Performance Measurement

It is a process for collecting and reporting information regarding the performance of an individual, group or organizations. It can involve looking at process/strategies in place, as well as whether outcomes are in line with what was intended or should have been achieved

Significance of Performance Measurement at McDonald's

Output and Efficiency Measures at McDonald's

Supply chain management, analysis, and improvement for McDonalds is becoming important for the company as the measuring of supply chain depends on the supply chain logistics management at McDonalds

Effectiveness at McDonald's

The customer relations manager at McDonalds is responsible for collecting the customer satisfaction information from the fast food, restaurant areas in order to access guest satisfaction information and take appropriate operational performance measures as well as impeding positive action for satisfaction performance.

Keys to the Successful Use of Performance Measures

Align performance measures with goals and objectives

Link the performance measurement system to important policy processes and to other management systems

Present performance measures in context

The Performance Areas Of Mcdonald's Under Consideration

Research and Development

Customer

Product (in case of McDonald's- Its service)

Marketing/Sales Employee/ Human Resource

A Simple Performance Measurement Framework

Step 1 Step 2 Step 3 Step 4

Establish key Goals

Establish Matrics
Understand Performance

Initiate Improvement

Main Areas
Effectiveness = (Actual output x 100)/ Expected output Efficiency = (Resource actually used x 100%)/Resources planned to be used

Productivity = Outputs /inputs

Expected productivity = Expected output /Resources expected to be consumed Actual productivity = Actual output/Resources actually consumed

Performance Measure Presentation

Use of performance indicators for internal management analysis and decision making requires a more complex analysis and presentation of operating and financial data than that which can be effectively presented to external audiences. Performance reports to external audiences need to be simple yet complete.

Six Basic Techniques

Time-series graph Control chart Capability index Taguchi's loss function Cost of poor quality Malcolm Baldrige National Quality Award

Mcdonald Performance Measure Presentation

Time-Series Comparison

Time-series comparison--whereby a system's performance is tracked over time and observed for improvement relative to previous periods--represents the most useful comparison both innterms of internal management appraisal, and for external reporting

McDonalds times series analysis

Control Chart

The control chart is a graph used to study how a process changes over time. Data are plotted in time order. A control chart always has a central line for the average, an upper line for the upper control limit and a lower line for the lower control limit. These lines are determined from historical data. By comparing current data to these lines, you can draw conclusions about whether the process variation is consistent (in control) or is unpredictable

McDonald's Performance Measurements Through Control Charts:

Taguchi Loss Function

The vertical lines represent the upper and lower specification limits (USL, LSL), set by the customer. The two distribution curves represent output from processes in statistical control. The wider one (dashed line) has its mean output on target, and most of its out put will be within the specification limits, meeting customer demand. The narrower (solid line) curve is also on target, but is using about half of the specified tolerance (conceptual Six Sigma).

Quality Costs

Preventing, detecting and dealing with defects cause costs that are called quality costs or costs of quality. The term quality cost refers to all of the costs that are incurred to prevent defects or that result from defects in products.

Categories of Quality Cost

Failure costs

Prevention Costs

Appraisal Costs

Internal failure costs

External Failure Costs

Total Quality Costs:

The sum of the above costs. This represents the difference between the actual cost of a product or service and what the reduced cost would be if there were no possibility of substandard service, failure of products or defects in their manufacture

The quality cost conformance model provides an example of a constrained optimization approach. In this model the economic conformance level (ECL) is obtained where prevention and appraisal costs are equal to external and internal failure costs. Prevention and appraisal costs increase as the level of conformance quality increases.

QUALITY COST FORMULA Quality Costs = Actual Cost of Providing Product or Service- Cost of Only Value Added Activities

Quality Cost Report

A quality cost report details the prevention costs, appraisal costs, and internal failure cost and external failure cost that arise from company's current level of defective products or services. Companies often construct a quality cost report that provides an estimate of the financial consequences of the company's current level of defects.

Performance evaluation in McDonalds

Optimizing Cost

Optimizing your costs is about spending wisely, judging where you cut and where you invest in terms of the impact on the business.

Five Best Practices for Reducing Burdens and Optimizing Quality

How Mcdonalds Optimizes Cost

OPTIMIZED STORING MAXIMUM RECYCLEBIN

Smart Ways to Optimize Energy Use

QUALITY IMPROVEMENT STRATEGY

Quality improvement to reduce deficiencies that create chronic waste may consist of such actions as:

Increase of the yield of factory processes Reduction of the error rates in office Reduction of field failures

Quality Improvement Goals In The Business Plan

Project Screening
Return on investment The amount of potential improvement Ease of technological solution

Urgency

Health of the product line

Probable resistance to change

PROJECT SELECTION

THE PROJECT TEAM

What MCDONALDS Do?

McDonalds is committed to providing the highest quality food and superior service, at a great value, in a clean and welcoming environment.
McDonalds is focused on energy conservation, sustainable packaging, and waste management

PROGRAM IMPLEMENTATION IN MCDOALDS

While McDonalds executives propose participation as a means of connecting the contribution of people and encouraging a sense of belonging, it remains the case that the approach need not be used in this participative manner. A further tool is the measurement of what mcDonalds calls operating quality costs.

Malcolm Baldrige National Quality Award

Application process
To apply for the award, organizations must submit details showing their achievements and improvements in seven key areas
strategic planning measurement, analysis, and knowledge management

Leadership

results.

customer and market focus

workforce focus

process management;

7 Pillars of Malcolm Baldrige. determining the success of an organization make the process of transformation towards a higher. used as maps to formulate its action plan. what would you make to your organization can be immediately set up his plan (his action plan) and what about its implementation