ARM CO Inc
ARM CO Inc: mid-western steel division
The key features of the new performance measurement system
Rob Cushman, Bob Nenni(director for finance) and other directors began to design the new system early in 1990. Meanwhile, they defined about 10 key performance measures for the Kansas City Works of Armco’s midwestern steel division, such as the heats per week, tons per man hour, disabling injury index, and sales price minus cost of net metal. The ten key measures can be distributed in three parts in the new system. In first, the performance measure of heat per week is the only relevant to the melt stores, and secondly, the performance measure of manufacturing ares include tons per man hour, disabling injury index, the total quality index, spending and maintenance performance. Thirdly, there are three measures (cash flow and product mix, inventory days on hand and sales price minus cost of net metal) related to the plant-wide (not cost center) measures.
The improvements promised
The new system was designed both as a means of providing middle and lower level managers. It provided a greater understanding of how to operate and control the division’s business, and to achieve the desired results. The rob and bob promised two major improvements by the new system. The first is that the managers would focus on the few key objectives that largely determine the success the Kansas City Works, at the same time, they do not get involved in the detail before the issues are existed.
Second, there is an improved basis for evaluating operating managers and manufacturing supervisors by the new system. For example, the balance set of performance includes quality, schedule achievement, safety, and cost. In addition, the cost report should be provided.
The key features of the new performance measurement system
Rob Cushman, Bob Nenni(director for finance) and other directors began to design the new system early in 1990. Meanwhile, they defined about 10 key performance measures for the Kansas City Works of Armco’s midwestern steel division, such as the heats per week, tons per man hour, disabling injury index, and sales price minus cost of net metal. The ten key measures can be distributed in three parts in the new system. In first, the performance measure of heat per week is the only relevant to the melt stores, and secondly, the performance measure of manufacturing ares include tons per man hour, disabling injury index, the total quality index, spending and maintenance performance. Thirdly, there are three measures (cash flow and product mix, inventory days on hand and sales price minus cost of net metal) related to the plant-wide (not cost center) measures.
The improvements promised
The new system was designed both as a means of providing middle and lower level managers. It provided a greater understanding of how to operate and control the division’s business, and to achieve the desired results. The rob and bob promised two major improvements by the new system. The first is that the managers would focus on the few key objectives that largely determine the success the Kansas City Works, at the same time, they do not get involved in the detail before the issues are existed.
Second, there is an improved basis for evaluating operating managers and manufacturing supervisors by the new system. For example, the balance set of performance includes quality, schedule achievement, safety, and cost. In addition, the cost report should be provided.