Business, Quality, Competition & Quality Management

Business, Quality, Competition & Quality Management

In this world of competition, it has become absolutely necessary for a businessman to keep continuous watch over the quality of the goods or services produced. To watch over the quality and maintain quality of the products and service can’t be denied. Having once brought the product, or getting served once the consumers feel satisfied with regards to its quality, price, quantity, time, effort etc.  a kind of goodwill for the product or service is developed which helps to increase sales and develop brand equity of the brand. However, if the consumers are not happy with the quality of the products or services or both and their complaints are not given proper attention, it will be impossible for the producer  to continue, compete and sustain in the market.

“Quality”, “Quality management” and “Competition in quality” has been leading buzzword in the business world. The notion of quality in business focuses on the saving and generating additional revenue that organizations can realize when they eliminate errors and fault throughout their operations and produce products and services at optimal level of quality desired and expected by their customers. Errors are to be eliminated as soon as possible because if errors and mistakes are repeated the cost adds unto significant amount.

As we know there are two types of industries, they are manufacturing industries and service industries. In manufacturing industries measurement and evaluation of product quality becomes easy it deals with the tangible things, materials and process. The process standards for manufacturing firms are easy to specify and can be analyzed using different quality improvement tools. In manufacturing industries, the producer alone influences the process through which the product is made. Consumers do not have any role to influence the product quality during production.

Much different from manufacturing industries, service sectors have intangible component associated with them as the combination of technical and human behavioral aspects that becomes extremely difficult for valuation of the quality. Most service functions have a time constraint associated with it which means if the services are not provided within the time required, it cannot be used for later time. The involvement of both service producer and customer is essential in the process of delivery of service. As behavioral aspects are associated with the service sectors, measurement of quality of the service becomes difficult. One customer may be fully satisfied with the service provided where other may not. It also depends upon the surroundings and different other conditions. It is difficult to identify which characteristics of the service are to be blamed.

A businessman and a manager should always use effective tools to maintain and control over quality and involve in sound quality management. Quality management is the process of planning, organizing, directing, controlling, identifying and administrating the activities that aims to achieve the quality objectives of an organization. Quality management measures how closely a good or service conforms to the specified standard. To sustain in competition an entrepreneur should focus in maintaining quality with good quality management system and do better business.

Affiliate marketing or programs and how to be an affiliate marketer

How to be an affiliate...

Affiliate program or affiliate marketing is one of the best way to make money online. In affiliate marketing you become a affiliate whose job is to offer or suggest the products of others business and get prefixed commission as the purchase is made by the person you suggested or you offered the product or service. Just like a sales-person of a car show-room gets certain percent of sales as commission but you don’t expect monthly salary. Its not creating and selling your own product. The more the purchase of the products or services you offered  or suggested is made the more you are going to earn. Being an affiliate marketer  you can earn in  different ways. Though adsense is also said as a type of affiliate marketing but I am not talking about that. Unlike referral marketing you don’t need to know the person you suggest or offer product or service. Affiliate marketing is a long established model and it is first started by amazon.com.

You can also be an affiliate marketer. For that you have to make a better platform to bring a pool of buyers. The best way is to have your own website. In the e-commerce websites like amazon, flip-kart, eBay at the end of its page you can see make money with us or become an affiliate marketer. You need to sign up for that and you’ll get an affiliate link which will link to their site. For an example, you sign up for amazon and as you bring the person/purchaser to their site and he/she makes purchase you will get commission and even you get commission if he/she makes a purchase of any products from their site but within 24 hours. There are many e-commerce websites among I’d suggest the following:-

*eBay

*click bank

*amazon

*avantage

*avantlink

*rakuten

*cjaffiliate

For affiliate marketing you need a good platform to advertise the products you better have your website. Now, go to the e-commerce website and sign-up that site which you are interested for partnership. Select the product category you want to do marketing in your website. It would be better if you choose the categories that are similar to the contents of your websites and get the link of the product and start to become an affiliate and earn. 

If you have any idea and question more about please comment below and share with your friends.

Benchmarking, its process and importance in business

To maintain the quality and sustain in the competitive global market has become major issue for every business holder. Every producers and marketers should focus on better product and service offering in the market place.  Producers and marketers may wonder about their offering in the market than that of the competitors or the best offerings (competitive products or services). For them benchmarking has been an effective tool for measure and maintain their performance and offerings. Benchmarking is the continuous process of comparing a company’s strategy, products or service offerings, and processes with those of market leaders and best-in-class organizations to know how to succeed and know the errors and faults. It provides the answer why that organization has better results than theirs and why it is the best in class organization. Benchmarking simply is measuring the performance against that of best in class companies or the search of industry best practices that lead to superior performance and results. Best practices usually are the innovations in terms of the use of technology, management practices, or human resources that are recognized by the customers and industry experts. In business it been important to compare own business with competitors and what are the reasons behind the competitors are more successful, why not us.

Benchmark is a point of reference against which things and process are measured. Point of reference or standards can be in any forms. They can be measured in products or process, management styles, technology or any that are even comparable and influences in organizational performance. It can be measured by question about the products or services like how many, how much, how much cost, how reliable. Benchmark doesn’t stand alone, there must be a comparison one should be better in result or output. By studying other organizations and comparing the answers to those above (how) questions, one can be able to measure the performance against the others. As a result, one will be able to set new process, new goals and new styles and adapt the best practices in his/her organization. This, in return helps to satisfy customers with the best quality, cost, products and services. Benchmarking enables an organization or business to reach where it is able to be and where it wants to be. So, Benchmarking is the best tool and technique for measuring organizational products, services and processes against those of its competitors in search for best practices that will lead to the best performance and customer satisfaction.

Benchmarking helps all the companies to pave the path for success. Benchmarking requires considerable effort and costs but it has been found to bring best result. There are lots of benefits that a growing and developing company gain from benchmarking, but it has got less importance for best in class companies.   Benchmarking promotes a thorough understanding of the company’s own processes that is the company’s current profile by determining the strength and weakness. It enables comparisons of performance measures in different dimensions, with the best practices for the particular measure and involves comparison with several companies which are best selected for measure. Benchmarking process involves in analyzing and adapting the practices of superior competitors rather than invention, by which it saves the time and cost of research and development. Benchmarking also facilitates human resource management; it provides a basis for training, recruitment and selection of human resources in the organization. Employees will be able to know the gap between what they are doing and what best in class organizations are doing. Employees training will be facilitated as by what sort of training and development of employees will bring the better result. Employees will also be able to able to develop themselves and learn self-actualization. Benchmarking allows organizations to set realistic, rigorous new performance targets as it is learned from best and the best are followed there will be low chances of failure and waste of time, effort  and money. Another benefit of benchmarking is that it allows organizations or companies to define specific gaps in performance and to select the processes to improve. It enables the company to redesign its products and services to achieve results that meet or exceed customer expectations.

At a glance, benchmarking can be defined as, “a continuous process that involves in internal and external measurement of products, services and processes that leads to better practice and improved performance with the support to establish realistic improvement goals.

Benchmarking process

There are different ways and methods of benchmarking that may vary from company to company but the fundamental or basic approach is the same. The specific way of benchmarking of one’s company may not work for the other or may not bring better result for the other. As the company processes, operations and management styles differs with the others. Benchmarking itself is not a solution it only shows the path to solution. A successful benchmarking reflects the culture of organization, works within the existing infrastructure and is harmonious within the leadership philosophy. There are different processes or steps of benchmarking made by different companies and they are successful.

Motorola inc. uses the following five step benchmarking process below.

1. Decide what to benchmark,

2. Select companies to benchmark,

3. Obtain data and collect information,

4. Analyze data and form action plan and

5. Recalibrate and start the process again

AT & T uses nine step process given as below.

1. Project conception,

2. Planning,

3. Preliminary data collection,

4. Best in class selection,

5. Best in class collection,

6. Assessment,

7. Implementation planning,

8. Implementation action and

9. Recommendations

Xerox divided its initial benchmarking procedure into ten steps. The benchmarking can’t be said best if it has more steps or some few steps. As benchmarking is step-by-step process, the steps and procedures should be followed as per the need. Common steps of benchmarking are described as below:-

1. Identify what to benchmark: Benchmarking is an effective to drive an organizational performance to optimum level. Firstly benchmarking should be well targeted, well planned, structured and organized. What to benchmark? Should be identified, because it will be very costly investment in resources with minimal return on investment. In this step benchmarking objectives, targets, people to be involved, process and scope should be determined. Setting of boundaries and flow chart the process may also be necessary.

2. Determine what to measure: Once the process, targets, objectives and what to measure are identified. Now, it’s time to look at similar process in other organizations. Comparison of the organization process with others should be meaningful so clear and accurate measure should be opted before looking at the processes in other organizations. For this, measurable items should be found like, overall time to complete the process, completion time, number repeats, costs and scarp. Process measures are also needed to be established by looking outside the process of own organization and considering the measures of your external customers requirement and measures of internal customers and suppliers requirements. To confirm what to measure is determined or what measure to use, refer back to your original objectives.

3. Identify who to benchmark: This is the step of finding organizations to benchmark. Once what to benchmark and what to measure is clear, it’s time to conduct general research from different sources. These sources may be trade magazine, industry publications, computer databases, and telephone or mail surveys, benchmarking consultants or market research. Out of few organizations that have sparked your interest, narrow the list of most fitted choices for your process. Industry’s best organizations processes and competitive or organization with best performance are often selected for benchmark.

4. Collection of data: After the list is narrowed and organization to benchmark is identified, the next step is to gather information on performance level related to benchmarking targets and objectives and analyze how they manage their processes to achieve these levels. Data are collected from internal sources which are the past research data available within the organization. Data are also collected from public information that is information found in public access resources and other companies who discovers new ideas and make careful observations. Benchmarking information can also be obtained by questionnaires and site visit.

5. Analyze data and determining gap: The real purpose of benchmarking lies here. Both quantitative and qualitative data collected are to be analyzed appropriately and gaps are determined.  Quantitative data collected can be analyzed and plotted on graphs to identify the performance gaps between your organization and others. Average process time, average down time per unit and average percent of reworks are analyzed and gap are found out. On the other hand, qualitative analysis and gaps includes organizational policies and practices (philosophy used and management), procedural policies and practices (technology, method and task function) and structural policies and practices (budgeting and inventory practices).

6. Set goals and implementation: After analyzing the data and determining gap with both quantitative and qualitative views, goals are to be set for the process. A goal is the desired level of performance or result which provides the direction and focus to the organizational activities. Goals are to be measurable, realistic, finite and achievable in increments. As the goals are set implementation begins. Implementation means the action plan which includes determining the tasks, timelines and responsibilities by dividing the goals into separate and measurable tasks and putting them in order and includes who is responsible for each task and setting dates for the start and completion of every task. Contingency plans are also developed which is prepared to handle unexpected problems or events.

7. Monitor and control the process: once the action plans are made and implementation is done there will be changes and adjustment by everyone in the organization becomes essential. It is necessary to monitor and control over the activities as there are high chances of misunderstanding and misconceptions. To keep benchmarking alive it will be important to track changes and make benchmark a habit. Evaluation of changes and progress reports are necessary with the control and monitor of employees, suppliers and organizational resources to track the changes. Monitor and control is always necessary for organizations because it will be always worst if any attempt of an organization is out of track. Benchmarking should be made habit as it will always results better productivity in an organization.

These steps are only the base (path) for the proper benchmarking process and one generate his/her own style for benchmarking and succeed.

Reasons for benchmarking 

Products, service and process improvement can take place effectively when there is relation to established standards. Benchmarking is also a tool for total quality management (TQM) in an organization where total quality management (TQM) is a well structured approach for meeting and exceeding customers needs expectations by creating an organization-wide participation and commitment in planning and implementation of continuous improvement in product or services, processes and operations. There are adequate reasons for benchmarking as it sets targets, suggests priorities and shows improvements in operations that will lead to gain by eliminating cost of time, energy and money for research and development. There are organizational internal and external components that are directly and indirectly the reason of benchmarking. These components can be said as drivers of benchmarking.

The external drivers include the followings:-

*customers: - They continuously demand better quality, low price etc.

*competitors: - They constantly try to get ahead and conquer the market.

*law: - Changes in law always require improvement of product and increase buyer protection.

The internal drivers include the followings:-

*company’s target: - If the targets of the company can’t be met than it will drives for benchmarking.

*technology:- technology development and innovations is the other reason for benchmarking. A fundamental change in processes is often required to benefit fully from introducing new technologies.

*self-assessment:- Self-assessment results which provides opportunities to learn from adapting best practices in the industry.

The reasons of benchmarking can be found in organization from different angles and different ways. Some possible reasons may be becoming competitive, having or following industry best practices, defining customer’s requirements, establishing effective goals and develop true measures of productivity.

Capital budgeting for financial management...

Capital budgeting for financial management and its process

Financial management is of prime importance in virtually all organizations that are performing any types of activities. It helps to set rational goal of the firm and guides how financial decisions should be made to achieve the organizational or business goal. Financial management is also important to an individual equally. For sound financial management good financial decision making is very essential and for good financial decision making the concepts, techniques and theories of finance should be known.

Every businessman should have proper knowledge of financial management for effective and efficient management of finance. Among the various techniques one of the most important techniques is capital budgeting technique. Budgets are of two types they are capital budget and operational budget. Operational budget is the budget that is planned and prepared for short period. It is prepared maximum for a year and is simply the estimation and planning for the business operation within a year. Capital budget in other hand is the long –term budgeting which may be five years, ten years and even more than twenty years. Capital budgeting depends on the size and nature of assets and properties a company or business acquires in near future. Capital budgeting is necessary for a business entity to get or step forward in the business and make important and risky decisions like new projects, business extensions, new plant and machinery, research and development. In the context of capital budget is provision of resources for acquiring fixed assets. Capital budgeting is the way of acquiring the fixed assets or process of investment in capital projects. Capital budgeting is the step-by-step process which includes identification of investment opportunities, prediction of relevant cost and benefits of identified projects, confirmation and monitoring & controlling the projects. Capital budgeting if done properly than there is sure the project runs towards success.

Following process should be adopted for successful capital budgeting:

1.     *  Find out why to invest: There can be many and different reasons why to invest. Reason may be form any sources it can be from, operation department to replace a plant, research and development department for development of new  products any board members may have reason to make investment in some profitable sector or may decide to expand the business. Proposals of investment are generated in this step of capital budgeting process. Reasons may be either not deniable or may be progressive for organization.

2.     * Estimation of cash flow of proposal: Cost and benefit of investment proposal with the time and effort required are measured in terms of cash flow. Expected cash flows of the proposed projects over the project period are estimated in this step. Firstly, Net cash outlay (initial investment) is estimated and annual cash flow which is the difference of incoming and outgoing cash from the investment on the proposal is predicted. Lastly, terminal cash flow which is the net cash flow at the end of the project is calculated.

3.     * Evaluation of the proposal: After the estimation of the cash flows of the proposals or projects the next step is the evaluation of the proposal. There are some methods to evaluate the proposal it can be done both by discounted cash flow method, non-discounted cash flow method or combination of both. Discounted cash flow method includes net present value method, internal rate of return method, modified internal rate of return method, and profitability index. Payback period calculation is commonly used non-discounted cash flow.

4.  * Post completion audits of proposal: The proposal is not passed or approved without full understanding and passing through different level of authority. The level of authority depends upon the organizational hierarchy, organizational size and number of authority holders. Usually, the entire capital budgeting proposal reaches to the president of the organization. Proposed projects are launched after getting due approval and acceptance from the authority. Finally, capital budgeting is done after.

These are the fundamental steps for capital budgeting that you can go through. Now, let us know about the projects and its classifications. As above I have already stated proposal may come from any sources. Those proposals after passing the steps or process of capital budgeting becomes a project. The projects are classified as independent projects, dependent projects, mutually exclusive projects, replacement projects, expansion projects and diversification projects. They are further described below:-

a.    # Independent projects: Independent projects are those type of projects in which, selection of one project does not prevent the selection of next or other projects. Approval of one project does not hamper the other project. For example installation of petrol pump and construction of mall are independent projects.

b.     # Dependent projects: dependent projects are those projects whose cash flows affect each other. The selection of one project directly affects the other or cannot neglect other project. For example construction of housing colony and land plotting are dependent projects.

c.     # Mutually exclusive projects: A project is said to be mutually exclusive projects if selection of one project neglects or rejects the other projects. For example construction of hotel or hospital in a land.

d.     # Replacement projects: Replacement project replaces the old project with the new one. Because of many reasons a project may not function well here replacement projects are necessary. For example replacement of old machines with new one due to wear and tear.

e.     # Expansion projects: expansions projects are those projects that are approved to expand the business. Expansion of business to new geographical area, opening new retail outlet are some examples of expansion projects.

f.   # Diversification projects: The projects that diversify the business are diversification projects. For example new product development or getting into new markets.

Capital budgeting should be done appropriately to gain profit from the business and have successful business. If you have any question relating capital please comment.

Organizing and Its importance in business...

          

(pic credit:pixabay)

Organizing and Its importance in business…

A business cannot be successful without proper management. Proper management means sound planning, organizing, directing and controlling of each and every activity that a business performs. Among the four pillars of management organizing is one that cannot be denied for better performance and results. Organizing is an important function of management. Organizing is process of identifying and combining of various activities, establishing authority and responsibility, relationship among job positions and maintaining good coordination and communication within the enterprise. Organizing function includes bringing together physical, financial, human and other resources and ensures optimum utilization of the resources available to achieve the desired performance or desired goals. Organizing activities in management is basically concerned with the creation of organizational structure which serves as the framework within which the enterprise performs. It links the activities or actions with the authority and responsibility in an enterprise. Organizing overall goal is to enable people to work together for common goal.

Organizing not only refers to the number of groups or department of people, but also the way they are interconnected and are related to each other. Organizing makes the activities best connected with the authority and responsibilities given. Organizing leads to proper arrangement of man, material and resources at right place and time. Organizing involves in dividing the work activities, linking the functions or activities and making organizational hierarchy with proper authority and reporting structure.

Organizing has high importance and need in a business or an organization for management, and a sound organization or business is a tool of effective management. With better organizing better management direction, coordination and control is possible.

Importance of organizing

* Clear authority and responsibility: Organizing assigns each person to perform a respective task to perform; he/she is given necessary authority to perform the task. This helps to avoid confusions and conflicts in the organization.

* facilitates coordination: Organizing aims at establishing relationship among various sections, departments, activities and functions so that each people perform different tasks in a coordinated manner.

* develops morale: By having appropriate authority and responsibility employees are allowed to make decisions for the task which accelerates to develop morale and build confidence.

* Optimum utilization of organizational resources: Organizational resources like, man, material and money are utilized at optimum level because of clearly defined jobs and defined resources for each activity.

* Specialization of the work: As organizing ensures right person at right place and time as per his/her skill, ability and knowledge which leads to improvement or specialization in the quality of work and also saving the time and expenses.

* Eliminates duplication of work: With proper organizing everyone is clear about their work and responsibilities as per their ability by which it eliminates duplication and re-works.

* Growth and Diversification: Organizing makes the organizational structure by which it facilitates the growth, diversification and expansion of business.

* Adaptation of change: Change in environment can bring both positive and negative result for an organization. Organizing makes the structure of organization flexible enough to adapt the changes like product/service market change, technological change, political change and other different internal and external environmental change.

These are some of the importance of organizing. Good organizing never brings negative results; make sure you and your business is well organized. Have you ever felt that organizing has brought good outcome in your business please share to us.