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CHAPTER THREE
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INSUFFICIENT PROCESS PERFORMANCE MEASUREMENTS
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Code-128 Generation In C#.NET
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Most businesses have measurements for sales and profitability. They do not, however, have measurements for operational effectiveness. Every company has an accounting function, whether internal or outsourced, to summarize the accounts payable and receivable, balance sheet, and profit and loss. Many organizations, although they hope to be profitable, are penny-wise and dollar-foolish. Some companies have established measurements that support the premise that they are profitable. This premise is quite possible in industries with a niche market, a lack of competition, good margins, and some waste that can be tolerated. However, that privilege is only for the lucky few. Most companies have stiff competition, complex products, and a complex system that does not identify opportunities to reduce waste. A typical business today consists of buildings, equipment, employees, material, customers, and management. The organizational structure may include one or multiple facilities at one or several locations. Besides that, a business may have several parts, products, or types of services that it offers to customers. Typically, the business is managed by making sure products are delivered to the customer in the best possible manner. The focus is on shipping the product or delivering the service as best as possible to maximize the revenue. At the end of the month, the leadership knows how much money has been made in profits or how much more credit is needed to manage the cash flow. Inside a company, life is a little more interesting. First, the sales staff are busy selling more to earn a commission than to make margins for the company. For example, a salesperson makes a deal for $500 million and earns a commission. The company finances the sales and pays out the commission. The revenue is recorded on the books, showing sales growth. A few months later, however, the customer files for bankruptcy. The company ends up in debt for $500 million, while the salesperson already earned the bonus and recognition and moved on.
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NEED FOR THE SIX SIGMA BUSINESS SCORECARD
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Meanwhile, design engineering is busy designing the part or the product. The product is designed to best-of-design capabilities, which are practically all imaginary and incorporating all the creative juices and genius of the design team in each product. Some prototypes are built and tested for functionality. The design works by hook or crook, and the product is released to production. Production may pilot-test a few runs to verify the design. When the product works, it is signed off for full production and shipment to the customer. Here is where the fun begins. Purchasing is buying parts from the suppliers. Suppliers celebrate their success in making sales to the company. Production, however, is having trouble producing a good product. Sometimes the product fails due to bad parts; sometimes it is incorrectly assembled by machine operators who are tired of fighting fires. Sometimes failure is due to marginal design specifications; at other times inspection and testing did not catch enough failures. In addition, the product fails at times in the field because the company CEO told employees to ship the product at any cost in order to keep his word to his customers (even if it meant skipping some verification steps). Now the customer returns the product. Someone receives it in the company, reviews it, and assigns credit to the customer. Someone, if any time can be found, analyzes the root cause of the problems and finds an operator who needs some counseling. Quality engineering issues a corrective action, completes the paperwork, and closes the corrective action. The customer gets a copy of the completed corrective action, accepts the response, completes paperwork, and life goes on. In addition to this life in sales-to-service operations, other business activities are ongoing. Managers make sure the product gets out the door. The support staff expedite materials and whatever else is needed to keep the operations running. They ensure bills are paid and invoices issued, that employees are paid, and that struggling employees get help when necessary. The most interesting personalities may be those of the owners, CEOs, or presidents. They are earning a good salary, and their companies have been having some profitable years due to favorable market conditions. They are stressed, though,
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Make UPC-A Supplement 5 In None
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Code-128 Drawer In None
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Identcode Drawer In None
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Drawing Code 128B In Java
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EAN / UCC - 13 Recognizer In VS .NET
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USS Code 39 Printer In Objective-C
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Recognizing Data Matrix 2d Barcode In Java
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Encode Matrix Barcode In Java
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Paint Barcode In None
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Recognizing Data Matrix 2d Barcode In VS .NET
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