarking exchange (TBE)
oThe benchmarking centre (UK)
oA survey of 235 organizations at different stages of benchmarking activities conducted,
success depended on the following:
• Understanding of benchmarking
• Following the RIGHT methodology in benchmarking
• Influencing the strategic decision making process
• Allowing effective deployment of resources
• Process improvement
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Completing Strategy

Benchmarking brings operational efficiency

Strategic decision making occurs on the basis of 3 dimensions
1. Product characteristics
2. Price
3. Market opportunity

 Play offs depend on the number of players in the market

 Companies with unique feature that attract customers join the hard and become indistinguishable from
the others
 SHIFT in strategy Due to benchmarking they fail to focus on some areas that they were deoing before
benchmarking

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Completing Strategy

Best practice need not equal best strategy

Best practice benchmarking of an adopted as an important tool for improving operational efficiency can
be double edged sword
Manager should be careful not to transform benchmarking from a purely process related technique in to
and overriding goal of strategy decision making
When computer is benchmark around a single strategy they may derive subnormal return.

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Reengineering:

Business process reengineering is improvement of philosophy

Reengineering achieves performance improvements by
Redesigning operational process
Maximising the value added content
Minimising all production related cost

Re engineering has wider implications than designing an operational process and implement in new
technology
Firm should write down; job descriptions, multi functional skills, teamwork ability, priority, review
reward system

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Reengineering:

Ambition Business process re engineering aims at large scale

improvement unlike TQM re engineering seeks
redesign of current process control configuration
and not just optimization.
Process focus Business process reengineering is concerned
weather fundamental business processes that
underlie the operations of an organization. It has
nothing to do with organizational boundaries.
Hence reengineering does not change the focus of
organizational process.

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Reengineering:

Questioning fundamental BPR process identifies questions and recasts

assumptions fundamental assumption and beliefs pertaining to
the design of an organise
IT as an enabler The success of many redesign programs depend on
the additional advantage offered by the information
technology. It allows the work to be accomplished
in the way that are not possible manually
Measurement of results not Re engineering focusses on the new measures of
activities performance that stresses on customer satisfaction,
performance of process and throughput efficiency
and not the individual activities that are part of the
process.

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Strategic Processes

Strategic process prepares the organization for the future

They set a direction for the organization.
Activities under strategy process are:
 STRATEGIC PLANNING
 PRODUCT SERVICE DEVELOPMENT
 NEW PROCESS DEVELOPMENT
 DEVELOPING AND COMMUNICATING THE MARKETING MESSAGE

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Operational Processes

Operational process help an organization to oversee the day today

functions
‘Winning’ the customer
Satisfying a customer
And supporting the customer

 While marketing type process makes promises in the marketplace,

Operational process actually deliver on those promises
the processes are part of the firm's interaction with the customers and
suppliers in the day today activities of business
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Enabling Processes

 Enabling process enables the smooth flow of strategic and operational processes
Management of human resource accounting in finance and management of information systems comes
under this category
Once an organization decides on the process to be redesigned It has to decide on a new design
The process is usually redesigned in order to make it better, cheaper, faster to deliver, better service,
ensure higher level of satisfaction foster order increase rapid response cheaper or faster activities highest
level of efficiency,
Redesigning a process involves eliminate all non value adding activities and streamlining or value adding
activities.
 The rules followed can be represented by an acronym ESIA (Eliminate All Non Value Adding Activities)

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Enabling Processes

SYSTEMATIC APPROACHES CLEAN SHEET APPROACH

Maps out and attempts to understand the
existing process
Works systematically to create a new process
to deliver desired results
The process allows some aspect of existing
process to be retained in the process proposed
a process
Fundamental we think in the way product or
service is delivered designing new process
from scratch.
All existing process are discarded under this
process fundamental rethink of the process is
undertaker

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Reverse Engineering

Reverse engineering is one step of the development process

The first step is the second movers awareness development process in the
development of awareness of the status.
The second mover recognizers that another firm has introduced a product in
to the marketplace.
 The second stage involves actual reverse engineering.
 In this stage the mover obtains the innovator’s product and dismantled and
analysed it in order to understand how product was designed and
manufactured.
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Reverse Engineering

This process can be costly time consuming and difficult.

The third stage relates to implementation once an innovator
product is reverse engineered, one must obtain the know how
during reverse engineering to design and deliver the prototype.
Second mover introduces is the product into the market in the last
stage.
 Various factors determines how quickly the new product and
replaces innovated product and captures market share
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The Balanced Scorecard

Developed by R.S. Kaplan and D.P. Nortan have device data balance scorecard a set of measures that
gives top managers a quick but comprehensive view of business.
It consists of financial measures that measure the action already taken.
It also contains operation measures such as
customer satisfaction
 internal process
and organizational innovation and improvement activities

 the balanced scorecard can be compared with dials and indicators in aeroplanes cockpit.
 All the information is required while navigating and flying an airplane relying on any single measure
can be fatal.

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The Balanced Scorecard

Using balance scorecard managers look at business in terms of

four dimensions
1. How do customer see us?

2. What must we excel at?

3. Can we continue to improve and create value?

4. How do we look to shareholders?

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 The Balanced Scorecard

How do customer see us?

GOALS MEASURES
NEW PRODUCT PERCENT OF SALES FROM NEW PRODUCT
PERCENT OF SALES FROM PROPRIETARY PRODUCT
RESPONSIVE SUPPLY ON-TIME DELIVERY (DEFINED BY CUSTOMER)
PREFERRED SUPPLIER SHARE OF KEY ACCOUNTS’ PURCHASES
RANKING BY KEY ACCOUNTS
CUSTOMER PARTNERSHIP NUMBER OF COOPERATIVE ENGINEERING EFFORTS

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 The Balanced Scorecard

What must we excel at?

GOALS MEASURES
TECHNOLOGY CAPABILITY MANUFACTURING GEOMETRY VS COMPETITION
MANUFACTURING EXCELLENCE CYCLE TIME
UNIT COST
YIELD
DESIGN PRODUCTIVITY SILICON EFFICIENCY
ENGINEERING EFFICIENCY
NEW PRODUCT ACTUAL INTRODUCTION SCHEDULE VS PLAN
INTRODUCTION

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 The Balanced Scorecard

Can we continue to improve and create value?

GOALS MEASURES
TECHNOLOGY LEADERSHIP TIME TO DEVELOP NEXT GENERATION
MANUFACTURING PROCESS TIME MATURITY
LEARNING
PRODUCT FOCUS PERCENT OF PRODUCT THAT EQUALS 80% OF
SALES
TIME TO MARKET NEW PRODUCT INTRODUCTION VS COMPETITION

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 The Balanced Scorecard

How do we look to shareholders?

GOALS MEASURES
SURVIVE CASH FLOW

SUCEED QUARTERLY SALES GROWTH AND OPERATING

INCOME BY DIVISION.

PROSPER INCREASED MARKET SHARE AND ROE

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The Balanced Scorecard- MOVING FORWARD

 PREVENTS INFORMATION OVERLOAD

SEVERAL NEEDS FULFILLED
MANY STRATEGY IN SINGLE MANAGEMENT REPORT
ALL IMPORTANT OPERATIONAL MEASURES TOGETHER

IT CANNOT BE IMPLEMENTED WITH INVOLVING SENIOR MANAGERS

CLEAR IDEA OF COMPANY’S VISION AND PRIORITIES
APPROACH TO PERFORMANCE MEASURE
CROSS FUNCTIONAL INTEGRATION
CUSTOMER SUPPLIER PARTNERSHIP
GLOBAL SCALE
CONTINUOUS IMPROVEMENT
TEAM ACCOUNTABILITY
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Summary

Benchmarking: Definition of Benchmarking,

Approaches to Benchmarking, Benchmarking
Practices Worldwide
Completing Strategy – Reengineering: Strategic
Processes, Operational Processes

Enabling Processes Systematic Approaches,

Clean Sheet Approach
Reverse Engineering
The Balanced Scorecard.

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