Nonfinancial Measures of Quality and Customer Satisfaction

Indicate the future needs and preferences of customers, as well as specific areas that need
improvement. Management accountants usually maintain and present these nonfinancial measures. In
this sense, nonfinancial measures of quality are leading indicators of future long-run performance,
unlike financial measures of quality that focus on the short run.

Nonfinancial Measures of Customer Satisfaction

To evaluate how well they are doing, companies measure customer satisfaction over time. Some
measures are:

1. On-time delivery rate (the percentage of shipments made on or before the scheduled delivery date) -
Dto sa on time delivery rate ay yung tamang oras ng pagdeliver ng isang product. example nagorder ka
tapos ang sabi ay 10 am dadating ang product tapos dumating yung mismong product ay 9:30 am diba
yung mismong magiging rating mo sa kanila ay 100% dahil nadeliver ang product bago ang exact time na
sinabi nila. Pero kapag ang inorder mo ay dumating beyond the delivery time and date hindi yun best
quality dahil late ng denilever eh kaya minsan hindi nakakasatisfy.

2. Delivery delays (the difference between the scheduled delivery date and the date requested by the
customer) - Minsan kasi may mga customer na nagrerequest ng date kung kailan idedeliver yung
mismong product. example omorder ka ng appliances tapos sabi ng mismong binilhan mo ay ngayong
monday idedeliver ang product pero nagrequest ka na sa wednesday na lang ediliver tapos nong
nagwednesday na at hindi din na deliver ang product yun so theirs a delivery delay.

3. Percentage of products that fail soon or often - pagnagbebenta kayo ng mga product katulad ng mga
appliances diba kapag may bumili tapos yung mismong product na binenta mo ay ibinalik sayo kahit
wala pang 1 linggo dahil sira na daw kaagad at hindi na magamit dahil marami ng defect kaagad. Kapag
ganon na binabalik sayo ang benenta mo sign kaagad yun na ang iyong product its either na fake or hindi
maganda yung mismong qualita at hindi matibay.

4. Number of customer complaints (Companies estimate that for every customer who actually
complains, there are 10 to 20 others who have had bad experiences with the product or service but did
not complain. - isa rin ito sa mga meassure whether you are provuding good quality of product kung
marami ang nagrereklamo but that not always the case, sometimes yung mga complaints or feedback ng
customer is useful para sa atin dahil mas nagiimprove tayo. Hindi dahil sa nagcocomplaint ay dahil poor
quality minsan dahil din sa pinapakitang ugali ng mismong nagdedeliver or yung mismong seller kaya sila
nagcocomplaints kaya nga we need the customer feedback. Minsan out of 20 customer kalahati lang
dyan ang complaints dahil minsan yung iba parang ayaw na lang nilang sabihin ang problema parang
hinahayaan na lang nila.

5. Number of defective units shipped to customers as a percentage of total units shipped - Dito
namankunwari ay nagdeliver ka ng 10 product tapos ang defect ay 9 so yungmismong product ay palpak
so almost hundred percent na walang quality, you check also the ration that is a none financial
measure.

6. Market research information on customer preferences and customer satisfaction with specific
product features - so isa rin ito sa mon financial measure of quality if the customer preference is
different fow what you offering to them. its possible na magbigay sila ng feedback about sa iyong
product either na hindi sila satisfy or satisfy sila pero iba yung mismong preferences nila. Any changes in
the market either in their preferences theirs a effect in your production.

Nonfinancial Measures of Internal Performance

To satisfy their customers, managers must constantly improve the quality of work done inside their
company. Most companies use nonfinancial measures of internal quality to supplement financial
measures, such as prevention, appraisal, and internal failure costs. Examples of trends to gauge quality
are:

1. Number of defects for each product line - So if you are selling garments ang product lines mo ay buo
from head to toe kahit t- shirt, short, shoes or sock, you check also kung alin sa mga product mo ang
may defect compaired to your product line.

2. Employee turnover (ratio of number of employees who leave the company to the average total
number of employees) - isa pa ito sa non financial measure of quality dto marami ang nagleleave or
nagreresign mabilis din ang turnover ng mga employee. Yung part na kahahire mo palang tapos
maghahhire ka ulit, their something wrong in the organization.

3. Process yield (ratio of good output to total output) - dto naman po ay example ay taga print kayo
tapos yung piniprint niyo ay kalahati ng rem ng coupon band ang naubos tapos kalahati naman ay
nareject so something is wrong kasi mas marami ang reject over the goid output so merong problema sa
performance sa operation. So we have to check it.

Time as a Competitive Tool

Many companies consider "time" as a driver of strategy. They need to measure time to manage it
property. Two common operational measures of time are customer-response time and on-time
performance

Managing customer-response time and on-time performance which reveals how quickly companies
respond to customers’ demands for their products and services, and on-time performance, which
indicates how reliably companies meet their scheduled delivery dates. We also show how managers
measure the causes and costs of delays.
Customer-Response Time

Customer-response time is the duration from the time a customer places an order for a product or
service to the time the product or service is delivered to the customer. Fast responses to customers are
of strategic importance in industries such as construction, banking, car rental, and fast food. Kasi kapag
matagal yung delivery naiinip yung mga customer kaya nga sinabi na time is the essence, na tintawag na
leverage between time and quality. Hindi lang ang mismong oras ang dapat bigyan pansin kundi pati
yung quality dahil kapag masama yung product na ideniliver na hindi pasok sa gusto ng mismong
customer hindi nila babalikan ang iyong shop tapos yung tagal pa mismo ng pagdeliver talagang maiinip
ang customer. Kaya merong leverage between quality and time.

In this figure 6-2. The component of customer response time makikita dto sa table ang pagproceso ng
isang product from the time the customer place their order for your product at to the time that order is
deliver to them. Dto once na nagorder ka talaga hindi maiiwasan ang waiting time. Diba dto sa receipt
time kasi dto inaalam pa ng marketing department ang exact requirement ng product na inorder ng
isang customer kasi inaalam pa ng marketing depatment kung ano yung mismong gusto ng isang
customer, katulad na lang sa design at quality diba para masatisfy ang isang customer dapat talagang
tingnan ang product ng ayos para ang customer ay paulit ulit na bumili at balikan ang shop. Then
manufacturing cycle time ito yung mismong oras na itatagal ng order bago ito marecieved ng
manufacturing to the time na ang final product ay na produced na. And to delivery time na kung gaano
katagal ang pagdeliver ng isang product patungo sa mismong customer. Minsan inaabot ng ilang araw
ang pagdeliver ng product kapag malayo yung pinanggalingan ng product talagang maghihintay ng
matagal bago maideliver delivery pero kapag naman malapit mabilis lang yung pagdeliver. so you need
to manage your time also.