Operational Efficiency and Internal Controls
Achieving true operational efficiency is an ever moving target for most organisations. We have learned what applies through our accounting business applies equally to manufacturing, distribution and operational support, and we provide a range of methodologies to support operational efficiency through process analysis and management.
Operational standards help to define operational excellence through efficiency and effectiveness measures, but the reality is that without an ongoing measurement of the actual processes and their efficiencies, most organsiations become less efficient over time. And while many companies approach operational efficiency from a pure cost cutting perspective, again the reality is that cost cutting can actual lead to lower productivity, and reduced profitability.
In a formal sense, productivity refers to how well an organisation converts input (such as people, materials, machines, skills and capital) into goods and services or output. But today, it is no longer limited to measuring ratios of inputs and outputs. Basically, increasing productivity just means working smarter. You can look for opportunities to improve efficiency just about anywhere in your company.
Our approach is all about process, and the efficiency of those processes measured in terms of costs, deviations, time, and effectiveness. MBA's Operational Efficiency approach works because it provides an enduring framework for sustained efficiency, rather than just a simple consulting exercise.
- We document the existing processes, and their efficiency levels
- We develop "to be" processes, and model efficiency gains verses operational impact
- We assist in the implementation of the new processes
- We deliver a platform and method for measurement of the efficiency of processes
- And we implement a management philosophy designed to sustain the ongoing regular measurement and reporting of operational efficiency
Internal control is a process effected by an business's structure, work and authority flows, people and management information systems, designed to help the business accomplish specific goals or objectives. It is a means by which an businesses resources are directed, monitored, and measured. It plays an important role in preventing and detecting fraud and protecting the business's resources, both physical (eg machinery and property) and intangible (eg reputation or intellectual property such as trademarks). At the organisational level, internal control objectives relate to the reliability of financial reporting, timely feedback on the achievement of operational or strategic goals, and compliance with laws and regulations. At the specific transaction level, internal control refers to the actions taken to achieve a specific objective (eg how to ensure the business's payments to third parties are for valid services rendered.) Internal control procedures reduce process variation, leading to more predictable outcomes.
More information?
Geoff Missen, FCA
Director
e gmissen@mbapartnership.com.au
t 07 5557 8700