lesson 10 Quality and time 英文管理會計課件 Management Accounting

QualityandtimeLesson101Introductionoflesson10examinestherelationshipbetweencost,quality,andtime,roducesthecost-of-qualityreport,andlinksitwithbenchmarkingtooutlinetherelationshipbetweenqualityandcorporatestrategy.discussthetheoryofconstraints2Lesson10TopicsoutlineQualityasacompetitivenesstoolCostsofqualityAnalyzingandimprovingqualityCostsandbenefitsofqualityimprovementCostsofdesignqualityEvaluatingqualityperformanceTimeandcompetitivenessTimedriversandcostsoftimeTheoryofconstraints3Topic1:

QualityasacompetitivenesstoolLearningObjectiveExplainhowqualityisusedasacompetitivenesstool.RequiredreadingChapter19,pages532-5344QualityasaCompetitiveToolCompanieshavelearnedthatmarketsharecanbeerodedbypoorqualityproductsorservice.Qualityisdefinedas

thetotalfeaturesandcharacteristicsofaproductoraservicemadeorperformedaccordingtospecificationstosatisfycustomersatthetimeofpurchaseandduringuseTopic1:Qualityasacompetitivenesstool5QualityasaCompetitiveToolFocusingonthequalityofaproductwillgenerallybuildexpertiseinproducingit,lowerthecostsofmakingit,createcustomersatisfactionforcustomersusingit,andgeneratehigherfuturerevenuesforthecompanysellingitTopic1:Qualityasacompetitivenesstool6TermsassociatedwithqualityThetermqualityreferstomanyfactors,includingdegreesoffitnessforuse,levelsofcustomersatisfaction,anddegreeofmeetingdesignandengineeringspecifications.Topic1:Qualityasacompetitivenesstool7TermsassociatedwithqualityGraderelatestodifferencesindegree,worth,orrankingbetweenproductsorservicesthathavethesamefunctionaluse,forexample,thedifferencebetweenadotmatrixprinterandalaserprinter.

Qualityofdesignisthedegreetowhichacompany’sdesignspecificationsforaproductorservicemeetcustomer’sexpectationsforthegradelevelchosen.

Qualityofconformanceisthedegreetowhichtheproductmeetsitsdesignspecificationsandisfreeofdefectsthatmightaffectappearanceorperformance.Topic1:Qualityasacompetitivenesstool8QualityandFailureTopic1:QualityasacompetitivenesstoolActualPerformanceDesignSpecificationsCustomerSatisfactionConformanceQualityFailureDesignQualityFailure9Topic3:AnalyzingandimprovingqualityLearningObjectiveOutlinethethreemethodscompaniesusetoidentifyinternalqualityproblems.RequiredreadingChapter19,pages538-540,from“TheInternal-Business-ProcessPerspective:AnalyzingQualityProblemsandImprovingQuality”upto“RelevantCostsandBenefitsofEvaluatingQualityImprovement”10TheInternalBusinessProcessPerspective Whenacompanyhasqualityproblems,itmustidentifyandanalyzetheproblemsinordertoimprovetheirquality.Therearethreemethodsthatcanhelpthemidentifythesourceoftheproblems.ControlChartsParetoDiagramsCause-and-EffectDiagramsTopic3:Analyzingandimprovingquality11ControlChartsStatisticalQualityControl(SQC)isaformalmeansofdistinguishingbetweenrandomandnonrandomvariationsinanoperatingprocessControlChartsareapartofSQC.ControlChartsareagraphofaseriesofsuccessiveobservationsofaparticularstep,procedure,oroperationtakenatregularintervalsoftime.Topic3:Analyzingandimprovingquality12ControlChartsEachobservationisplottedrelativetospecifiedrangesthatrepresentthelimitswithinwhichobservationsareexpectedtofall.OnlythoseobservationsoutsidethecontrollimitsareordinarilyregardedasnonrandomandworthinvestigatingTopic3:Analyzingandimprovingquality13QualityControlChartsIllustratedTopic3:AnalyzingandimprovingqualityAccordingtothe2-sigmarule,apointthatfallsoutofthe2-sigmarangewouldoccurinanormaldistributiononly5%ofthetimeandshouldbeinvestigated.14ParetoDiagramsObservationsoutsidecontrollimitsserveasinputsforParetoDiagramParetoDiagramachartthatindicateshowfrequentlyeachtypeofdefectoccurs,orderedfromthemostfrequenttotheleastfrequentTopic3:Analyzingandimprovingquality15ParetoDiagramIllustrationTopic3:Analyzingandimprovingquality16Cause-and-EffectDiagramsProblemsidentifiedbytheParetoDiagramareanalyzedusingcause-and-effectdiagramsCause-and-EffectDiagrams

Identifiespotentialcausesofdefectsusingadiagramthatresemblesthebonestructureofafish.AlsocalledFishboneDiagrams.Topic3:Analyzingandimprovingquality17Cause-and-effectDiagramsMethodsandDesignFactorsHumanFactorsMachine-relatedFactorsMaterialsandComponentsFactorsMultiplesuppliersFlawedpartdesignIncorrectmanufacturingsequencePoormaintenancePoortrainingNewoperatorInadequatesupervisionPoorlymachinedpartsIncorrectspeedInadequateMeasurementtoolsVariationinpurchasedcomponentsIncorrectcomponentspecificationMishandlingofpurchasedpartsTopic3:Analyzingandimprovingquality18Topic2:

CostsofqualityLearningObjectiveEvaluateacost-of-qualityprogrambycalculatingcategoriesofcostandanalyzingnonfinancialmeasures.RequiredreadingChapter19,pages535-538,from“TheFinancialPerspective:CostsofQuality”upto“TheInternal-Business-ProcessPerspective:AnalyzingQualityProblemsandImprovingQuality”19CostofqualityQualitycomesatacost.Thecostsofqualityarethecoststhatexistbecausepoorqualitymayordoesexist.Improvingqualitymaybecostly,butfailingtoimprovequalitymaybeequallycostlyCostofqualityisacomprehensive,plant-orcompanywidefinancialmeasureofqualityperformance.Mostqualitycostsareassociatedwiththequality-of-conformancefactor.Topic2:CostofQuality20CostofqualityInordertomaximizethequalitywhileminimizingthecostofthatquality,itisimportantforcompaniestodeterminewhatthosequalitycostsareandtobesuretheyarespendingthemoneyintherightwayattherighttime.Topic2:CostofQuality21CostofqualityQualitycostsareassociatedwithtwosubcategoriesofquality-relatedactivities:Controlactivities__controlcostsPerformedbyanorganizationtopreventordetectpoorqualityFailureactivities__failurecostsCostsoffailingtocontrol&improvequalityPerformedbyanorganizationoritscustomersinresponsetopoorquality.Topic2:CostofQuality22Categoriesofcostofqualityof

conformanceExpendituresonqualityaregroupedintofourcategoriesandpresentedinacost-of-qualityreport.PreventionAppraisalInternalfailureExternalfailureTopic2:CostofQualitycostsincurredasaresultofproducingproductsthatdonotmeetqualitystandards

costsincurredtopreventtheproductionofsuchproducts.Control

costsFailure

costs23PreventioncostThecostsofdesigning,implementing,andmaintaininganactivequalityassuranceandcontrolsystem.ThepreventioncostincludesthecostsofDesignengineeringandprocessengineeringsupplierevaluations,preventativeequipmentmaintenanceQualitycontrolsystemQualityplanningQualitytrainingTopic2:CostofQuality24Appraisalcostcostsincurredtodetectunitsthatdonotmeetspecifications.

Thecostsofensuringthatmaterialsandproductsmeetqualityconformancestandards.TheappraisalcostincludesthecostsofInspectingrawmaterialsandpurchasedpartsin-processandfinishedproductsonlineproductmanufacturing,andprocessinspectionProducttestingTopic2:CostofQuality25InternalfailurecostCostsincurredondefectiveproductsbeforetheyareshippedtocustomers.TheinternalfailurecostincludesthecostsofScrap&SpoilageReworkMachinerepairsManufacturing/processengineeringoninternalfailuresDowntimeduetodefectsDiscountsonsalesofsubstandardpartsandmaterialsTopic2:CostofQuality26ExternalfailurecostCostsincurredondefectiveproductsaftertheyareshippedtocustomers.TheexternalfailurecostincludesthecostsofcustomersupportHandlingcustomercomplainsandclaimsrework/warranty,andreplacementRecallcostsmanufacturing/processengineeringonexternalfailures,FreightandrepairsofreturnedmerchandiseProductliabilityclaims/lawsuitscostsoflostreputationLostsalesCustomerill-willTopic2:CostofQuality27PreparingaCOQreportStep1:DeterminedirectandindirectqualitycostsStep2:CategorizequalitycostsItismostusefultopresentthesequalitycostsintermsofasalespercentagesothattheimpactofqualitycostontheprofitabilityofthecompanyislinkedandapparent.Step3:AnalyzenonfinancialinformationTopic2:CostofQuality28ActivitycostingapproachusedforqualitycostsIdentifythechosenproductforwhichthelevelofqualitycostsaresought.Identifytheproduct’sdirectcostsofqualitysuchasinspectorsandworkersinrepairareas.Selectthecostallocationbasetouseforallocatingindirectcostsofqualitytotheproduct.Identifytheindirectcostsofqualityassociatedwitheachallocationbase.Computetherateperunitofeachallocationcostbaseusedtoallocateindirectcostsofquality.Computetheindirectcostsofqualityallocatedtotheproduct.ComputethetotalcostsofqualitybyaddingalldirectandindirectcostsofqualityassignedtotheproductTopic2:CostofQuality29Activity-BasedCOQAnalysisIllustrationTopic2:CostofQualityExhibit19-230InterpretaqualitycostreportThecostsareusuallycomparedtoabudgetortothecostsforthepreviousperiod.Oncecostsofqualityarecategorized,companiesoftenfindthatspendingalittlemoreonpreventionandappraisalresultsinsignificantsavingsinfailurecosts.Topic2:CostofQuality31QualityCostGraphCosts100%%ofoutputwithoutdefectsCostsofcontrolCostsoffailureTotalqualitycost0Topic2:CostofQuality32ContemporaryQualityCostGraphCost0PercentDefects100%FailureCostsControlCostsTotalQualityCostsTopic2:CostofQuality

33OpportunityCostTopic2:CostofQualityExhibit19-234Topic4:CostsandbenefitsofqualityimprovementLearningObjectiveAnalyzerelevantcostsandbenefitsofqualityimprovements.RequiredreadingChapter19,pages540-541,”RelevantCostsandBenefitsofEvaluatingQualityImprovement”35IdentifyrelevantcostsInevaluatingalternativesolutionstodealingwithqualityproblems,thecompanyshouldutilizerelevantcostanalysis.ThisisdoneinasimilarmannerascoveredinChapter11(DecisionMakingandRelevantInformation)Thekeyquestionishowtotalcostsandtotalrevenueswillchangeundereachalternativesolution.Topic4:Costsandbenefitsofqualityimprovement36CostsandbenefitsofqualityimprovementSomerelevantcostsandbenefitswhenattemptingtoincreasequalitymightinclude:EstimatedincrementalcostsofeachalternativeCostsavingsfromlessrework,customersupport,andrepairsIncreasedcontributionmarginfromhighersalesasaresultofbuildingareputationforqualityandperformance.Topic4:Costsandbenefitsofqualityimprovement37CostsandbenefitsofqualityimprovementTopic4:CostsandbenefitsofqualityimprovementDifferenceinfavorofredesigningframesExhibit19-638ComparativeanalysisManagersmakestrategicchoicesbasedontheresultsoftheanalysis;thesechoicesthenrequireafurthersensitivityanalysis.Managersmustconsiderthefollowingeffectsofnonfinancialinformationandunderlyingeconomicconditions,whichmaychangelevelsofsalesandproductioncosts.OpportunitycostsTheCOQreportTrendsofqualitycostsovertimeEthicalissuesTopic4:Costsandbenefitsofqualityimprovement39ComparativeanalysisOpportunitycoststhelostcontributionmarginonthealternativeprocess.Poorlydesignedprocesses—production,marketing,distribution,andcustomerservice—resultinlostopportunitycosts.TheCOQreportDeterminestheimpactofinterdependenciesacrossthefourcategoriesofquality-relatedcostsTopic4:Costsandbenefitsofqualityimprovement40EthicalissuesChanginganinternalprocessmaydecreasedefectsbutincreasetheuseofanon-renewableresource.Otherissuesinthisareamightbethesafetyofemployeesinthemanufacturingprocessandthesafetyofcustomersintheuseoftheproduct.Topic4:Costsandbenefitsofqualityimprovement41Topic6:

Evaluatingquality

performanceLearningObjectiveEvaluatequalityperformanceusingfinancialandnonfinancialmeasures.RequiredreadingChapter19,pages542-543,“EvaluatingQualityPerformance”42TrendAnalysisQualityCostsActualSales%ofSales2000$440,000$2,200,00020.0%2003392,0002,800,00014.0Thetrendsareevaluatedtodeterminewhetherprogressisbeingmade.Assumethefollowingdata:Topic6:Evaluatingqualityperformance43Multiple-PeriodTrendGraph:

TotalQualityCosts5101520012345%ofSalesYearTopic6:Evaluatingqualityperformance44Multiple-TrendAnalysisforIndividualQualityCosts

InternalExternalPreventionAppraisalFailureFailureTotal20002.0%1 2.0% 6.0% 10.0 %20%2001 3.0 2.4 4.0 8.61820023.0 3.0 3.0 6.01520034.0 3.0 2,5 4.5142004 4.1 2.4 2.0 1.510Assumethefollowingqualitycostdata:1Expressedasa%ofsalesRedesigningtheproductionprocesscanincreasepreventioncostsbutcauseareductionininternalandexternalfailurecosts.Topic6:Evaluatingqualityperformance45Multiple-PeriodTrendGraphic:IndividualQualityCostCategoriesPercentageofSales10987654321001234YearExternalfailureInternalfailurePreventionAppraisalManyalternativeswillhavemulti-periodeffects.Topic6:Evaluatingqualityperformance46Advantagesofcostofqualitymeasures

Theyareconsistentwiththeattention-directingroleofmanagementaccountingbyfocusingattentiononthecostsofpoorquality.TotalCOQprovidesameasureofqualityperformanceforevaluatingtrade-offsamongpreventioncosts,appraisalcosts,internalfailurecosts,andexternalfailurecosts.COQmeasuresassistinproblemsolvingbycomparingcostsandbenefitsofdifferentquality-improvementprogramsandsettingprioritiesforcostreductions.Topic6:Evaluatingqualityperformance47LimitationsofQualityCostInformationSimplymeasuringqualitycostproblemsdoesnotsolvequalityproblems.Resultsusuallylagbehindqualityimprovementprograms.Themostimportantqualitycost,lostsales,isoftenomittedfromqualitycostreports.Topic2:CostofQuality48CostofQualityExclusionsOpportunityCostsasaresultfrompoorquality:ContributionMarginandIncomeforegonefromlostsalesLostProductionLowerPricesExcludedduetoestimationdifficultiesandbeingunrecordedastothefinancialaccountingrecordsTopic2:CostofQuality49NonfinancialmeasureofqualityThefinancialcostsrepresentonlyaportionofthetotalcostofquality.Prevention,appraisal,andinternalfailurecostsalsohavenonfinancialmeasures,includingthedefectrates,reworkpercentages,andnumberofdesignchanges.Nonfinancialmeasuresofqualityareatleastasimportantasthecostsofquality(COQ)measures.Topic6:Evaluatingqualityperformance50NonfinancialmeasureofqualityNonfinancialMeasuresofCustomerSatisfactioninclude:CustomerPerspectiveInternalPerspectiveLearning&GrowthPerspectiveTopic6:Evaluatingqualityperformance51NonfinancialmeasureofqualityCustomerPerspectiveSurveysonsatisfactionMarketshareNumberofdefectiveunitsshippedtocustomersNumberofcustomercomplaintsProductfailratesDeliverydelays/On-timedeliveriesTopic6:Evaluatingqualityperformance52Nonfinancialmeasuresofquality

InternalbusinessPerspectivePercentageofdefectiveproductsAveragetimetorepairtheproductsatcustomersitesPercentageofreworkedproductsNumberofdifferenttypesofdefectsanalyzedNumberofdesignandprocesschangesmadetoimprovedesignqualityorreducecostsofqualityTopic6:Evaluatingqualityperformance53Nonfinancialmeasuresofquality

TheLearning&GrowthPerspective

EmployeeturnoverratioEmployeeempowerment–numberofprocessesinwhichemployeeshavetherighttomakedecisionswithoutconsultingsupervisorsEmployeeSatisfactionEmployeeTrainingTopic6:Evaluatingqualityperformance54Advantagesofnonfinancialcostofqualitymeasures

Theyarefrequentlyeasytoquantifyandunderstand.Theydirectattentiontophysicalprocessesandhelpmanagersidentifythepreciseproblemareasthatneedimprovement.Measures,suchasnumberofdefects,provideimmediateshort-runfeedbackonthesuccessofquality-improvementefforts.Measures,suchascustomersatisfaction,canbeindicatorsoflong-runfutureperformance.Topic6:Evaluatingqualityperformance55AnalyzenonfinancialinformationTopic6:Evaluatingqualityperformance56Computerillustration3-1:

Cost-of-qualityreportWorkthroughthefollowingcomputerillustrationtocreateCOQreportsforamanufacturingandretailoperationandanalyzetheresults.Topic6:Evaluatingqualityperformance57Topic5:CostsofdesignqualityLearningObjectiveExplainhowmanagersuseinformationaboutcostsofdesignquality.RequiredreadingChapter19,page542“TheLearning-and-GrowthPerspectiveforQualityImprovements”58DesignqualityDesignqualityreferstohowcloselythecharacteristicsofaproductorservicemeettheneedsandwantsofcustomers.Designquality,then,involvesgivingcustomerswhattheydesireinaproductorservice.Topic5:Costsofdesignquality59DesignqualityBecauseofthedifficultyinassigningcoststotheseareas,mostcompaniesdon’tmeasurethefinancialcostsofdesignquality.Thesecostsarereflectedtosomeextentinnonfinancialmeasures(thatis,mostlyintheinternal-businessprocessarea).Topic5:Costsofdesignquality60Topic7:TimeandcompetitivenessLearningObjectiveExplaintheimpactoftimeonqualityandcompetitiveness.RequiredreadingChapter19,pages543-544,from“PartTwo:TimeasACompetitiveTool“upto“TimeDriversandCostsofTime”61TimeandcompetitivenessCompetitivemarketsdemandshorternew-productdevelopmentandmorerapidresponsetocustomersRespondingefficientlytocustomers’needscanmakeafirm’sreputationFailuretorespondquicklycansendcustomerstothecompetition.Topic7:Timeandcompetitiveness62TimeandcompetitivenessTimeisanincreasinglyimportantstrategicfactor.Propertimemanagementcanincreaserevenuesanddecreasecosts.Inordertomanagetime,itmustbemeasuredproperly.Twooperationalmeasuresoftimearefrequentlyutilized:customer-responsetimeandon-timeperformance.Topic7:Timeandcompetitiveness63Customer-responsetime

Customer-responsetimeishowlongittakesfromthetimeacustomerplacesanorderforaproductorservicetothetimetheproductorserviceisdeliveredtothecustomer.Topic7:Timeandcompetitiveness64Customer-responsetime

Componentsofcustomer-responsetimeinclude:Receipttimeishowlongittakesmarketingtospecifytomanufacturingtheexactrequirementsofthecustomerorder.Manufacturingcycletime(alsocalledmanufacturingleadtime)ishowlongittakesfromreceiptoftheorderbymanufacturingtothetimethefinishedgoodisproduced.Deliverytimeishowlongittakestodeliveracompletedordertoacustomer.Topic7:Timeandcompetitiveness65Customer-responsetime

Topic7:TimeandcompetitivenessCustomerplacesorderOrderissetupProductionstartedOrder

isdeliveredManufacturingcycle(lead)timeCustomer-responsetimeOrderisproducedReceipttime

DeliverytimeOrderReceivedbymanufacturingWaitingtime

Manufacturingtime

66Activity-BasedManagementtoImproveCustomerResponseTimeABMhelpsimprovecustomerresponsetimebyidentifying:Activitiesthatconsumethemostresources,bothindollarsandtimeNon-value-addedactivitiesTopic8:Timedriversandcostsoftime67On-timeperformance

On-timeperformance

referstosituationsinwhichtheproductorserviceisactuallydeliveredatthetimeitisscheduledtobedelivered.On-timeperformanceincreasecustomersatisfaction.Topic7:TimeandcompetitivenessWealwaysarriveatthescheduledtimes!68TimeandcompetitivenessKnowingcustomers’needswithrespecttotimeisimportantinknowinghowtocapitalizeontimeasacompetitivenesstool.Managingthetwomeasuresoftime(customer-responsetimeandon-timeperformance)requiresunderstandingthecausesandcostsofdelays.Topic7:Timeandcompetitiveness69Topic8:

Timedriversandcostsof

timeLearningObjectiveAnalyzerelevantrevenuesandcostsoftime.RequiredreadingChapter19,pages544-548,from“TimeDriversandCostsofTime”upto“Partthree:….”70TimedriverAtimedriverisanyfactorthatcausesachangeinthespeedofanactivitywhenthefactorchanges.Twokeytimedriversuncertaintyabouttimingofcustomerorders,andbottlenecks.Companiesoftenaddressthesefactorsthroughplantorproductdesign,andproductionschedulingTopic8:Timedriversandcostsoftime71TimedriverUncertaintyaboutwhencustomerswillorderproductsorservicesisonetimedriver.Asordersarereceivedinamorerandomfashion,queuesformanddelaysoccurEventhoughacompanymaynotknowpreciselywhencustomerswilldemandtheproduct,theycanmakepredictionsandattempttominimizethewaittime.Topic8:Timedriversandcostsoftime72TimedriverThesecondtimedriverisbottlenecksduetolimitedcapacity.Abottleneckoccurswhentheworktobeperformedapproachesorexceedscapacityavailabletodoit.ThiswillsetthestageforthediscussionontheTheoryofConstraintslaterinthischapter.Topic8:Timedriversandcostsoftime73OthertimefactorsAveragewaitingtime

istheaveragetimeanorderwillwaitinlinebeforebeingprocessed.AnimportantfactorinproductionschedulingTopic8:TimedriversandcostsoftimeAveragewaitingtime=74SimpleTimePresumptionsWhendemanduncertaintyishigh,someunusedcapacityitdesirableIncreasingthecapacityofabottleneckresourcereducesmanufacturingleadtimesanddelaysReduceset-uptimesInvestinnewequipmenttoincreasecapacityCarefulschedulingofproductionTopic8:Timedriversandcostsoftime75RelevantrevenuesandcostsoftimeInarelevantrevenueandcostanalysis,thetimefactormustbeconsideredasmanufacturingleadtimesandothertimefactorsmaybeimpactedbythedecision.Customerswilloftenpayahigherpriceforfasterdeliveryorservice,whilecarryingcosts(suchasinventory,rent,andwaste)areincreasedforslowerproductiontimes.Forthisreason,companiesswitchingtojust-in-timeoftenfindcostsavings.Whencapacityislimited,opportunitycostsbecomemoreimportant.Topic8:Timedriversandcostsoftime76TheBalancedScorecardandTime-RelatedMeasuresFinancialMeasuresRevenuelossesorpricediscountsattributabletodelaysCarryingcostsofinventoriesThroughputcontributionminusoperatingcostsCustomerMeasuresCustomer-responsetimeOn-timeperformanceTopic8:Timedriversandcostsoftime77TheBalancedScorecardandTime-RelatedMeasuresInternalBusinessProcessMeasuresAveragemanufacturingtimeforkeyproductsIdletimeatbottleneckoperationsDefectiveunitsproducedatbottleneckoperationsAveragereductioni