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011 business performance management
The document discusses business performance management for small and medium-sized enterprises. It focuses on challenges such as inefficiencies that result in lost profits. Case studies from the UK estimate average annual lost gross profits of £54,900 for one enterprise group and £215,500 for another. After implementing performance management programs, enterprises saw on average a 9% increase in productivity, 18% improvement in efficiency, and 25% increase in gross profits, among other gains. The document outlines basic principles of continuous improvement, including reducing losses and waste of resources like labor, materials, and energy.
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011 business performance management
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- 2. Focus on Smalland Medium-sized enterprises (SME) Category Number of employees Middle 50 - 250 Small 10 - 50 Micro < 10
- 3. You Globalization brings new challenges as well as export opportunities to your manufacturing enterprises THE ENTERPRISE’S EXISTINGINFRASTRUCTURE THE ENTERPRISE’S GROWTH PROSPECTS
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- 18. Challenges facing entrepreneurs: •High losses, Inefficiencies and little knowledge of actual figures!-where it is going wrong? • Major decisions demand quality preparation and evaluation in necessary detail, be compared by consequences, optimized and monitored in implementation • The potential is underutilized, developments are risky, results may be unpredictable and unexpected!
- 19. The price ofignoranceThe price of ignorance (UK case studies): Estimations of lost gross profit (GP) due to various inefficiencies, per annum Enterprise Group 1 (GP £ 400,000): 54,900 Enterprise Group 2 (GP £3,000,000): 215,500
- 20. Average enterprise improvementresults benchmarked after the Programme implementations • Overall Productivity Increase (or value Added/person) + 9% • Improved Efficiency + 18% • Improved Gross Profit + 25% • Reduction in Labour cost - 15% • Overall Effective Efficiency increase + 5% • Acceleration of business development - 6 years
- 21. Basic principles ofcontinuous improvement in business
- 22. Basic principles ofcontinuous improvement in business
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- 24. PRODUCT LABOUR ENERGY & RAW MATERIAL Capital Equipment,& Infrastructure LOSSES & WASTE RESOURCESRESOURCESENTERPRISE
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- 31. Impact Measured byPerformance Indicators
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- 41. Improvements by KBIsummary graph at a glance
Editor's Notes
- #19 Challenges they have: Performance management is missing: most cases there is no budget, systematic control of expenditures in key categories (i,e. material costs), quality, productivity, added value per person, product, overall, Important decisions are not prepared based on simulation of consequences (i.e., it is experiment on themselves and challenge for their business sustainability “to be or not to be”), there are mostly no optional solution and comparisons of outcomes, It becomes more and more dangerous to run businesses this way in our more globalised, competitive and complex world.
- #20 Let’s take another country which is well developed No one tell the truth ! There are calculated estimations based on basic data obtained in interviews!
- #42 Business benchmarking graphs allow seeing trends and note changes quickly.