Performance Management

• Performance management

  A continuous cycle of planning, tracking, analysing performance, and making adjustments within all activities of a business in order to ensure optimum quality output
• Quality Improvement

  • Focus on: Business Functions, Ratios, Other techniques/tools
• Internal Quality management

  Performing an audit, especially an internal audit, is a great opportunity for a company to learn and grow. Internal audits are important to any business because they can evaluate your processes and ensure that you are meeting quality standards and conformance
• Quality in a service


  The customer's perception of quality is of utmost importance
• Expectations that customers may seek from a business

  • List any five
• Importance of internal quality management

  Allows a company to learn and grow, evaluate processes, and ensure meeting quality standards and conformance
• Four main objectives of the financial function in terms of ratios

  • Maximise profits, Increase profitability, Ensure liquidity, Remain solvent
• Current Capital Ratio (Current Ratio)

  Currents assets are bank, cash float, debtors, inventory, petty cash. If it's too high then too much money in bank, debtors is too much or too much stock
• Acid test ratio (Quick ratio)


  Inventory is eliminated because it's the most difficult current asset to convert into cash. This formula checks our liquidity independent of inventory
• Return on investment (ROI)


  Net profit/own capital x 100. Measures the ability of the business to generate a profit with the capital that was invested
• Solvency ratio: ability to pay debts
• How a retailer could use the solvency ratio as a measure of quality of performance

  Discuss
• How the production department of a retailer could improve their quality of performance

  Give possible suggestions
• Effectiveness of a retailer's employees using self-evaluation as a means of improving their quality of performance

  Evaluate
• Supply chain


  Consists of all activities relating to the flow of goods, services and information that come into and out of a company, from the creation of goods and services through distribution to end users (consumer)
• Difference between supply chain and marketing activities

  Supply chain is broader than marketing channels. Supply chain begins with raw materials and delves deeply into production processes and inventory management. Marketing channels are focused on bringing together the elements which can most efficiently deliver the right marketing mix to the customer in order to maximize value
• Effective supply chain planning

  Allow a business to meet customer demand precisely, providing exactly as much product as consumers are interested in purchasing, at the times and places that they want to purchase it
• Sourcing raw materials


  Finding reliable and suitable suppliers and finding ways to create a good working relationship over time
• Manufacturing


  Ensuring a high level of quality at every stage of manufacture not only results in satisfied customers, but also reduces the work that must be done further down the supply chain
• Delivery


  The logistics of supplying products to consumers is highly complex and involves processing orders, scheduling delivery, dispatching loads, invoicing customers, receiving payments, and countless other minute tasks. The business may therefore consider outsourcing this major task to a logistics company
• Returns


  A supply chain must be flexible enough to handle returns of defective products, address customer concerns about delays, and issue cancellations and refunds in a timely fashion where appropriate
• Total quality management


  Explain what is meant by the term
• Advantages for a clothing retailer when it undertakes efficient quality control

  Describe
• How the financial department of a clothing retailer can assist to improve the quality of performance

  Evaluate
• How the purchasing manager can help to improve the quality of performance of a clothing retailer

  Discuss
• Risk management


  Process of identifying and acceptance or mitigation of uncertainty in investment decisions
• Steps in risk management

  Risk identification, Risk analysis, Risk assessment and evaluation, Risk mitigation, Risk monitoring
• Importance for Mr Price's management team to set sales targets

  Why
• Method that Mr Price could use to evaluate the quality of performance in their purchasing department

  Discuss
• Link between risk management and quality of performance


  Use an example to illustrate
• Logistics management


  Technology affects a firm's ability to communicate with customers. Fast shipment options allow businesses to move products over a large geographic area. When customers use technology to interact with a business, the business benefits because better communication creates a stronger public image. It is therefore imperative to allocate money in the budget to upgrade the IT department. There should be back-up storage and retrieval solutions in order to streamline all working in the organisation
• Total quality management (TQM)


  Organizations should not assume they know what the customer wants. It is important to understand the voice of the customer, using tools such as customer surveys, focus groups. Using these tools, organizations can gain detailed insights as to what their customers want and better tailor their services or products to meet or exceed customer expectations. Then only can total customer satisfaction be achieved
• Benchmarking


  Process where the business looks at its own methods to perform its tasks and then compares it to the methods used by businesses that are top of their game
• How benchmarking is done in retail businesses
• Balanced scorecard (BSC)


  Developed to describe the key outcomes that the business would like evaluate in order to improve. The following are the elements used to identify and describe the role they play in the business: Financial perspective, Customer perspective, Internal perspective, Learning and growth perspective
• Value chain analysis


  A business needs satisfied customers to be successful. Therefore the concept of adding value for the customer and other stakeholders should be the aim. It is important to look at the entire business process to decide where value is added in a cost-effective manner to enhance the quality of the product or service rendered. If a business is not involved in something that is not their core-strength, that particular activity will probably not add value to the business process. Example, a small bakery employing four people may not have sufficient work to warrant a full time person to handle the payroll. it will be best if they outsource this payroll function.
• Importance for a clothing retailer to measure the quality of performance of the business

  Explain
• How developments in information technology can impact the quality of performance of a retailer

  Explain
• How the marketing department of a retailer can improve the quality of performance of its brand by referring to: people, process, physical evidence

  Evaluate
• How the production manager could help to improve the quality of performance in their department

  Discuss