Über die Autorin bzw. den Autor

ROB REIDER, CPA, MBA, PhD, is President of Reider Associates (Santa Fe, New Mexico), a management and organizational consulting firm. Prior to founding Reider Associates, he was a manager in the Management Consulting Group of Peat, Marwick, Mitchell Co. (now KPMG). He is the course author as well as seminar leader of over twenty workshops conducted nationally and is also the author of Benchmarking Strategies: A Tool for Profit Improvement and Improving the Economy, Efficiency, and Effectiveness of Not-for-Profits: Conducting Operational Reviews, both from Wiley. He can be contacted at hrreider@reiderassociates.com.

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Practical, proven tools for conducting successful operational reviews

An operational review evaluates management s conformity with plans and resource allocations, organizational structure, operating procedures, processes, and controls. In today s volatile marketplace, organizations must do everything possible to ensure their operations are running most economically and effectively to maximize desired results. In such a competitive environment, operational reviews have become increasingly important. The Operational Review Workbook not only gives readers a better understanding of the concepts behind operational reviews but also enables them to conduct reviews with more confidence and authority.

A companion to Rob Reider s Operational Review: Maximum Results at Efficient Costs, Third Edition, the Workbook explains the benefits of a review and offers step-by-step guidance through its various stages. In addition to the author s incisive analysis, this practical guide:

• Includes case studies, checklists, forms, and exercises
• Reinforces the fundamental principles necessary to perform an operational review
• Presents in a step-by-step manner how an operational review should be performed
• Shows how to judge a review s results and make recommendations to management
• Demonstrates how to use tools and techniques such as financial statement analysis, verification of data accuracy, determination of compliance with laws and regulations, development and understanding of ratio change and trend analysis, use of systems and layout flowcharts, effective interviewing techniques, and preparation and use of survey forms, questionnaires, and checklists
• Integrates operational review concepts with other analytical processes such as benchmarking strategies and activity-based costing principles

The Operational Review Workbook delivers all the tools needed to successfully conduct an operational review of the organization, department, or activity. CEOs, operations management and staff, internal and external consultants and auditors, CFOs and controllers, and other organizational stakeholders will find Reider s incomparable guide an invaluable addition to their professional libraries.

Aus dem Klappentext

Practical, proven tools for conducting successful operational reviews

An operational review evaluates management’s conformity with plans and resource allocations, organizational structure, operating procedures, processes, and controls. In today’s volatile marketplace, organizations must do everything possible to ensure their operations are running most economically and effectively to maximize desired results. In such a competitive environment, operational reviews have become increasingly important. The Operational Review Workbook not only gives readers a better understanding of the concepts behind operational reviews but also enables them to conduct reviews with more confidence and authority.

A companion to Rob Reider’s Operational Review: Maximum Results at Efficient Costs, Third Edition, the Workbook explains the benefits of a review and offers step-by-step guidance through its various stages. In addition to the author’s incisive analysis, this practical guide:

• Includes case studies, checklists, forms, and exercises
• Reinforces the fundamental principles necessary to perform an operational review
• Presents in a step-by-step manner how an operational review should be performed
• Shows how to judge a review’s results and make recommendations to management
• Demonstrates how to use tools and techniques such as financial statement analysis, verification of data accuracy, determination of compliance with laws and regulations, development and understanding of ratio change and trend analysis, use of systems and layout flowcharts, effective interviewing techniques, and preparation and use of survey forms, questionnaires, and checklists
• Integrates operational review concepts with other analytical processes such as benchmarking strategies and activity-based costing principles

The Operational Review Workbook delivers all the tools needed to successfully conduct an operational review of the organization, department, or activity. CEOs, operations management and staff, internal and external consultants and auditors, CFOs and controllers, and other organizational stakeholders will find Reider’s incomparable guide an invaluable addition to their professional libraries.

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Operational Review Workbook

John Wiley & Sons

Chapter One

The operational review process is most helpful and beneficial in the following instances:

Identifying operational areas in need of positive improvement-looking for best practices as part of a program for continuous improvements

Pinpointing the cause (not the symptom) of the problem-avoiding quick-fix, short-term solutions in favor of longer-term, elegant solutions

Quantifying the effect of the present situation on operations- identifying the cost of present practices and the benefits to be derived through implementation of best practices

Developing recommendations as to alternative courses of action to correct the situation-identifying best practices in a program of continuous improvements

This chapter will:

Introduce operational review concepts and principles.

Provide an update of the current status of operational reviews.

Familiarize the reader with commonly used operational review definitions and terms.

Identify the purposes and components of operational reviews.

Increase understanding of the benefits of operational reviews.

Introduce the phases in which a typical operational review is conducted.

Pinpoint the Cause, Not the Symptom, of the Problem to Identify the Best Practice

STAKEHOLDERS

Operational review processes are directed toward the continuous pursuit of positive improvements, excellence in all activities, and the effective use of best practices. The focal point in achieving these goals is the customer or stakeholder-both internal and external-who establishes performance expectations and is the ultimate judge of resultant quality. A company customer is defined as anyone who has a stake or interest in the ongoing operations of the organization, anyone who is affected by its results (type, quality, and timeliness). Stakeholders include all those who are dependent on the survival of the organization, such as:

Suppliers/vendors: external

Owners/shareholders: internal/external

Management/supervision: internal

Employees/subcontractors: internal/external

Customers/end users: external

Stakeholder Expectations Are the Key to Evaluating the Company's Performance

Reader: Identify the stakeholders in your organization and what you believe each one desires from the organization. List the major players in each stakeholder category (e.g., 20 percent of vendors and customers who provide approximately 80 percent of total volume). How do these various stakeholders affect the focus of the organization?

WHY BUSINESSES ARE IN EXISTENCE

Before one even thinks about performing an operational review of an organization, it is necessary to determine why the organization is in existence. When clients are asked this question, invariably the answer is to make money. Although this is partly true, there are really only two reasons for a business entity to exist:

1. The customer service business. To provide goods and services to satisfy desired customers, so that they will continue to use the business's goods and services and refer it to others. An organizational philosophy that correlates with this goal that has been found to be successful is "To provide the highest quality products and service at the least possible cost."

2. The cash conversion business. To create desired goods and services so that the investment in the business is as quickly converted to cash as possible, with the resultant cash-in exceeding the cash-out (net profits or positive return on investment). The correlating philosophy to this goal can be stated as follows: "To achieve desired business results using the most efficient methods so that the organization can optimize the use of limited resources."

This means that we are in business to stay for the long term-to serve our customers and grow and prosper. A starting point for establishing operational review measurement criteria is to decide which businesses the organization is really in (such as the two listed) so that operational efficiencies and effectiveness can be compared to such overall organizational criteria.

Being in the Customer Service and Cash Conversion Businesses Enables the Company to Make Money and to Survive

Reader: Document the practices that your organization uses with regard to the customer service and cash conversion businesses. Identify any effective best practices and practices that appear to be counter to effectiveness. Identify any performance gaps that need to be addressed in an operational review.

BUSINESSES A COMPANY IS NOT IN

Once short-term thinking is eliminated, managers realize they are not in the following businesses and decision making becomes simpler:

Sales business. Making sales that cannot be collected profitably (sales are not profits until the cash is received and all the costs of the sale are less than the amount collected) creates only numerical growth.

Customer order backlog business. Logging customer orders is a paperwork process to impress internal management and outside shareholders. Unless this backlog can be converted into a timely sale and collection, there is only a future promise, which may never materialize.

Accounts receivable business. Get the cash as quickly as possible, not the promise to pay. But remember, customers are the company's business; keeping them in business is keeping the company in business. Normally, the company has already put out its cash to vendors and/or into inventory. It may even be desirable to get out of the accounts receivable business all together. This is particularly true for small sales where the amount of the sale is less than the cost of billing and collections or where major customers (e.g., 20 percent of all customers equal 80 percent of total sales) are willing to pay at the time of shipping or receipt as part of price negotiations.

Inventory business. Inventory does not equal sales. Keep inventories to a minimum-zero if possible. Procure raw materials from vendors only as needed, produce for real customer orders based on agreed upon delivery dates, maximize work-in-process throughput, and ship directly from production when the customer needs the product. To accomplish these inventory goals, it is necessary to develop an effective organizational life stream that includes the company's vendors, employees, and customers.

Property, plant, and equipment business. Maintain at a minimum: be efficient. Idle plant/equipment causes anxiety and results in inefficient use. If it is there, it will be used. Plan for the normal (or small valleys) not for the maximum (or large peaks); network to out-source for additional capacity and in-source for times of excess capacity.

Employment business. Get by with the least number of employees as possible. Never hire an additional employee unless absolutely necessary; learn how to cross train and transfer good employees. Not only do people cost ongoing salaries and fringe benefits, but they also need to be paid attention, which results in organization building.

Management and...