Q1. New Wealth Bank is currently redesigning its performance measurement system. Up until now it has relied heavily on monthly cost variance reports to control the costs in each bank branch but would now like to have a more comprehensive performance measurement system that can help the bank detect problem areas before they become significant The bank is committed to achieving a high return on investment for shareholders and believes that careful management of customer service and costs will help to achieve that goal Required: 1. Identify some key performance indicators (KPIs) for the bank and some key performance drivers (KPDs) that could be used to manage operations at the branch level. Present these in the form of a Du Pont chart 2. Explain how continuous improvement could be built into the KPDs to assist in encouraging improved performance over time. Q2. Duncan's Pizzas is a chain of pizza stores, Pizzas are made fresh in-store, and then delivered to customers by a fleet of drivers. The senior management team has identified the strategic priorities for the business as on-time delivery and product quality. Required: 1. For each of the strategic priorities, suggest three performance measures 2. If the company is successful in achieving challenging targets for these performance measures, will it also necessarily achieve high profitability? Explain your answer. Q3. Glamour Glass Pty Ltd manufactures glass kitchenware at its Campbeltown factory. Its manufacturing equipment includes large machinery that was purchased 15 years ago Glamour Glass uses small production runs, and although the machinery is old it is reliable The company's products are much sought after by speciality gift stores and up-market department stores such as David Jones. It also sells its products to Saks of Fifth Avenue, in New York. While Glamour Glass has many products, among the most popular is the Puchi salad bowl and servers, which competes very favourably with the latest Italian salad bowls. Glamour Glass has just begun its first benchmarking activity. It has subscribed to an international benchmarking group that provides benchmarking data specifically tailored to different industries. The benchmarking data relating to the glass industry that is supplied by the agency includes product cost per kilogram of finished product. cycle time, reject rate, and direct labour and raw material costs per kilogram of product. The manufacturing manager, Paul Griswald, suspects that the benchmark data must relate to the famous Speedy Glass, renowned as the world's best glass manufacturer. Speedy Glass mass-produces glass kitchenware products using high-speed computer-controlled machinery The management accountant of Glamour Glass, Brian Hill, has prepared a report comparing the performance of Glamour Glass with the benchmark data Performance measure Glamour Glass Benchmark data Product cost per kilogram of product $68 $53 Direct labour per kilogram of product $16 $8 Raw material cost per kilogram of product $36 SB Cycle time per 100 units 60 minutes 15 minutes Reject rate 2% 3% Griswald is concerned about the size of some of the performance gaps between Glamour Glass' measures and best practice, and has asked Hil to investigate. Required: 1. Explain the concept of benchmarking and how it can be used to help a business improve its performance 2. Should Griswald be concerned about the size of the performance gaps? In your answer, consider each performance measure separately 3. Assuming that the benchmarking data relates to Speedy Glass, will it provide suitable benchmarks for Glamour Glass? If not, can you suggest what types of data may be more suitable? Q1. New Wealth Bank is currently redesigning its performance measurement system. Up until now it has relied heavily on monthly cost variance reports to control the costs in each bank branch but would now like to have a more comprehensive performance measurement system that can help the bank detect problem areas before they become significant The bank is committed to achieving a high return on investment for shareholders and believes that careful management of customer service and costs will help to achieve that goal Required: 1. Identify some key performance indicators (KPIs) for the bank and some key performance drivers (KPDs) that could be used to manage operations at the branch level. Present these in the form of a Du Pont chart 2. Explain how continuous improvement could be built into the KPDs to assist in encouraging improved performance over time. Q2. Duncan's Pizzas is a chain of pizza stores, Pizzas are made fresh in-store, and then delivered to customers by a fleet of drivers. The senior management team has identified the strategic priorities for the business as on-time delivery and product quality. Required: 1. For each of the strategic priorities, suggest three performance measures 2. If the company is successful in achieving challenging targets for these performance measures, will it also necessarily achieve high profitability? Explain your answer. Q3. Glamour Glass Pty Ltd manufactures glass kitchenware at its Campbeltown factory. Its manufacturing equipment includes large machinery that was purchased 15 years ago Glamour Glass uses small production runs, and although the machinery is old it is reliable The company's products are much sought after by speciality gift stores and up-market department stores such as David Jones. It also sells its products to Saks of Fifth Avenue, in New York. While Glamour Glass has many products, among the most popular is the Puchi salad bowl and servers, which competes very favourably with the latest Italian salad bowls. Glamour Glass has just begun its first benchmarking activity. It has subscribed to an international benchmarking group that provides benchmarking data specifically tailored to different industries. The benchmarking data relating to the glass industry that is supplied by the agency includes product cost per kilogram of finished product. cycle time, reject rate, and direct labour and raw material costs per kilogram of product. The manufacturing manager, Paul Griswald, suspects that the benchmark data must relate to the famous Speedy Glass, renowned as the world's best glass manufacturer. Speedy Glass mass-produces glass kitchenware products using high-speed computer-controlled machinery The management accountant of Glamour Glass, Brian Hill, has prepared a report comparing the performance of Glamour Glass with the benchmark data Performance measure Glamour Glass Benchmark data Product cost per kilogram of product $68 $53 Direct labour per kilogram of product $16 $8 Raw material cost per kilogram of product $36 SB Cycle time per 100 units 60 minutes 15 minutes Reject rate 2% 3% Griswald is concerned about the size of some of the performance gaps between Glamour Glass' measures and best practice, and has asked Hil to investigate. Required: 1. Explain the concept of benchmarking and how it can be used to help a business improve its performance 2. Should Griswald be concerned about the size of the performance gaps? In your answer, consider each performance measure separately 3. Assuming that the benchmarking data relates to Speedy Glass, will it provide suitable benchmarks for Glamour Glass? If not, can you suggest what types of data may be more suitable