A N G E L A T H O M P S O N , S E P S 3 0 2CHAPTER 6:CONTROLLING

CHAPTER OUTCOMES

• Describe the Control Process• Contrast Two Types of Corrective Action• Compare Preventive, Concurrent, & Corrective• Explain how a Supervisor can Reduce Cost• List the Characteristics of an Effective Control

System

CHAPTER OUTCOMES

• Explain Potential Negatives that Controls can Create• Explain Just-in-Time Inventory Systems• Explain Value Chain Management• Identify the Ethical Dilemmas in Employee

Monitoring• Explain Employee Theft and its Effects on

Organizations

IMPORTANT TERMS

• Basic Corrective Action

• Cause-Effect Diagram• Concurrent Control• Control by Exception• Control Chart• Control Process• Corrective Control• Flow Chart• Immediate Corrective

Action • Just-in-time Inventory

System (JIT)• Preventive Control• Range of Variation• Scatter Diagram• Supply Chain

Management• Value Chain

Management

THE CONTROL PROCESS

THE CONTROL PROCESSWhat is the Control Process?

THE CONTROL PROCESSWays to Measure Actual Performance

Personal Observation

THE CONTROL PROCESSWays to Measure Actual Performance

Statistical Reports

THE CONTROL PROCESSWays to Measure Actual Performance

Oral Reports

THE CONTROL PROCESSWays to Measure Actual Performance

Written Reports

THE CONTROL PROCESSWhat to Measure in an Actual Performance

THE CONTROL PROCESSHow do you compare results with standards?

Determining Acceptable Ranges

Goal Actual +/-

Machine A 5 4 -1

Machine B 7 3 -4

Machine C 8 9 +1

Machine D 7 7 0

27 23 -4

Which Machine has an Acceptable Range?

THE CONTROL PROCESSHow do you compare results with standards?

Special Measurement Tools: Cause and Effect Diagrams

Fishbone Diagram

THE CONTROL PROCESSHow do you compare results with standards?

Special Measurement Tools: Flow Charts

Event 1

Event 2

Event 3

Event 4

Event 5

THE CONTROL PROCESSHow do you compare results with standards?

Special Measurement Tools: Scatter Diagrams

THE CONTROL PROCESSHow do you compare results with standards?

Special Measurement Tools: Control Charts

TYPES OF CONTROLSPREVENTATIVE, CONCURRENT, & CORRECTIVE

TYPES OF CONTROLSWhat is Preventative Control?

TYPES OF CONTROLSWhat is Concurrent Control?

TYPES OF CONTROLSWhat is Correct Control?

THE FOCUS OF CONTROLWHAT TO CONTROL

THE FOCUS OF CONTROL

Direct LaborIndirect LaborRaw Materials

Support SuppliesUtility

MaintenanceWaste

What Cost to Control

THE FOCUS OF CONTROL

• Step 1: Improve Methods

• Step 2: Level the Work Flow

• Step 3: Minimize Waste

• Step 4: Install Modern Equipment

• Step 5: Invest in Employee Training

• Step 6: Make Cuts Selectively

Cost Reduction Programs

THE FOCUS OF CONTROLPaying Attention to Inventory

Just-In-Time Inventory System

THE FOCUS OF CONTROL

Value Chain Management

vs.

Supply Chain Management

THE FOCUS OF CONTROLQuality Control

YouTube Video Link

THE FOCUS OF CONTROLCharacteristics of Effective Controls

• Timeliness

• Economy

• Flexibility

• Understandability

• Reasonable Criteria

• Critical Placement

• Emphasis on the Exception

THE FOCUS OF CONTROLWhen Controls Create Problems

Employee Resistance

THE FOCUS OF CONTROLWhen Controls Create Problems

Misdirection of Effort

THE FOCUS OF CONTROLWhen Controls Create Problems

Ethics and Control Devices

CONTEMPORARY CONTROL ISSUES

CONTEMPORARY CONTROL ISSUES

Employee Theft on the Rise?

CONTEMPORARY CONTROL ISSUES

Sarbanes-Oxley Act

Link to SEC Article

KNOWLEDGE CHECK

• Go to the following URL to take a brief quiz on what you have learned today.

https://testmoz.com/292136

• The quiz is worth 50 points.

• This quiz must be completed by 11:59pm, Monday May 5, 2014

• Good Luck!