Controlling Process

CONTROLLING PROCESS:

Process

1. Setting Performance Standards:

• Standards are set-to compare with the actual performance
• They can be set in both quantitative as well as qualitative terms. I
• Example:- producing 300 units in a month

2. Measurement of Actual Performance:

• Actual Performance is measured using controlling techniques like personal observation, sample checking, and ratio analysis.
• Example:- Actual production may comes:-  290,250,310,300 units,

3. Comparing Actual Performance with Standards:

• Comparison will tell the difference  between actual performance and standards
• If actual production is 290 unit and standards was 300 units (already fixed). Difference is = -10 units

4. Examine Deviations:

• Finding the extent of deviation and causes of deviations
• Deviations can be observed by using
  1. Critical path control: - focus should on deviation in important areas.
  2. Management by exception:- minor deviation should be avoided

5. Taking Corrective Action:

• When the deviations are minor no corrective action is required
• When differences are major immediate actions are required. For example
  • Training of employees
  • Adding more workers and machines
  • Increasing no of working hours