ASQ - Ch 8 - Management Skills & Abilities (P 132 - 198)

Management Styles

"Managers need to have a good understanding of organizational theory, what drives people, and how learning occurs."

New Employee Assimilation (Mgr Role)

-Tell new employee what performance is expected, and how/when employee's performance will be evaluated -Provide any needed skills training and/or education the new employee will need to succeed -Coach employee as he/she develops competency to perform work assigned) -Provide effective performance feedback to enable the employee to correct and/or improve performance -Support and recognize work done well -Support employee's self-development

Advantages to organization as systems thinking

-organization is freer to commit to more than one approach or best practice relevant to achieving their strategy -organization can integrate multiple approaches allowing (a) choice of best management method/tool for situation, (b) time to comprehend the principles and practices involved with each approach chosen, adapting each approach as needed, (c) more effective integration of each individual technique or tool with other approaches -with the advent of new, more easily adaptable approaches and methodology, the organization is better equipped to subsume the new approach into its system, without the trauma individually encountered -Systems thinking makes understanding relationships, system to system, easier. This is especially important in understanding and managing supply chain relationships. -systems thinking, when it permeates the entire organization, causes all employees to think of the interrelationships within their organization, as well as beyond the physical boundaries to the external stakeholders (that is customers, suppliers, investors, regulatory agencies, community, and so on)

Quality Supervisor

Administers the company's quality program within a defined function of the organization. Has direct reports that implement some aspect of the policies, procedures, and processes of the quality program.

Vertical Upward Flow of Communications

Info relayed from lower levels to higher levels of company. Gives higher levels a chance to learn about what is happening in lower levels. If management can act on the information from below, it can motivate the lower levels. Disadvantage: as communication mines up, each manager puts their "spin" on things and may not be the same. To overcome this have open door policies, surveys, questionnaires, shift meetings etc.

Quality Analyst

Initiates and/or coordinates quality-related data collection from production and service activities, and interprets and reports these data using statistical techniques.

Risk Technique: Conduct a what-if-brainstorming session

Inspections loop for lapses in compliance with regulations, but also surface opportunities to decrease risk. Surprise drills are good. Potential risk-type questions can be included in internal auditing. Continual question whether the organization's product, in the end user's hands, will be safe to use over the product's life cycle, including disposal.

Quality Inspector

Inspects and reports on materials, processes, and products using variable or attribute measuring instruments and techniques to ensure conformance with the organization's and customers' quality specifications.

types of financial statements

Internal statements - produced at macro level for management oversight and decision making. These statements present info about the whole organization. Micro-level reports are used at the department level or below and are oriented for operations, production, use of resources etc. External statements - prepared for disclosure to SEC, lending institutions, investor-owners, public and other interested agencies. These are used by third-party auditors and accountants

Interview Types

One-to-one interview - hiring manager alone with candidate Panel interview - candidate with more than one interviewer simultaneously Hierarchical interviews - candidates who pass interview with lower-level manager is interviewed by next higher-level manager with possibility of being rejected at succeeding level Peer interview - candidate interviewed by his/her potential peers Group interview - candidate is placed in a group with other candidates (sometimes given scenarios) and required to respond to questions from several interviewers and interact with other candidates (evaluate against various criteria)

Program Evaluation & Review Technique (PERT)

Event oriented. Requirements: •All project individual tasks must be included in the network •Events and activities must be sequenced in network to allow determination of critical path •Time estimates must be made for each activity in network as stated as 3 values: optimistic, most likely, and pessimistic elapsed times (must be realistic times) •Critical path and slack times for project are calculated. It is the sequence of tasks which requires the greatest expected time. The critical path of sequence which require the greatest expected time and events on the critical path have a slack time of zero. The critical path is calculated after analyzing the network. Slack time (S) for an event is the latest date an event can occur or can be finished without extending the project (TL) minus the earliest date an event can occur (TE). For events on critical path TL=TE and S=0 (Kerzner)

Business functions classification

External - having dealings with outside world Internal - operate within boundaries of company

Cash Flow Statement

Financial report that shows incoming flow of cash and the outgoing flow of cash for the reporting period. Purpose is to make a determination as to whether the organization requires external financing or if the cash flow is sufficient to meet debt obligations and dividend payments. The statement often breaks down the organization's cash flow into 3 categories: - Cash-related to operations (net income, depreciation and amortization, deferred taxes and wages, net charge in accounts payable, net change in accounts receivable, net charge in inventory) -Cash related to investing activity (capital expenditures, proceeds from sale of property) -Cash related to financing activity (increase in notes payable, repayment of debt, increase in common stock, payment of dividends) -Net income in cash and cash equivalents -Cash and cash equivalents at beginning of year -Cash and cash equivalents at end of reporting period

Profit & Loss Statement or Income Statement

Financial report that shows sales, cost, expenses, and profits for a given period of time (e.g., quarter of a year). The components of an income statement are: a) Net sales - represents the organization's gross-income from the sales of products and services (revenue in not-for-profit organizations). When all costs and expenses are deducted from net sales, a profit or loss results b) Interest income - amount of net interest earned on investments fro the statement period. This other income is deducted from expenses. c) Total cost & expenses - this amount is deducted from net sales to show income before taxes. Incomes taxes are then deducted to arrive at either a net profit or net loss.

Budget Types

Fixed budget - provides a single amount in various categories. This figure is firm regardless of production levels or other activities. Flexible budget - allows for variation in the volume of production or in the amount of activates. If production volume goes up, requiring increased labor and expenses, then a flexible budget would accommodate this change. Zero-based budgeting - manager must assign resources to specific activities in a prioritized manner. Based upon the funds available and on the scope of the department, a certain level of activities will be funded.

Risk Technique: Complete & Analyze Process Maps

From process maps of key processes, brainstorm where points of risk may be embedded in the process.

Nonverbal communication Signals during F2F Meetings (Schermerhorn)

Hand movements, eye contact, body posture, use of interpersonal space (proxemics), head movements, leg positions. Ivanceevich says that while nonverbal signals can e spontaneous, some nonverbal signals are conscious and deliberate. Morrison discussed the perils of inappropriate body language.

Human Relations Theory

Hawthorne effect: focus on workers and involve them

Deming's thoughts on Evaluation Process

He said evaluation process was demeaning and non-productive for all employees.

Internal Business Functions

IT Finance HR Marketing Product Development Sales & Customer Service Materials Management Inventory Management Production Control Engineering (Product, Process, Industrial, Facilities) Research & Development Operations Quality

7 Core Processes Necessary to Deliver Operational Knowledge (Pearson)

IT has to deliver right information to the right people at the right time. An appropriate system of measurement must also be determined. 1. Local action - local staff is provided with ability to resolve problems with SPC and other control methods. 2. Management action - cross-functional activities and various teams require management authorization. 3. Exploratory analysis - a feedback loop is provided to work with new situations (exploring, quantifying, analyzing, and verifying corrective actions). 4. Knowledge building - a database to provide information is essential. 5. Complex systems - simulation and real-time analysis of complex systems must be used. 6. Knowledge management - organization must change from a batch mode operation to real-time information processing. 7. Scientific creativity - breakthrough innovations are not achieved with incremental improvements (need for creative problem solving).

Risk management continuous process (Frank)

Identify - search for and locate risks before they become problems that adversely affect the project or activity Analyze - transform risk data into decision -making information Plan - translate risk info into decisions and actions (both present and future) and implement those actions. Track - monitor the risk indicators and actions taken throughout the project or activity Control - adjust for deviations from planned actions Mitigate - reduce impact of any unforeseen event Communicate - provide visibility and feedback data, internal/external to project or activity on current and emerging risks. This is the key element to a successful risk aversion program.

Late performance review problems

The benefit of corrective action feedback to the employee is lost, pay increases are link to reviews and penalize the employee, the longer past due, the more difficult it is to give a fair assessment. The employee is frustrated because the review seems important.

Balanced Scorecard

basic financial accounting model and reports are based on the past events. Balanced scorecard was developed from a need to develop a measurement tool that includes both leading and lagging indicators. basic model contains 4 high-level groups of measurement -a) financial perspective, b) customer perspective, c) internal business perspective, and d) learning and growth perspective. Can be adapted to any organization/function.

Classical Organizational Theory

bureaucracy is the ideal org structure

Concurrent engineering/simultaneous engineering

by manufacturing companies to expedite development and launch of new products.

Explicit Knowledge

captured and recorded (policies, procedures, etc.)

Transformational Leadership

charismatic, elevates subordinates

Autocratic Management

concerned with developing efficient work places and have little concern for people. Typically make decisions without input from subordinates, relying on their positional paper.

job analysis

focused on tasks contained within a job and the knowledge and skills required

competency analysis

focuses on competencies of individuals performing the job The 5 factors of competence - KESAA K - knowledge E- experience S-skills A-aptitude A-attitude

Competency analysis conduction

gathers input to: -establish a job's level within a hierarchy of job levels and, as such, contribute to a determination of the compensation level of a job -determine the exemplary performance in a work unit performing similar tasks for the purpose of setting or modifying performance standards -help in selecting the members of a team -augment the job description with competency criteria -assess feasibility of job enlargement, job enrichment and empowerment -help to establish the specifications for a new hire -conduct a competency gap analysis (desired vs present) -set objectives for improving competency -determine and articulate the organization's core competency

Transactional Leadership

getting the work done, clear tasks, providing resources

Senge Organizational learning

goes beyond the capture of knowledge to include gaining a deeper and complete understanding of how things work and involve 5 learning disciplines: 1. Personal mastery - a continual drive for personal & organizational 2. Mental models - understanding how our cognitive schema affect our views of world and continually improving the accuracy of models 3. Shared vision - working jointly toward a common view to which all aspire 4. Team learning - use of dialogue to move beyond mere conversation to true joint understanding 5. Systems thinking - understanding the multiple cause-and-effect relationships and how they are interconnected in organization's society, and other systems

Risk Technique: Use Failure Mode & Effect Analysis (FMEA)

help determine what could go wrong and what impact it could have on the organization's processes and product. The intent is to prevent failures and their effects (see Chapter 13)

Network Rules

•Before an activity may begin, all activities preceding it must be completed •Arrows imply logical precedence only •The length and direction of the arrows have no meaning •Any 2 events may be directly connected by only one activity •Event numbers must be unique •Network must start a single event and need at a single event Common applications of network planning include the Program Evaluation and Review Technique (PERT), the Critical Path Method (CPM) and Gantt Charts

Complexity Theory

interaction between parts of system as well as system and environment

Human Factors Engineering (HFE)

interdisciplinary approach to evaluating and improving the safety, efficiency and robustness of work systems, such as healthcare delivery). Practice of designing products so that the user can perform required use, operation, service and supportive tasks with a minimum of stress and max efficiency. It is designing for the user rather than forcing the user to accommodate to the design. HFE scientists study the intersection of people, tech, policy and work across multiple domains, using an interdisciplinary approach that draws from cognitive psychology, organizational psychology, human performance, industrial engineering systems, and economic theory to address: -task analysis & design -device evaluation & usability -communication, collaboration & teamwork -training -systems resilience, adaption and failure HFE engages engineers by getting them involved in design; design by employees. These systems are more safer, more efficient, cost less, less system downtime, maintenance and injuries are reduced.

Galbraith's thought on cross functional collaboration

lateral coordinated efforts. Departments or functions on the same level (lateral) should be grouped together to produce required output. The units are interdependent and should frequently communicate.

Total Quality Management (TQM)

look across the organization to see how you are doing; be more knowledgeable and committed to mission

Myers-Briggs Type Indicator (MBTI) Personality Test

management style personality tool. Based on Carl Jung's work. Primarily concerned with valuable differences in people that result from where they like to focus their attention, way they prefer information, way they make decisions and kind of lifestyle they adopt. Each combination types has its own set of strengths. There are 16 possible characteristic combinations. None are better than others. Character assessments' don't inform on a person's ability. Extroverted vs. Introverted Sensing vs. Intuitive Thinking vs. Feeling Judging vs. Perceiving E gets energy by interacting with others while I prefers to be alone S wants a lot of detailed info in order to make a decision and is here-and-now oriented while N will go with a general hunch and is future oriented T makes decisions based on logic and facts, while F places more consideration on emotional impact J people are concerned about getting things organized and completed, while P wants to keep exploring alternatives -EI Scale (Where do you prefer to focus your attention) -SN Scale (How do you acquire information) -TF Scale (How do you make decisions) -JP Scale (How do you orient toward the outer world)

Sarbanes-Oxley Act of 2002 (SOX)

mandates strict requirements for financial accounting and for top management's responsibility and accountability in disclosing the financial status of their organization. Enacted after a series of financial scandals.

Risk

probability of an undesirable event occurring and the impact of that event occurring. Failure of a project or venture can be experienced in a combo of: •The product or activity does not meet expected performance levels •The actual costs are higher than budgeted costs •The delivery or timing of the product or activity is too late Additionally, performance, cost and schedule risks can be segmented into 5 areas: technical performance, supportability risk, environmental risk, cost risk, schedule risk. There is a risk of moving too fast and risk of not moving fast enough.

Participative Management

primarily concerned with people but might also attempt to balance this concern with business concerns. Encourage others to be active in decision-making process

Management by Fact

reinforced by Baldridge, decisions based on performance measures

role of management

to plan, carry out, monitor, and initiate action to maintain the appropriate focus and results, and ensure the viability of the organization

Tacit Knowledge

typically not recorded; no guarantee it will be passed on to next generation

Project cash flow

typically spread the outlay of cash across the time period of the project (e.g., expenditures made in each month by category of expenditures). These usually do not involve incoming cash

Netiquette

virtual team etiquette with the intention of improving effectiveness and efficiency

Risk - 3 primary components

•An event (unwanted change) •Probability of occurrence of that event •Impact of that event (amount at stake)

Core competencies (Prahalad)

•Collective learning in organization, especially how to coordinate diverse production skills and integrate multiple streams of technology. A core competency should: •Provide potential access to a wide variety of markets •Make a significant contribution to the customer •Be difficult for competitors to imitate In order for it to remain a core competency, the organization must continually increase the depth of knowledge and ability of employees to utilize it in new ways

Benefits of Project Management

•Identification of scheduling time limits •Allocation of functional responsibilities •Selection of a tradeoff analysis methodology •Minimizing the need for continuous reporting •Measurement of accomplishment against plans •Early identification of problems to allow for corrective action •Knowing when objectives cannot be met or will be exceeded •Improved estimating capabilities for future planning

Other Performance Measurement Systems (Kueng)

•Self-assessment tools (Deming Prize, Malcolm Baldrige) •Workflow-based monitoring using automatic or semi-automatic controls •Statistical process control •Activity based costing •Capability maturity models for software evaluation •ISO 9000 systems

Process-Oriented Performance Management System - PPMS (Kueng)

•Takes measurements on process and provides information to the process owner. •Gathers data on relevant indicators of performance of the process •Compares current value against historical and target values •Provides the results to the process owners and users

Baldrige Performance Excellence Program (BPEP)

*Visionary Leadership *Creating a sustainable organization *Communication and organizational performance *Strategy development and deployment *Customer-driven engagement and excellence *Performance measurement, analysis, review, and improvement *Management of information, knowledge, and IT *Building a competent, effective, supportive, and valued workforce *Organizational and personal learning *Designing, managing, and improving work processes with a systems perspective and emphasis on creating value *Achieving measurable and effective process, product, customer-focused, workforce-focused, leadership- and governance-focused, financial- and market-focused performance outcomes *Managing for innovation * Social responsibility Baldrige considers companies with 500 staff or less a small company

Human Resource Functions

- HR Planning (including Succession Planning) -Staffing (Recruiting, interviewing, selection, testing, hiring, assimilating, relocation admin, promotion, transfer administration, job fairs) -Training (employee orientation, management/supervisory training, non-management skills, training) -Compensation (wage/salary administration, executive compensation administration, job analysis, job descriptions, competency analysis) -Management performance appraisal -Non-management performance evaluation -Payroll processing -Benefits management -Labor relations (complaints/disciplinary procedures, EEOC compliance, affirmative action admin, union/management relations, contract negotiation) -Safety, security and employee welfare, safety program admin, OSHA compliance assessments, security force management, EAP -Employee termination/layoff/medical leave (separation, outplacement, unemployment compensation, worker's comp) -Organization development (employee satisfaction surveys, organizational diagnoses, organizational interventions) -Public relations (community relations, fund drives -Personnel records -Other (employee communications, publications, personnel research, food service, library management, travel arrangement admin, admin services, facility maintenance

Job Description Contents

- Position Title -Basic Job Functions To whom the individual reports -Titles of positions reporting to individual -Knowledge and skill requirements (educational experience ) -Limits of authority -Specific job functions -Performance standards -Special requirements (e.g., lifting amount) -Quality activities if supplier quality management, product reliability, quality of manufactured product, quality of training and organization development, clarify of product application and quality needs, quality of info and processes to support it

Risk Technique: Audit Financial Statements & Supporting Documents

- financial risk exposure Is most common but is often the most cost-effective to fix/prevent. Management should periodically audit to keep accountants on their toes.

Management Styles

-Autocratic Management (make decisions on their own and then announce them to the work group) -Participative Management (Management by Walking Around) -Transactional Leadership -Transformational Leadership -Management by Fact -Coaching -Contingency Approach

Organizational Risks

-Events ranging from those causing minor disruption to those catastrophic events that affect the organization regardless of its location, financial stability, and so on. -Events that can affect each organization differently; a minor disruption to one organization but a major disaster for another

Measuring Outcomes of KM

-Focus on KM system on organization's strategic objectives and measuring tangible outcomes -define and clearly communicate the K measures and how they will be used -create interdependent KM measures tied to the organization's measures of its outcomes -to strive for continual improvement, measure only what matters - with a primary focus on customers of the KM system -encourage the telling of success and failure stories of the users of KM system to reinforce the lessons learned aspects of measurements

Shared HR Responsibilities

-Set functional HR-related objectives aligned to overall organization's strategic goals & objectives -Clearly communicate personnel resource requirements and specifications to HR -Learn and apply skills in interviewing job candidates -Follow policies, procedures and guidelines from HR -Learn and abide by laws and regulations governing personnel behavior as they relate to the function -Seek counsel and guidance of HR on personnel legal issues, labor relations issues, safety, security and employee welfare issues -Ensure quality responsibilities are addressed in job descriptions and evaluations/appraisals of employees' performance for all organizational levels within the function -Learn and apply a coaching style of management, including effective performance feedback, and recognition of employees for work well done -Support the continual development of function's personnel (career planning support, promotions, lateral movement to gain additional competence, training and education, and other opportunities for personal development) -Create and maintain a succession plan for key positions within the function -Ensure that all employees in the function are treated fairly and justly

Essential KM principles for any learning organization

-recognition that database is not the KM solution (people using it are) -build and reinforce an organizational culture that supports and promotes knowledge sharing, network and reusing knowledge rather than hoarding or reinventing knowledge -ensure that organizational management considers knowledge management a key strategy for growth and prosperity of the enterprise -institute a system of policies and procedures to identify what info and knowledge is essential , and specify how the info and knowledge are to be captured, processed, stored, maintained, accessed and used -nurture an open communication work climate that encourages the identification of new info and knowledge that can be exploited for individual and organizational learning & development -foster value of KM as one of the organization's core competencies in remaining competitive

Schermerhorn's tips for improving cross-functional subsystem integration

-rules & procedures: everyone understands what to do -hierarchical referral: coordination problems go to a common superior -planning: objectives and targets are known by everyone -direct contact among managers: face-to-face contact among managers -liaison roles: cross-trading of personnel to work in each other's units -task forces: people from different units are assigned to task forces -teams: people from different work units may form improvement teams -matrix organization - create matrix structure for specific projects

Risk exposure techniques and tools

1. Analyze reported incidents involving potential or actual losses 2. Data from internal sources 3. Audit financial statements and supporting documents 4. Complete and analyze process maps 5. Conduct a what-if brainstorming session 6. Perform periodic inspections and process audits 7. Use failure mode and effects analysis (FMEA) 8. Assess the robustness of management systems and processes 9. Contract out surveillance services 10. Access exposure stats from insurance carriers, trace associations, and regulatory agencies.

Art of Asking Questions (Auvine)

1. Avoid leading questions (let them draw own conclusions) 2. Phase questions in positive manner 3. Prepare questions in advance, prior to discussion

Responding to Risk Exposure

1. Find a way to avoid the exposure 2. Find ways to reduce the potential loss 3. Find ways to prevent the occasion for the loss to ever occur 4. Segregate the loss exposures to concentrate efforts on those exposures and more probable to occur and/or cause the greatest loss (for example, exposure triage - min, medium, max) 5. Transfer the risk (through insurance/other contractual arrangements)

IT Infrastructure Levels (Kendall)

1. Hardware and network infrastructure 2. Production and operational systems 3. Decision support layer - the analytical software

8 Factors that contribute to a successful knowledge management project (Davenport)

1. Link project to economic performance 2. Technical and organizational infrastructure 3. Standard flexible knowledge structure 4. Knowledge friendly culture 5. Clear purpose and language 6. Change in motivational practices 7. Multiple channels for knowledge transfer 8. Senior management support

3 Common Methods for Evaluating a Project

1. Net Present Value (NPV) - Johnson (if projected NPV is positive, for given cost of capital, project is normally approved) 2. Internal Rate of Return (IRR) (Johnson) Interest or discount rate that results in zero net present value (NPV=0). This is equivalent to stating that time weighted inflows equal the time weighted outflows. The projects with the highest IRR are approved, until the available investment capital is allocated. Most projects will have an IRR in the range of 5 to 25% per year. Managers will normally approve projects where IRR is higher than the company's overall ROI, assuming capital is available. 3. Payback method - Payback period is length of tie necessary for net cash benefits or inflows to equal the net cost or outflows. It usually generally ignores the time value of money. Main advantage is the simple calculation. It is also useful for comparing projects on the basis of quick return on investment. A disadvantage is that cash benefits and costs beyond the payback period are not included in the calculations. Due to market uncertainty, approvals are usually in the 1 - 2 year payback are approved. For projects with an initial investment and fixed annual cash inflow, payback period is calculated from Johnson & Melicher formula. Payback period= initial (and Incremental) investment/annual (or monthly) cash inflow These equations ignore effect of taxes. Project risk/likelihood of success can be incorporated into various benefit-costs analyses as well, As risks are identified they are assigned a probability of occurrence and consequence of risk. Project Risk Factor=sum (probability of occurrence x consequence of risk) Projects with lower risk factors are chosen.

PDCA Risk Management Process

1. Plan - organization will a) identify and define its potential exposures to loss, b) quantify the potential financial and nonfinancial risks, c) examine the feasibility of alternative risk management techniques, d) select the best risk management technique(s) 2. Do - Implement a test of the chosen risk management technique(s) 3. Check - Assess the effectiveness of the technique and make necessary adjustments or select a new alternative 4. Act - Implement the full process a) roll out the full implementation

Computing Potential for Loss & Taking Action

1. Prioritize the identified risks. Pareto Chart is helpful. 2. For each of the top 8 to 10 risks, envision a worst-case scenarios. List all consequences that could happen. Brainstorming, mind mapping, and cause-and-effect diagrams are effective techniques and tools. 3. Categorize the consequences into clusters of similar happenings. Affinity diagram is useful. 4. Assign dollar estimates of losses to each cluster. Line items that might be considered assigning a value for include - legal defense costs, claim settlements-claim settlements for loss of human life - temporary loss or business closing-product recall costs - erosion of confidence in your organization and/or its products - increase in insurance premiums-increase in surveillance costs, -replacement costs: people, facilities, tools, and so on-product obsolescence, - shortages of raw material, energy sources, transportation, staffing and so on-deterioration of spoilage of raw materials, work in progress or completed product 5. Determine cost to mitigate/eliminate accumulated potential dollar loss for each cluster/scenario. Factors include - insurance or other ways of spreading potential loss, - improved environmental scanning & forecasting methodology, - improved response and preparatory procedures (contingency plans), - decentralization of risk-associated functions & facilities, - relocation of facilities to less risky geographic area, - discontinuing production of product with high potential risk, - lean techniques to reduce or eliminate inventory, -outsourcing part or all of a process 6. Compute risk ratio for each cluster (cost of additional resources relative to total value) 7. Decide what action(s) would be in the balanced best interest of all the organization's stakeholders. 8. Decide how and when to take action or not. 9. Periodically reassess the decisions made and make necessary adjustments

Juran Trilogy

1. Quality Planning In the planning stage, it is critical to define who your customers are and find out their needs (the "voice of the customer"). After you know what your customers need, you're able to define the requirements for your product/process/service/system, etc., and develop it. Additionally, any plans that might need to be transferred to operators or other key stakeholders should be done during the planning phase. Planning activities should be done with a multidisciplinary team, with all key stakeholders represented. 2. Quality Control During the control phase, determine what you need to measure (what data do you need to know if your process is working?), and set a goal for your performance. Get feedback by measuring actual performance, and act on the gap between your performance and your goal. In Statistical Process Control (SPC), there are several tools that could be used in the "control" phase of the Juran Trilogy: Pareto Analysis, flow diagrams, fishbone diagram, and control charts, to name a few. 3. Quality Improvement There are four different "strategies" to improvement that could be applied during this phase: Repair: Reactive; fix what's broken. Refinement: Proactive; continually improve a process that isn't broken (like the continual pursuit of perfection in Lean!) Renovation: Improvement through innovation or technological advancement Reinvention: Most demanding approach; start over with a clean slate.

loss exposure identification

1. What is exposed to potential loss? Items to consider includes - property (real estate, facilities, equipment, product, material, intellectual property), - net income (short and long-term), - liability (short and long-term), - people (employees, customers, suppliers, community members, investors, others) 2. What situation, event, or peril could cause a loss for each exposure? 3. What are the financial and other business consequences of such a loss? 4. What entity(ies) may potentially suffer the loss?

Quinn's 5 Levels of Firm's Knowledge

1.Cognitive knowledge (know what) - rules and procedures of a task 2.Advanced skills (know how) - the capacity to perform effectively 3.System understanding (know why) - understanding the system's big picture 4.Motivating creativity (care why) - combining disciplines to create a new concept 5.Synthesis and trained intuition (perceive how and why): the highest level of knowledge, to work successfully with concepts that deal with uncertainty.

3 basic functions of IT Department

1.Gather data from organization through a variety of systems 2.Deposit data into "data warehouse" where data is accessible and linked properly. Doesn't have to be a giant system, but ability to gather and link the database is essential. 3.Use software applications to analyze, report, or make decisions.

3 Reasons Quality Manager may not receive accurate/complete information

1.Vertical communication, subordinates may withhold info that may discredit them (data is filtered so only positive data gets reported). In horizontal communication, information may also be slanted or incomplete. 2.Tendency to tell Manager what they want to hear (particularly the authoritarian type) - what they want to hear (shielding the negative). This results in concealed errors and avoidable delays and costs. 3.An incumbent manager is not always surrounded by allies (may be competition/rivalry for higher positions). Manager may be placed in position of devoting too much time to defensive tactics.

Measurements of Project Success or Failure

1.Were the specified goals and objectives achieved? 2.Was it achieved within the time deadlines? 3.Was the project at or below cost containment? Feedback is important. It is also not cut and dried. It is possible for project success even if it is late, over budget and did not meet stated objectives. Example, project accomplishes new feats not originally included in the plan.

Entry level hiring vs. experienced hiring practices

Advantages of Entry Level hiring •Low initial wages makes it easier to meet budgets •Allows performance process to weed out poor performers •Employees learn the company from the bottom up •A career path is available for promotions through more levels •New hires can be indoctrinated into the company culture Advantages of experience level hiring •New perspectives and ideas are brought to the company •Learning curve is shorter for the position •Skills may not have previously existed in the company •More efficient methods may be implemented •Old ways of doing things are questioned and possibly improved

Computer based/Automated Project Management

Advantages: •Able to model the what-if scenarios and show impact of alternative options •Ease of presenting information in a variety of formats (GAMTT, PERT) •Project information can be displayed at different levels of detail •Automatic calculation of critical path, resource usage, slack time •When project is in process, actual data replaces planned data, so effects of delays, early completions, and budget costs, are known quickly. •Project status reports for management or customers are easier to generate •People at different locations can input data, and share the same information •Project level roll-ups can be easily summarized for time and budget data •Some data collection activities can be automated Disadvantages: •A learning curve for the user for the software program •Higher costs (although these may be low compared to overall project costs) •Data entry and updating can be a time-consuming task •The computer will accept inaccurate data leading to incorrect decisions •The software may not include options needed for the specific project •The manager may focus on the computer and lose touch with the project •Environmental conditions and/or locations may be unsuitable for computer use •Unusual events or task interrelationships may not fit into the software model.

Manual Project Management Methods

Advantages: •Ease of use •Low cost •Best for monitoring schedules and timing of events •Hands on feel for status of project is generated •PM is more likely to recognize project lapses •Can be customized to specific project needs •Training requirements are minimal Disadvantages: •May not be transportable, depending on format used •Project status information is only available at one site •Large or complex projects may be difficult to display •Potential problem activities may be overlooked •Costs might not be tracked •Resource conflicts may not be apparent •Requires manual summarizing if interim status reports are needed •If status board is erased the data may be permanently lost •If information is incorrectly posted, it may not be noticed until it is too late

Big 5 Factor Personality Model (Moorhead & Robbins)

Agreeable (ability to get along with others) - high levels indicate an ability to develop better working relationships with people. Conscientiousness (focus on goals, dependability and reliability) - fewer goals are better, as this allows people to focus and organized their work, enabling higher performance Negative emotionality (emotional stability of person under stress) - calm and poised people can handle job stress and pressure. They are considered to have less negative emotionality. Extraversion (relationship with people) - a sociable person, delivering better job performance. Openness (capacity to change and use new ideas) - higher levels of openness indicate a willingness to adapt to new ideas, leading to better performance.

Horizontal Communication

Sharing of information across the same "level" of the organization.

Quality Specialist

As their primary assignment, performs a specific quality-related function within the company's quality program (for example, quality training, auditing, or reliability testing). Has either received defined function of the organization. Has direct repots that implement some aspects of the policies, procedures, and processes of the quality program.

Risk Technique: Data from Internal Sources

Conduct diagonal-slice brainstorming sessions with employees from all functions and organizational levels, and use surveys to identify areas of potential risk.

Financial Definitions

Assets= Liabilities + Owner's Equity Current assets - assets that will return cash to the firm within 12 months (typical) Intangibles - assets with value such as goodwill, patents, licenses, and other intellectual property. Short-term notes - loans or other liabilities that must be paid off within a year Owner's equity - this is the remainder after assets minus liabilities. The Owners can invest more capital into the business and can also keep profits in the business as retained earnings. Liquidity - current ratio, acid-test (or quick) ratio Working capital utilization - accounts receivable collection period, inventory turnover, accounts payable payment period, working capital turnover Capital structure - total debt to owner's equity, total debt to total assets, long-term debt to total capitalization, times interest earned Profitability - percentage relationships on income statement, return on sales (ROS), return on equity (ROE), return on assets (ROA) Cash adequacy - cash flow from operations to net income, dividends to net cash flow before financing, cash flow from operations to cash flow for investments, cash flow from operations to owner's equity

Contingency Approach

Based on the theory that management effectiveness is contingent, or dependent, upon the interplay between the application of management behaviors and specific situations. In other words, the way you manage should change depending on the circumstances. One size does not fit all/ no one right way to manage.

Quality Auditor

Conducts system, process, product and/or supplier audits of conformance to the organization's quality standards, customers' standards, and/or standards of a third party.

Performance Evaluation Process

Benefits: Identifies employee needs, builds communication, provides an opportunity to praise, promotes participation by the employee in setting new goals/objectives, provides direction for the future, serves as a control mechanism ot redirect behavior, increases ownership by the employee in future activities. Disadvantages: Manager may lack information on the employee's total performance, interpretation of performance may vary between employee and supervisor, manager may be biased, and may add subjective factors, employee may not be totally aware of expectations, focus of evaluation may be on weaknesses rather than strengths, next level manager may have different views than the first level manager, employee may have an unrealistic self-assessment, employees with multiple supervisors may have conflicting objectives or tasks, reviews should be conducted to provide feedback for improvement, reviews should be done with an investment of time and motivation, manager criticism can have a negative effect on employee growth, reviews are usually linked to pay increases making the employee defensive, reviews are frequently done late.

Managerial Grid

Blake and Mouton, two-axis grid. X axis = amount of focus, Y axis = measure of concern. The model identified five leadership styles by their relative positions on the grid: Impoverished (concern for production = 1; concern for people = 1) Produce or Perish (9, 1) Middle of the Road (5, 5) - mediocracy Country Club (1, 9) - The Manager sees to the team's needs first and foremost over everything else. The assumption by the leader is that happiness within the team will naturally lead to improved productivity; however, there is no guarantee that productivity will not falter. Team (9, 9) Best - The leader shows a commitment to staff empowerment as well as toward increasing productivity. By encouraging the workers to operate as a team, the belief is they will be motivated to accomplish more.

Concurrent Activities in Project

Break-down of a project into manageable parts, and concurrent planning, design, construction and installation of these parts, reduces project completion time tremendously. This is not a new concept, may also be called Gantt charting, timeline charting and parallel engineering.

Activity Network Diagrams

Can be used as a project planning and estimation tool

bookkeeping methods

Cash basis - simple (income is considered earned only when the payment is actually received). Expenses are booked only when actually paid for. Used by small organizations but the revenues and expenses can mislead the decision maker because of the time gap between an action taken and when money is disbursed or collected. Accrual basis - income is considered earned when goods or services have been sold or performed (even if payment has not yet been receive). This allows measurement of results of operations by allocating to each period the income associated with operations of the period and all expenses and losses associated with the income of the period. It more accurately relates costs with income. Most companies use this method.

Financial Definitions

Cash budget - forecasts financial requirements so funds are available at required times. Items such as materials have short periods between receipt and invoice due dates, while revenues usually comes later in the project. Budget Approved written plan of the total costs and cash inflows, expressed in dollar amounts, for the project. The plan includes timing of revenue and costs, and a benefit-cost analysis. Forecast Predicted total revenues and costs, adjusting budget to include actual information at that point in the completion of the project. Actual Revenues and costs that have occurred, and for which the amounts are known instead of eliminated Variance Difference between budget and actual revenues and costs. A positive variance usually denotes a favorable deviation and a negative variance usually denotes an unfavorable deviation.

Organization as a "System"

Caveats: -Be clear and objective as to what is to be changed/improved. -Be specific to what the desired outcomes from a change are. -Be prepared to be flexible and adaptable as to the receptivity of feedback received. -Accept that systems changes need effort and alignment from outside in, not from inside out - Whole system is more important than its part (relationships and processes are paramount) -Every system is linked to other larger/smaller systems in a hierarchy of systems. -Quest for achieving steady-state balance, although desired, can be perilous in the rapidly changing world. -Entropy must be reversed or the system will perish -Multiple ways to achieve same preferred outcomes -Employees support what they are participate in creating -Root causes and their effects typically do not occur within same time frame and space. -Systems consisting of many levels are too complex to fully comprehend and manage from a central control point -Solving problems at the level at which they were created is often not possible nor feasible.

Situational Leadership

Chapter 2 Hersey and Blanchard (high task-high relationship thru low task - low relationship) Directive - telling and directing what to do Selling - coaching the employee, yet still directing their actions Participating - employee is skilled in his work, but still needs guidance Delegating - employee is now skilled and able to do the work

Quality Coordinator

Collects, organizes, monitors, and distributes any information related to the functions of the quality department. Might also communicate information on the latest standards, procedures or requirements related to the company's products or services. Typically generates reports using computer skills and distributes these reports to various users in the organization, customers, or suppliers.

Benefit Cost Analysis (BCA)

Comparison to determine if a project will be worthwhile. It is performed prior to implementation and predicted value of benefits. If the analysis isn't favorable, but management still wants to implement, they can look at what they can change. Sequence is: •Identify the project benefits •Express the benefits in dollar amounts, timing and duration •Identify the project cost factors including materials, labor, resources •Estimate the cost factors in terms of dollar amounts and expenditure period •Calculate the net project gain (loss) •Decide if the project should be implemented (prior to start) •Decide if the project was beneficial (after completion)

Knowledge Capturing/Sharing/Accessing of data

Consider -identifying the types of data to be captured and the media on/in which it is receive -preparing the procedures for capturing the data and how it will be organized/categorized (e.g., scanning/categorizing) -determine how data may be used to create info (influences accessibility and design of storage medium), and whether data will be retained or upgrades as information (summarized) -for security purposes, identifying the customers who will use the data and protocols for access - designing methods for searching & accessing the data -establishing the policies and rules governing data use, maintenance of data (storage, handling, preservation, updating, and so on), retention duration, and disposal -determining the protocols for sharing (whether data must be requesting - reactive mode) or will be disseminated to select individuals/departments based on an on-file profile of interests or needs (proactive) -establishing methods for continually evaluating the effectiveness of the knowledge management system and the means for improving it

Risk Technique: Contract out surveillance services

Consider outsourcing examination of organization's exposure to property/personnel security risks and risks inherent in noncompliance to regulatory/on-regulatory requirements

Project Review

Considers all important factors in creation of a mature product design. Some of the fundamental review topics include: a)Adequacy of personnel, time, equipment and money b)The effectiveness of the entire project, as determined by information from internal quality audits, external and internal process customer feedback, process data and product or service input. c)How well the project was tracked d)How well top management and project sponsor were informed of project status e)How well project team performed together f)How well project team was recognized for their efforts g)Effectiveness and reliability of corrective actions h)True quality level of the delivered product and/or service Results of project review will be retained with other project documentation and archived for future reference. Archiving includes development test data, traceability of materials, key process variables, and reports generated during the project. Documents must be complete and organized. Storage requirements include protection from damage, including fire, water and other deterioration, security of access, retrievable within a reasonable period (e.g., 3 days), adequate markings and location so records can be easily found.

Director of Quality

Coordinates all aspects of the organization's quality program, such as developing and administering the program, training, coaching employees, and facilitating change throughout the organization. Responsible for participating in the establishment of strategic plans and policies, as well as procedures at all levels to ensure that the quality program will meet or exceed internal and external customers' needs and expectations.

Seven Habits of Highly Successful People

Covey (proactive, keep end in mind, prioritize, win-win, understand, synergy, renewal)

Knowledge

Data is meaningless until something is done to them. Data can be stored in raw form or manipulated (sorted, categorized, analyzed, calculated, summarized, and subjected to tests). When complete, data synthesized into info. Info has meaning but meaning is based on interpretation of user of the info. Value is for future use (knowledge)

Quality Trainer

Designs and conducts quality training programs and/or instructs quality modules of wider-scope training programs. Consults with the organization's training unction on the inclusion of quality content in other pertinent training programs. Designs and instructs a quality-related train-the-trainer programs for personnel who will be instructing in quality programs

Quality Engineer

Designs, installs, and evaluates quality process sampling systems, procedures, and statistical techniques. Designs or specifies inspection and testing mechanisms and equipment, analyzes production and service limitations and standards, and recommends revisions of specifications, when indicated. Formulates or helps formulate quality concepts and tools, and interfaces with all other engineering components within the company and with customers and suppliers on quality-related issues.

Documents Management (Deveau)

Deveau - document management is sometimes confused with knowledge management. Both deal with mapping processes and exploiting the knowledge databases. Distinctions: Document management is the intellectual property the firm desires to manage. Knowledge management is not as structured and goes beyond a document.

Management Tools - Personality Assessments

DiSC Myers-Briggs A-B-C Analysis (Ellis) - understanding the meaning of our reactions to adversity A-adversity (the situation or event) B -our beliefs - our explanation about why the situation happened C - consequence - the feelings and behaviors that our belief causes

GANTT Charts (Bar Charts)

Display activities or events as a function of time (or cost). Each activity shown as horizontal bar with ends positioned at the starting and ending dates for the activity. Advantages: •Charts are easy to understand •Each bar represents a single activity •Charts are easily changed •Charts can be constructed with minimal data •Project task progress vs. date is shown Disadvantages: •Don't show interdependencies of activities •Effects of early or late start of an activity are not shown •No means to indicate variation in expected time to complete an activity •Details of an activity are not indicated •There is little predictive value to this presentation of data Bar Charts indicate only an ambiguous description of how project, as a system, reacts to changes. Network relationship between activities, which are indicated in PERT and CPM charts, aren't shown in GANTT chart.

Risk Identification Tools & Techniques

Documentation Reviews - structured review of project plans and assumptions Information Gathering Techniques - brainstorming is a powerful technique to obtain a comprehensive list of potential risks to be addressed Interviewing Key Experts - can help identify risks Assumption Analysis - exploration of validity of neutralizing risk of unverified assumptions Brainstorming is most prevalent for risk identification. The output of the risk identification process is a raw list of risks and associated symptoms or warning signs that require further investigation.

Duffy's knowledge management structure layers

Duffy acknowledges that knowledge management solutions should be unique for each firm. Data layer - a link across different media (databases, text data, video, audio) Process layer - logical link of data to people usage User interfaces - access for people to the information assets User interface (UI) - anything requiring longer than an hour of exposure is too complicated.

Quality Manager

Ensures the administration of the organization's quality program within a defined segment of the organization.

VP of Quality

Establishes the direction for the development and administration of the organization's quality initiatives. Consults with peers on the attitudes toward and practices of quality throughout the organization to develop an environment of continual improvement in every aspect of the organization's products and services. Acts as a champion for quality.

Organizational Competition & Internal Structure

If a newly formed organization is entering a mature market with established large competitors, a market niche is available to the organization if it can a) be more responsive to customer needs, b) respond faster to market changes, and/or c) offer products at lower prices due to lower overhead costs. The mew organization will adopt a matrix or team structure with everyone clearly focused on the objectives.

Data Information Knowledge Development Cycle (Raisinghani on Drucker)

If we apply knowledge to tasks we already know how to do, we call it productivity. If we apply knowledge to tasks that are new and different we call it innovation. Only knowledge allows us to achieve these goals.

Product Development Plans

Include: -funding -project planning & management -market research -customer needs/wants analysis -engineering design for manufacturability & customer use -quality planning & management (design, processes, reliability etc.) -consumer testing -marketing product/service (promotion, selling, distribution, demand forecasting, assessing customer satisfaction, and so on) -product safety & liability

Project Management

Includes project planning and implementation to achieve the specified goals and objectives; at desired performance or technology level; within time and cost constraints; while utilizing allocated resources. Elements of project management are: a)Planning (deciding what to do) b)Scheduling (deciding when to do it) c)Controlling (assuring that desired results are obtained)

Communication effectiveness

Includes: strategies, media choices, appropriate vehicles for different situations, open-ended and closed-ended questioning techniques, listening strategies

Kotnour - Knowledge Management Definitions

Knowledge - more than one piece of information in a pattern from which explicit inferences and predictions can be made. Data and information will yield something useful, termed knowledge. Knowledge management - set of active processes that support a firm in a creating, assimilating, disseminating, and applying its knowledge Organizational learning- process of creating, assimilating, disseminating, and applying knowledge in a firm. Learning from experiences is an example of an output from knowledge creation. Organizational memory - stored information from a firm's history that can be brought to bear on present decisions. This is contained in files, records, culture, procedures, or processes. Tacit knowledge - resides in minds of people but not in database (intuition, feelings, attitudes etc.) There is a need to distribute or communicate this tacit knowledge through discussion groups or other tools.

Risk Technique: Analyze reported incidents involving potential or actual losses

Look within organization. Search records to uncover information about: -payouts for losses for the previous 2 or 3 years, including any fines and out-of-court settlements -indications and severity of bad debts and delinquent customer payments -indications of any losses due to fraudulent actions by suppliers or employees -indications of losses due to any revocation of licenses, registrations, certifications, and so o -potential loss when a patent period expires Then look at data from insurance carriers regarding types/amounts of claims paid on behalf of your organization. Check industry associations and community records for local incidents

American executives thoughts on quality's impact on the bottom line

Majority thought it impacted the bottom line. ASQ recommends making the financial case for quality and provides tools and guidelines for quality professionals to learn how to convert their requests and needs to financial performance language to achieve buy-in. When seeking executive approval for a project or capital expenditure, think and talk the language of finance (a must).

Vertical Downward Flow of Communications

Mangers relay info and directives down to employees - with the right balance (not overload, but not a lack of openness). Disadvantages: takes time, filtering process may change the message

Management Theories and Styles

Many management styles are based on theories developed 70 to 100 years ago. Most management theories take 30 yrs before they take hold. a) Scientific Management (Taylor) b) Classical Organizational Theory c) Human Relations Theory (Hawthorne studies concluded that the informal work group had influence on worker productivity. Maslow's hierarchy of needs is still applicable. This style considers the informal work group, and emphasizes employee welfare, motivation and communications) d) Behavioral Theories: Behavior Management (created by Mayo based on Hawthorne Effect) - Experiments showed an increase in worker productivity produced by the psychological stimulus of being singled out, involved and made to feel important. Hawthorne effect - "employees will respond positively to any novel change in work environment - e.g., illumination, relocation etc. Employees are more productive when they know they are being studied." e) Systematic Thinking (Clarifies duties/ responsibilities with systematic techniques and processes. Company has strict control of the worker's lives, when they were in the workplace). Looking at organization as a "whole". An example is Peter Senge's systems theory. Recent emphasis on Total Quality falls into this category. f) Complexity Theory g) Seven Habits h) Administrative - created by Fayol: (good management skills can be learned. This would imply that a good manager can be successful in one industry, and by use his management skills, could switch to another industry with equal success) structured and formalized management method. Fayol laid down the 14 principles of management: division of work, discipline, authority and responsibility, subordination of individual interest to general interest, remuneration, centralization, order, equity, initiative, spirit de corps, stability of tenure, unity of direction, scolar chain, unity of command i) Bureaucracy (created by Weber) Management and workers have a rigid structure to follow. Loss of a manager doesn't cause drastic loss to the organization, another individual could step in with minor adjustments (large corporations and governmental units use this). Decision making power are concentrated in senior management. This style tends to treat both hourly employees and management personnel as interchangeable tools. Weber made a distinction between authority and power. He believed power produces obedience through force or threat of force which induces individuals to adhere to regulations. He says there are 3 types of power in an organization - traditional power, charismatic power, bureaucratic power or legal power. Features of Bureaucracy 1. Division of labor 2. Formal hierarchical structure 3. Selection based on technical expertise 4. Management by rules 5. Written documents 6. Only legal power is important 7. Formal and impersonal relations j) Quantitative Management After WWII formal math approaches to problem solving. This included statistical theory, linear programming, queuing theory, simulation production control and quality (management by fact came was an offshoot of this) k) Contingency Theory A flexible approach to company management; there isn't one best way (driver may be situational - e.g., low cost, high growth - contingencies of company. Managers need to analyze the situation and make decisions based on these contingencies. l) Management by Walking Around (MBWA) - employees can talk to manager and ask questions they often wouldn't to their own supervisor. Manager is involved when company is small but as the company grows, manager contact with employee is much less. MBWA brings manager back into action. m) Management-by-Objectives (MBO) - emphasizes achieving specified objectives under the control of individual managers. This approach works against multi-functional process performance and often interfaces with teamwork and quality. n) Management by Results (MBR) - management by viewing past results as indication of future results (driving car forward while looking in rear view mirror). Today, managers can't rely on past predictor of future performance in today's fast-paced quick-changing business environment. o) Management-by-Exception (MBE) - management by identifying specific targets for attention and action. This approach produces short-term results by reacting to immediate problems, but there is no analysis of the process that produced the problems, so long-term benefits can be lost. p) Individual Management Style - may be one or more of the following: management by fact, empowerment, situation leadership, Hersey & Blanchard Situational leadership, learned needs, Harrington's management style, behavioral approach to management

Behavioral Theories

Maslow's hierarchy of needs Herzberg's two-factor theory (satisfiers and dissatisfiers) McGregor's Theory X versus Theory Y (negative vs positive view of human nature)

Other financial ratios

May be industry specific. Examples: -number of units accepted/number of units inspected -customer-accepted lots/lots shipped -warranty repair costs/sales -cost of quality/cost of sales -profit before income tax/number of employees -#of defectives/# of units inspected -cost to prepare drawings/# of drawings produced -#of engineering change orders/# of drawings -project overrun cost/total project cost -total operations personnel/customer service personnel -satisfied employees/total employees -IT hardware uptime/Total IT hardware operating time available -Jobs completed/jobs scheduled -Nonproductive time/total time available

Balanced Score Card Development (Frigo)

Measures performance in financial, customer, internal business process, and learning and growth. 1. Focus on strategic direction 2. Use grass-roots approach (each department develops its own measures) 3. Use a less-is-more approach (tally only vital performance measures) 4. Link performance measures to key success factors 5. Treat balanced scorecard as a valuable strategic tool 6. Search for leading indicators (use measures that will indicate results) 7. Search for cause-and-effect links (more training will lead to better satisfaction) 8. Link key performance measures to compensation 9.Use scorecard as everyday management tool 10. Continually improve the system

Risk Response Strategies

Most effective strategies is selected for each identified risk. Avoidance - change scope of project plan to eliminate the risk or condition inducing the risk (or clarification of requirements that could eliminate risky dependencies) Transference - action implies shift of consequences of risk to another party (e.g., insurance) Mitigation - reduce the probability and/or consequences of an adverse risk event to acceptable threshold. Mitigation is effective when early action is taken and when mitigation expense is low as compared with the monetary value of the risk impact. Acceptance - Conscious decision not to change project plan. Recognition by key stakeholder that it is not possible to identify suitable response strategy. Acceptance is an option implying development of contingency plan to be executed should the risk occur.

Holdbacks

Most projects between 2 supplier and customer involve holdback (typically 10% of contract amount held until project completion, to allow verification that all aspects of contract were met). Sometimes shortcomings don't become apparent until later. By withholding this, the supplier has an interest in satisfying customer. It can also be abused (contract requirements have been satisfied) or client adds items out of scope. Supplier may consent to modifications because it is low cost to implement vs. costing the relationships. If they disagree, may litigate. Internally, accounting may reserve funds (easier to hold the books than re-open). Disadvantage is the net benefit/cost of project may not be known until farther in future.

Project Budget

Must be reasonable, attainable, based on estimates of task to be accomplished. Revenue factors in budget - income from additional sales; reduced losses, such as scrap, customer returns, warranty claims. Cost factors included in budget - manpower, labor costs; materials both consumables and directly incorporated in project; equipment costs, rentals, leases; subcontracted work; fees, permits, licenses, applications; overhead allocations; consulting charges; reserve or contingency for unanticipated events. Timing of revenue and costs must be identified.

Effective implementation of Knowledge Management

Must overcome organizational hurdles: a) Lack of top management interest/support/commitment to KM (knowledge vision may be lacking, economic case for KM not developed) b) Failure to consider KM as top-level strategy (KM as competitive edge not developed, KM not perceived as integral to doing business) c) Inter-and intra-organizational barriers - organizational structures may either enable or hinder knowledge sharing - turf conflicts and tendencies to hoard knowledge are power issues - organizations not structured on a project basis may be less likely to understand and appreciate value of KM in performing their assignments, - there's conflict over funding for KM system and services. d) Overcoming process barriers (making IT the head and not on strategic use/value). What data are to be captured? Why needed? Who will use data and why? What are procedures/protocols for data capture? What are procedures/protocols for transforming data into info and knowledge? How is info/knowledge access and retrieval accomplished? Who is responsible for quality criteria, maintaining quality and accuracy, with large database, can it be optimized and costed to different segments? e) Infrastructure issues - who ensures the electronic systems are adequate to serve growing needs (expanding database, fast base of business decisions, increasingly innovative workforce and continual improvement? Who ensures those accessing KM are trained? f) Cultural concerns - does the strategy, reward and recognition, organizational structure, management style and other cultural concerns help or hinder effective KM? Have cultural concerns/language/communication protocols meshed with KM? Cultural considerations for communication factors - use of a collective approach to problems. Things like use of complex or compound sentences, use of language tools and use of inconsistent terminology relate to language communication issues. g) Individual barriers - how change resistance are employees? How reluctant to submit their knowledge to a KM (will they perceive they have lost their "power"), How much individual fear to overcome - fear of exposing errors/mistakes/giving up personal notes?

POSDC - Principles of Management

P stands for Planning, O for Organizing, S for Staffing, D for Directing and C for Coordinating. Planning is the setting of goals and objectives and the methods for achieving them. Organizing involves structuring the organization and the work to be done, obtaining and allocating resources in order to carry out the plans. Staffing includes acquiring and placing the right people for the right job as well as further developing their competencies. Directing is guiding members of the organization (see Chapter 1) to achieve the mission, plans, and objectives of the organizational work unit. Controlling involves monitoring activities and results to ensure that desired outcomes are obtained.

PERT Advantages and Disadvantages

PERT advantages: •Planning required to identify the network task information and critical path analysis can identify task inter-relationships and problem areas. •Probabillity of achieving the project deadlines can be determined, and by development of alternative plans, likelihood of meeting completion date is improved •Changes in project can be evaluated to determine their effects •Project data can be organized and presented in a decision making diagram •PERT can be usedon unique, non-repetitive projects PERT disadvantages: •Complexity of PERT increases implementation prolems. •More data is required as network inputs Each starting or ending point for a group of activities on a PERT chart is an event called a node (denoted with a circle with an event # inside). Events are connected by arrows with a number indicating time duration rquired to go.

Project Planning Techniques for Evaluating Project Timelines

PERT charts, GANTT charts and critical path method. The work breakdown structure (WBS) helps identify detailed activities for the plan and enables estimation of project costs.

Risk Management

PLAN -10 techniques and tools for identifying and analyzing loss exposures DO CHECK ACT IMPROVE

Project Monitoring Plan

PM needs status updates on progress and need to update it. Project monitoring plan should address: •Purpose of the monitoring •What is to be monitored (too much/too little info are both bad) •Assignment of responsibilities for each step in feedback loop •Timing or frequency of reporting (daily, weekly, monthly, quarterly etc.) •Method of reporting (written reports, verbal summaries, forms used) •Procedure for requesting assistance (decisions, resources, materials) •Criteria for reporting of unusual events or urgent information •Channel for feedback (to whom and how is info sent) •Action to be taken when there is a gap between requirements & performance) Barriers: •Distance between PM and other workers •Priority conflicts for management/customer time with other projects •Language variations foreign languages (business vs. technical vs. worker vocab - same words may have different meanings) •Shift time differences (1st, 2nd, 3rd shift, time zone differences •Perception distinctions (drawings, requirements, ask completion) •Expectations (reporting is accurate, but rumor indicate otherwise)

Scholtes - Communication Strategies Under Stress

People tend to revert to strategies that they used as child that are not helpful to resolve an issue: blamer (some else is to blame), placater (let's be happy), super-reasoner (Mr. Spock at work), irrelevant person (gets off subject),

Quality Technician

Performs basic quality techniques to track, analyze, and report on materials, processes, and products to ensure that they meet the organization's quality standards. Might calibrate tools and equipment.

DISC Method (Dominance, Influence, Steadiness, Conscientiousness) - Marston

Personality testing system based on how people respond to their environment. Individuals can probably fit or see themselves in major categories or patterns with some overlaps. It is used for determining basic personality and behavior in a variety of situations including sales, teams, listening, leading, diversity, work expectations, communication skills, conflict management and more situation. A common use is to fit the personality or behavioral types to the demands of the position. It has a high and low level. Dominance areas are: developer, results-oriented, inspirational, and creative patterns. Influence areas: promoter, persuader, counselor, and appraiser patterns Steadiness areas: specialist, achiever, agent and Investigator patterns Conscientious area: objective thinker, perfectionist & practitioner patterns.

Management Activities (Schermerhorn, Ricks & Kotter)

Planning - Objective setting and means to achieve them Leading - Influence and motivation of workers achieve objectives Monitoring - Determining how well objectives are being achieved Controlling - Making appropriate adjustments and/or corrective actions Organizing - Using resources such as people, tasks, or machines Staffing - Human resources part of the process

Qualitative Risk Analysis

Process of assessing impact and likelihood of identified risks. This type of analysis may use numerical and probability analysis. This should only be undertaken in exception and value. It prioritizes based to potential effect on project objectives. Assumption testing implies: a) assumption of stability and b) consequence to the project if the assumption is false The output is a list of prioritized risks on basis of probability times impact. A precision assessment includes the extent of understanding of the risk the available data, quality of data, and the reliability and integrity of the data.

Product cost

Product Costs =Direct material costs + Direct labor costs + overhead costs

scientific management (Taylor)

Said money motivated workers - differential piece system of paying workers (fair pay linked to amount produced). One best way to perform each task to increase productivity [can result in repetitive work, boredom]. Principles of Scientific Management: 1. Time and motion study - study the way jobs are performed and find new ways of doing them. 2. Teach, train and develop the workman with improved methods of doing work. Codify the new methods into rules. 3. Interest of employer and employees should be fully harmonized so as to secure mutually understanding relations between them. 4. Establish fair levels of performance and pay a premium for higher performance. Trained engineers' breakdown the task and find the "one best way" for managing the shop. It calls for use of scientific elements to determine specific work elements. The proper selection and training of workers, using the "right" methods. Workers doubled or tripled their output and increased their wages by 60%. Concepts of organization and management, the breaking down of tasks into manageable elements, with specialized staff help. Management does the thinking, workers do the muscle work. Also known as "Taylor management" or "American management model"

Systems Thinking

Senge's five disciplines, 5th is systems thinking - shifts focus to being larger part of world. Instead of focusing of individual issues, systems thinking reflects the observational process of an entire system. Managers have to understand that every action and consequence is correlated with another. Many times managers focus on individual actions, and forget about seeing the big picture. When correlation is understood, it enables us to see interrelationships and patterns of change in particular situations. Managers will be able to determine cause and effect.

Project Definition

Series of activites and tasks with specified objective, starting and ending date and resources. Resources consumed by project include time, money, people and equipment.

Milestones (Stage/Gate Processes)

Significant points in the project which are to be completed at specific points in time. Intermediate milestones serve the purpose of refocusing priorities on the longer range objectives and at same time providing status of progress. Typically occur at points where they act as a gate for a go/no go decision to continue the project. PM would be expected to do a presentation to management at each major milestone. The status of the project relative to milestone, any potential roadblocks for completion of the project, and the plan for dealing with them. Date and time for milestone and milestone activities are set very early on in the project planning phase. Once set and approved, milestones aren't subject to change or renegotiation. If project is late on timeline, this fact will reach visibility of upper management quite quickly.

Critical Path Method (CPM)

Similar to PERT except PERT is event oriented and CPM is activity oriented. CPM unique features: Emphasis on activities Time and cost factors for each activity are determined Only activities on critical path are considered Activities with lowest crash cost (per incremental time savings) are selected first As activity is crashed, it is possible for new critical path to develop. For each activity, there is a normal cost and time required for completion. To crash an activity, the duration is reduced, To crash an activity, the duration is reduced, while costs increase. Crash means to apply more resources to complete the activity in shorter time. Incremental cost per time saved to crash activity on critical path is calculated. To complete the project in a shorter period, the activity with the lowest incremental cost per time saved is crashed first. Critical path is recalculated. If additional reduction in duration is needed, the next expensive activity is crashed. Repeat until it can be completed within time requirements.

Behavior Management

Skinner's behavior modification and conditioning (+ reinforcement)

Harrington's 5 Management Styles

Some similarities to Hersey Coach - direct & show employee how to do the job (emphasis on minimizing errors and cheerleading the employee) Teacher - teach employee concepts, measure performance, reveal errors and help them succeed Boss - provide assignments, seek completion of assignments, develop and train employees for quality and productivity Leader - delegate accountability and responsibility for work to the employees. Act as coordinator of employee efforts and remove obstacles along the way. Friend - delegate work to employee, maintain personal relationships with them. Work together for problem solving, and allow freedom of decision making.

Risk Technique: Access exposure statistics from insurance carriers, trade associations & regulatory agencies

These sources often provide stats about potential exposure that are common to the organization's sector. Can point to where potential exposures based on history (as it often repeats itself)

Forte Interpersonal Communication System (Morgan)

Used as an interpersonal improvement method to drive individual and team productivity. It provides detail in the areas of individual strengths, team composition, hiring selection, sales communications, performance coaching, customer service effects. Involves 4 basic characteristics: dominance, extroversion, patience and conformance with its four reverse sites (e.g., non-dominant). These 4 basic characteristics are tested and presented as a unit for one's primary profile, an adapting profile, and in a perceiving profile. Individuals have a natural primary profile in areas of dominance, extroversion, patience, and conformance. These are then affected by an environment and they adapt. The perceiving profile is provided that represents how others view the individual's style. It is online and hardcopy results given. Testing recommended every 30 - 90 days to verify results. This will allow the person to compare and reflect on how changing environment is affecting their profile.

Financial Ratios

Used by investors/lenders to evaluate viability of organization before investing. Buyers/sellers use rations as means for establishing a faire price. Management uses ratios as a metric for assessing organizational performance and basis for determining incentive compensation amounts.

Typical quality function job titles

VP of Quality Director of Quality Quality Manager Quality Engineer Quality Specialist Quality Supervisor Quality Analyst Quality Coordinator Quality Technician Quality Inspector Quality Auditor Quality Trainer

Balance Sheet

a financial report that shows the assets, liabilities and the owner's equity Assets=Liabilities + Owner's equity Typical components of Balance Sheet a) Current assets - included are cash, short-term investments, accounts receivable (reduced by an amount for potential uncollected accounts), inventory and pre-paid expenses. These assets are convertible to cash within a year. Inventory may be valued as LAST-IN FIRST OUT (LIFO) or FIRST-IN FIRST OUT (FIFO). LIFO would be used for materials stored loosely in piles (e.g., gravel). FIFO reflects the way inventory is typically used. b) Property, plant and equipment - valued at book value (cost of acquisition) less applicable accumulated depreciation for the life of the asset c) Goodwill and other intangible assets - represents the variance resulting from one company buying another for more money than the acquired company's net worth. Goodwill is usually amortized (decreased, written off) over some time period. Total assets is one key determinant of an organization's size. Another is sales (reported in the income statement). d) Current liabilities - this figure represents liabilities that must be paid within a year. Included are accounts payable, dividends payable, accrued wages, and taxes. Current assets minus current liabilities= working capital (funds for current operating purposes). e) Deferred income taxes and long-term debt. These figures comprise amortization of an investment tax credits over the life of the asset and debts that will be payable after 12 months mortgages beyond the next year, long-term promissory notes and bonds. f) Owner's equity - this amount consists of what the owners (stockholders) have invested plus any profits returned to the organization in lieu of paying dividends. Owner's/stakeholders' equity may be called net worth or book value Therefore what the business owns (assets) equal the amounts owed creditors plus the claim (equity) owners have on the business.

3 types of basic financial reporting statements

a) Balance Sheet b) Profit & Loss (P&L) c) Statement of Cash Flow Required under the GAAP (Generally Accepted Accounting Principles) guidelines. SEC requirements

Selling quality initiatives to management

a) Calculating risks and benefits involved b) Collecting and analyzing all pertinent data derived from financial analysis, competitive analysis, benchmarking and so on c) Crafting a salable picture of benefits to the organization and to the executives who must approve the initiative. d) Do the homework before presenting the final proposal (solicit critique and advice from key people in the organization who have/will have a stake in the outcome of the proposed quality initiative, present a draft of the proposal to people who furnish advice, with evidence that the proposal reflects their suggestions, win support from as many members of top management, as feasible) e) Present the proposal for approval, with the support of the people who participated in its preview

Juran's 5 steps (changing to a quality culture)

a) Create and maintain an awareness of quality. b) Provide evidence of management leadership on quality. c) Provide for self-development and empowerment. d) Provide participation as a means of inspiring action. e) Provide recognition and rewards.

Cash flow statement benefits

a) It records the actual cash generated at a given point in time b) It offers more detail than the balance sheet c) It indicates the quality of organization's earnings, the cash backing up the earnings, and the organization's capability to pay interest and dividends. The organization's cash flow statement should not be confused with cash flow reports for periods

Learning Theories

a) Kolb's experiential learning model (reflection cycle) - concrete experience (doing stage) then reflective observation (thinking stage) then abstract conceptualization (concluding stage) then active experimentation (adapting stage) b) Gardner's multiple types of intelligence

Internal silos foster dysfunctional attitudes & behaviors

a) Optimizing the operation of the subunit to the detriment of overall organization (sub optimization) b) having a "that's not my job" attitude - throw it over the wall for next unit to worry about c) Hiding mistakes (don't tell, it could make us look bad) d) Competing - attempts to get all the resources we can get, regardless of other units' needs e) Protecting the boss's reputation at all costs, so he/she will protect us Being wary of units who provide products/services to us, and the units to which we provide product/services f) Ignoring the external customer - unless we are in sales or customer service (we have nothing to do with them) g) Making sure we spend all the budget money allocated to us (if we don't we won't get it next yr) h) Resisting efforts to enlist our unit's people in cross-functional teams

4 categories of financial ratios

a) Ratios that view and organization's liquidity and overall condition - derived from balance sheet (1. current ratio - should be 2.0 or greater to indicate liquidity isn't an issue, 2. Acid test or quick ratio - should be greater than 1.0 to show organization can meet current obligations. Uses only the most liquid assets, cash, short-term papers, accounts receivables, as compared to the current liabilities, inventory is not very liquid. 3. Debt/equity ratio - the larger the percentage of total capital that is reflected in existing borrows, the more difficult it is to borrow more) b) Ratios that provide insight as to the organization's operations - derived from the income sheet (1. Gross Profit Margin, 2. Cost of goods sold) c) Ratios that interrelate information form the balance sheet, the income statement and other reports (for example, source and usage of funds to show how effectively the organization is using its resources) d) Other ratios that are compiled from reports other than those above. Derived from internal operating reports. Help analyze workforce utilization, cycle time and industry-specific comparisons. Interstatement Ratios - inventory turnover represents the rate at which the organization sells its inventory. The higher the number of inventory turns, the lower amount of cash required on hands. This means less borrowing for working capital and more available to invest to earn income. Fast inventory turnover means less of a problem with nonsalable product. The sooner an organization collects receivables due, the lower the amount invested in accounts receivable and the lesser chance of bad depts. To support additional sales, total accounts receivable outstanding and inventory tend to increase. Additional working capital is needed to increase sales. Current Ratio Ratio of current, liquid assets to current liabilities. Current Ratio= Current Assets/Current Liabilities Profits to sales Net income is divided by the sales level to provide a profitability level (Profit to Sales =Net Income/Sales) Profit to income has 2 rations - return on assets (ROA) and return on equity (ROE) ROA=Net Income/Total Assets

organization integrates 2 major systems

a) Technical system - defines how products & services are to be realized (and include the equipment, work processes and procedures, and human resources to carry out the processes b) Social system - consisting of how people communicate, interrelate and make decisions.

Organizational Quality Responsibilities

a) Traditional quality department responsibilities b) Modern total quality organizational responsibilities Traditional - quality management, QC, QA, inspection, reliability, quality engineering, auditing, procurement quality, metrology, administration

Methods of booking costs

a) Undifferentiaited costs - costs known or assumed to be associated with producing the product or rendering the service. There is no categorization by cause or type of product or service b) Costs allocated by percentage of direct labor dollars or some arbritrary factor such as amount of space occupied, by number ofpersonnel in work unit, and so on. c) Categorized costs - costs attributable to appraisal, prevention, or failure d) Costs of materials 7 services allocated by the activity or process (cost drivers) by which they are consumed Traditional cost accounting practice - involves computing the sum of all costs from work unit accounts identified as part of the direct cost of goods, then adding this sum the indirect expenses (utilities, space allocation dollars, cleaning maintenance etc.). more detailed look at the financial specifics that provide info on the cost to produce a product or service. The product is priced according to the market. It used to be: Manufacturing Cost + Profit= Selling Price Now: Selling Price - Manufacturing Cost=Profit For a manufacturing company, product cost detail will often include: Direct materials: materials used in the transformation of a product Direct labor - labor expenses used in transformation of a product Work in process materials - product goes through a series of stages to be transformed to a final product Overhead -costs associated with the transformation process that are not counted as direct materials or direct labor. Overhead includes: indirect labor, rent, lighting, water, maintenance etc. Activity based costing (ABC) - uses unique assembly of all the components of cost pertinent to each product or service. Provides a more accurate depiction of what is it really costs to produce each type of product or service. Some that use ABC have curtailed or discontinued production of some of their products once the more realistic cost to manufacture became known. Activity based management (ABM) - incorporates ABC as its data source, ABC is historical whereas ABM is more proactive - what are the causes of the cost?

Wisdom

derived from collective database of knowledge built from experience, values and expert insights. Wisdom provides capability to explore use of knowledge for informed decision making Invokes unique capabilities, such as being able to: a) Visualize the connectivity among seemingly disparate knowledge b) Know or sense the rightness or wrongness of an assumption, conclusion, or decision where objective data may not be available c) Solve problems of nonlinear nature by attribution of non-quantitative characteristics and values to the pertinent knowledge sets to enable deduction of a solution.

Risk Technique: Assess the robustness of management systems & processes

determine if there are gaps in management systems and processes that could expose the organization to loss. Some examples where you may find risk exposure: -quality management system -financial management systems (supplier payments, revenues, payroll, investments, asset management, and contingency reserves) -intellectual property management systems (especially proprietary and patent info) -supply chain alliances & partnerships -safety & security systems -environmental management systems -ship-to-stock, kanban processes -communications (website, e-mail, electronic data interchange) -material handling systems -inventory & warehousing

Return on Investment (ROI)

dollar benefit amount generated by an investment divided by the amount of the investment. This ratio is frequently used to justify the proposed project or quality initiative, or in demonstrating the financial outcome of a project or investment. ROI=Net Income/Investment Net income is the expected earnings and investment is the value of the investment in the project. Note: a) ROI and benefits to cost analysis, may produce the same ratio b) Computation doesn't consider the time value of money (money available now is worth more than the same amount in the future because of the potential earnings from using the money). c) Net dollar benefit may be difficult to identify accurately for a specific project because of other influencing factors or ongoing initiatives.

Coaching Style

effectively develop and empower employees, others reach conclusion

Return on Assets (ROA) - Johnson

measure of the return generated by the earning power of the organization's investment in assets . Calculated by dividing the net income by dollar value of tangible total assets. ROA=Net Income/Total Assets Net income for a project is the expected earnings and total assets is the value of the assets applied to the project Ratio is used when there is a substantial capital investment to be made in physical assets. Note: 1. Net income may be difficult to isolate for a particular asset 2. Payment for the asset using spans several years and impacts cash flow 3. During the time in which the asset is being paid for, the interest rates may fluctuate 4. The computation doesn't consider the time value of money (money available now is worth more than the same amount of money in the future because of the potential earnings from using the money)

Metamodel & Knowledge map

metamodel is knowledge and the map is to enable users to find answers they are looking for

Notes on Financial Statements

notes clarifying statement or entries or describing important events or transactions. Notes should always be read. Examples: -detailed costs of major capital expenditures, acquisitions, or initiatives -structural changes in the organization or operations -pending litigation -obligations for pensions -special contracts or transactions

Operating budgets

operating units break down the large budget based on their estimated operating need to meet the strategic plans. Operating budget discussed and approved. Adherence is expected. The spreadsheet is the basic tool of the manager to manager their budget. The budget for most operating units will include an itemization off all planned expenses spread over time periods in which expenditures are anticipated. Fears of managers related to operating budgets: a) Not spending all will result in less allocated last year b)Overspending the allowed budget will result in poor performance rating and future curtailment to make up for the overrun c) Concern for making budget may negatively impact customer satisfaction, employee satisfaction, and process and performance improvement initiatives d) Concerns for financial performance will overshadow the pertinent nonfinancial measures that are critical for decision making.

Knowledge Management (KM) examples

small - traditional, larger companies - more innovative -careful preservation of R&D for a new product, whether it was launched or successful. All R&D people must first access database before new product -legal firms augment the existent case law (from publishers) with case details from their own experience with clients -Retail chains formulate patterns of buyers' habits from databases of captured customer data -Archive data, documents & other physical objects that represent company's history (can be used for future planning, objective evidence in legal matters, advertising -corporate libraries to develop profiles of key users and proactively feed new info to users based on profile and document needs

Communication Thoughts

•Telephone is still most widely used communication device, except for personal face-to-face conversation. •Some individuals are more adept with verbal (vs. writing) skills and should use them •Sometimes hard copies obtained via traditional mail/fax are still required •Synchronous communication - Use teleconference/videoconference tor more personalized information exchange •Asynchronous communications - e.g., e-mail, internet - allow individuals to hold discussions and disseminate information at different times and at different locations. •During internet communications, tendency to scarify clarity and logic for speed (most transmittals should be checked for comprehension and spelling).

Plan for Analyzing Process Management

•Use a cross-functional team for analysis •Create a flow diagram of the process •List variables to be measured •Build timelines or profiles of the process •Break timelines down into phases •Determine parameters to measure each phase •Document the phases and parameters in a database •Provide a method to collect the need data

Skillful questioning by Manager - Open-Ended & Close-Ended Questions (Scholtes)

•What is the purpose of the project or job? •How do you know that you are making a difference? •What methods are you using to achieve that purpose? Additional questions to help Managers determine facts: •Why (the 5 Why's) •What is the purpose •What will it take to accomplish the project •Will someone care •What Is your theory on the subject? •What data do you have? •Where did your data come from?