Supervision

CHAPTER 6DESIGNING AND

IMPLEMENTING CONTROLS

Saigon Institute of Technology

Chapter Outcomes1. Describe the control process2. Contrast two types of corrective action3. Compare preventive, concurrent, and corrective

control4. Explain how a supervisor can reduce costs5. List the characteristics of an effective control system6. Explain potential negatives that controls can create7. Explain what is meant by the term just-in-time

inventory systems8. Describe what is meant by the term value chain

management9. Identify the ethical dilemmas in employee monitoring10. Explain what is meant by employee theft and its

effect on the organization

Controlling

Management functions Planning Organizing Leading Controlling

Control Process

Measure actual performance

Compare resultswith standards

Take correctiveaction

Performancestandards

Results

Control Process (cont)

Measure actual performance Methods

Personal observation Statistical reports Oral reports Written reports

What to measure Establish criteria based on goals

Control Process (cont)

Compare results with standards Determine acceptable range of

variation Special measurement tools

Cause-effect diagrams Flow charts Scatter diagrams Control charts

Control Process (cont)

Take corrective action Immediate

Right now Basic

Gets to root cause permanent elimination

Type of Controls

Preventive control Anticipate & prevent undesirable

outcomes

Concurrent controls Take place while activities are in progress

Corrective controls Feedback after an activity is finished to

prevent future deviations

Focus of Control

Costs Inventories Quality Safety Employee performance

Cost Control

Cost categories Direct labor costs Indirect labor costs Raw material costs Supportive supplies costs Utility costs Maintenance costs Waste costs

Cost Control (cont)

Cost reduction program Improve methods Level the work flow Minimize waste Install modern equipment Invest in employee training Make cuts selectively

Inventory Control

Why control inventory? Just-in-time (JIT): inventory items

arrive when they are needed Kanban

Value Chain Management

Value chain management Supply chain management

Quality Control

Why control quality? Needed at multiple points Comprehensive quality control:

includes preventive, concurrent, & corrective controls

Characteristics of Effective Controls

Timeliness Economy Flexibility Understandability Reasonable criteria Critical placement Emphasis on the exception

Problems Created by Controls

Employee resistance Misdirection of effort Ethics and control devices

Contemporary Control Issues

Employee theft Sarbanes-Oxley Act