Question

-What are the different Process improvement types. Differences among and examples of: Automation, Streamlining, Business Process Reengineering, with examples?
-What are the necessary Decision making & Information Systems to help with making decisions - operational, managerial and strategic - differences among level & examples?
-How is project success measured: benchmarking, KPIs, CSFs, Efficiency vs Effectiveness and explain?

Answer 1

Six Sigma, Lean, and TQM are the major process improvement methods

Examples of

Automation : Machining transfer lines in automobile industry

Streamlining : For example Tesla bundles Model X interior options with Model S thus streamlining the process

Business process reengineering : Bank of India, an Indian bank successfully implemented BPR with finacle software of Infosys, to make its business more customer centric

The differences between the above are, automation makes it possible for industries to work with minimal human intervention. Streamlining makes it possible to do more with less while BPR is used to change focus of industries to for example customer centric

Types of Information Systems

Executive Information System (EIS)- Used by Higher Management Level

Management Information System (MIS)- Used by middle Management Level

Transaction Processing System (TPS)- Used at Operational level

KPI

A key performance indicator, or KPI, is a metric that measures how well your business performs an activity that is essential for its current and future success.

KPIs are quantifiable measurements that reflect the critical success factors of a business.

• Key Drivers that have a major impact on the performance of the business

• A handful of numbers that give the owner an “at a glance”view of the business

• Keep their finger on the pulse of the business

• Identify hot spots that need attention

• Act quickly to drive the business forward

Examples of Financial KPIs

• Growth in Revenue.

• Net Profit Margin.

• Gross Profit Margin.

• Operational Cash Flow.

• Current Accounts Receivables.

• Inventory Turnover.

• EBITDA.

CSF

A CSF is a high-level goal that is imperative for a business to meet. In order to be effective, a critical success factor must:

• Be vital to the organization’s success.

• Benefit the company or department as a whole.

• Be synonymous with a high-level goal.

• Link directly to the business strategy.

examples:

• Increase Market Share Through Current Customers

• Be Service-Oriented When Working With Our Customers

• Achieve Order Fulfillment Excellence Through On-Line Process Improvement

• Align Incentives & Rewards With Employee Roles For Increased Employee

Effectiveness describes getting to an outcome – even if it takes longer. It is the art of getting things done.

Efficiency is the art of getting to that outcome faster.

Let us take an example of effectiveness versus efficiency. Let’s imagine a scenario where a sales representative from a company has to make cold calls to make sales. Suppose that each phone call costs $5 and each sale is worth $100 to the company. Sales representative A makes 25 phone calls and is able to convert 5 of them into sales for the company. This means that A spent $125 on phone calls and in return got $500 for the company. Calculating the return per dollar he spent, we can see that he made $4 for every dollar he spent. Looks effective!

Now sales representative B made just 16 phone calls and converted 4 of them. This means that he spent $80 on making calls and in return got business worth $400 for the business. Return for every dollar spent is $5!

B made fewer calls than A and also fewer number of sales but his return on the cost incurred is higher than A.

In this case, A is more effective but B is more efficient!