Control Charts in the Board Room


Latzko, William J.   (1989, ASQC)   Latzko Associates, North Bergen, NJ

Annual Quality Congress, Toronto, Ontario, Canada    Vol. 43    No. 0
QICID: 3649    May 1989    pp. 731-736
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Article Abstract

"Continuous Improvement - The Challenge for the Nineties" does not stop on the factory floor. In successful companies, this method pervades the entire organization. Staff functions such as sales, accounting, and personnel among others will engage in continuous improvement. It is through the leadership of all management ranks that the organization is able to drive for continuous improvement.

Management leads by example. There is little desire for the workers to use Control Charts, the keystone of Statistical Process Control (SPC) if their management does not know what to do with the results. On the other hand, if management also uses Control Charts in their daily work, the rest of the staff will get the idea of using this exceptional tool as well.

Control Charts are effective in all levels of the organization. When top management uses this method, they stop being re-active managers and become managers of processes. They are using a tool far more powerful than the financial statements they had used up to this time.

Financial statements as a rule display periodic activity in that they report the characteristic for the period (sales per month or accounts receivable more than 30 days). These figures are at times reinforced with comparisons to budgets, year-to-date, or like period last year. The reason for the additional data is to give direction that the organization is moving. These data neglect entirely the concept of variability and are the cause of a great deal of tampering.

By treating financial data as results of a process and using Control Charts for such data, modern managers gain a tremendous amount of insight into the workings of their operation and can make better decisions in guiding their process to success.


Quality management (QM)

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