Internal Business Process Performance - Template.net by: Josua Tarigan, MBA, CMA, CFP, CSRS Internal Business Process Performance Slide 2 • Internal Process performance will drive

Presented by: Josua Tarigan, MBA, CMA, CFP, CSRS

Internal Business Process Performance

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• Internal Process performance will drive financial performance and customer performance

• Business performance will determine your company sustainaibility (customer) and potential profit (financial)

• This things can be managed by using ABM concept.

• Activities and Effects (potential loss or potential profit)

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InnovationOBJECTIVES MEASURES

Increase the numberof new products

Percentage revenue from new product

Increase proprietaryproducts

Percentage revenue fromproprietary products

Decrease new productdevelopment time

Time to market (from start to finish)

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OperationsOBJECTIVES MEASURES

Increase process qualityQuality costs

Percentage of defective unitsOutput yields

Increase process efficiency

Unit cost trendsOutput/input(s)

Decrease process timeCycle time and velocity

Manufacturing Cycle Efficiency

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• Examine various activities involved in producing your product or services?

• Examine the value and cost in each activities. Profit Margin can be reached only if the company create value added more than costs

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• Check efficiency and effectiveness in your company process activity

• Efficiency focuses on the denominator (output divide by input)

• Effectiveness asks a simpler question: Should I be doing this work, or activity, at all?

• Waste permanently reduces available resource, and creates profit potential

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Manufacturing Cycle Time

(MCT) ProcessingTime

MaterialHandling

Time

InspectionTime

WaitingTime

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Value AddedActivities

NON Value AddedActivities+

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• Using lean system• JIT System• Total Quality Management• Value Engineering• etc

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The circled observations are unacceptable, that is, they suggest an out-of-control process. Management may want to investigate the underlying causes of these observations and take appropriate corrective action.

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Josua TariganBusiness Accounting ProgramPetra Christian University, IndonesiaP: +62-31-2983230E: [email protected]: [email protected]