Process Engineering


Although continuous improvement methods are positive starts in many of our organizations, they generally focus on incremental change. Such action—a constant and permanent search to make things better—is intuitively appealing. Many organizations, however, operate in an environment of rapid and dynamic change. As the elements around them change so quickly, a continuous improvement process may keep them behind the times.

The problem with a focus on continuous improvements is that it may provide a false sense of security. It may make organizational members feel as if they are actively doing something positive, which is somewhat true. Unfortunately, ongoing incremental change may prevent a company from facing up to the possibility that what the organization may really need radical or quantum change, referred to as work process engineering. Continuous change may also make employees feel as if they are taking progressive action while, at the same time, avoiding having to implement quantum changes that will threaten certain aspects of organizational life. The incremental approach of continuous improvement, then, may be today’s version of rearranging the deck chairs on the Titanic. It is imperative in today’s business environment that all organizational members consider the challenge that work process engineering may have for their organizational processes. This is because work process engineering can lead to “major gains in cost, service, or time,” as well as an organization in preparing to meet the challenges technology changes foster.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

 

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Three Steps to the Accounting Process


Step one is to bring all the information about changes in the property owned by the business to one central location. That information is almost always on a little piece of paper. To ensure that it is included in the records it should always be on paper. Examples of the pieces of paper are invoices, bills, checks, payroll time cards, and contracts.

Step two is to put the information into a form that makes it easy to get it. It is hard to use the information when it is in a pile of paper. The little pieces of paper come in many sizes and shapes. It is not unusual to find that you have the fourth carbon copy and can hardly read it. This step is the process of taking the information from those little pieces of paper and making readable, chronological list of the things that have happened to change the property owned by the business.

Step three is to rearrange the chronological list into clusters of information that give management answers to its questions. For instance, management would like to separate out all the things that affected the equipment owned by the business. Or the CEO might like to know what things have happened that affect the cash in the bank.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Breakeven Formula


Breakeven Formula

The breakeven chart provides a picture of the relationship between sales volume and profits. However, a chart is not required for determining breakeven points. Instead, you can use a formula:

P(X) = F + V (X)

where

F = fixed costs

V = variable costs per unit

X = volume of output (in units)

P = price per unit

Rearranging this formula, the breakeven point is X = F(P – V). in other words, the breakeven point is the volume of sales where total costs just equal total revenues. If, for example, you have a product in which

F = fixed costs = $1,000.00

V = variable costs per unit = $0.75

P = price per unit = $1,00 per unit

then the breakeven point is $1,000/($1.00 – $0.75) = 4,000 units.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight