MANAGEMENT TOOLS

Graphs
Classical Tools
What to look for in a graph:

Mean  The average of all the data.

Maximum  The maximun value

Minimum  The minimum value

Sample  The number ofvalues in the series.
Size
 The maximun value minus the
Range
minimun value.
 Indicates how widely data is spread
Standard
Deviation
around the mean.
 Pie Charts

Pie charts are Sales

used to show data
in proportion to
1er trim.
the whole data 2º trim.
set. The entire pie 3er trim.
4º trim.
represents all the
data, while each
slice represents a
different class or
group within the
whole.
 Pie Charts

Things to look for:

• Look for the largest piece to find the most
common class.
• Notice relative sizes of pieces. Some classes
might be unexpectedly similar or different in
size.
• Try looking at a two-dimensional view of the
pie; 3D charts are attractive but they can make
pieces at the front of the picture look bigger
than they really are.
 They are useful for
Bar Charts comparing classes
groups of data.
or

Bar Charts, like pie

Others
charts, are useful for
Teddy Bears comparing classes or
March
groups of data. In
February
Flowers
January bar charts, a class or
Chocolates
group can have a
single category of
0 1 2 3 4 5 6
data, or they can be
broken down further
into multiple
categories for
greater depth of
analysis.
Bar Charts
Things to look for:
Bar charts are familiar to most people, and interpreting
them depends largely on what information you are
looking for. You might look for:
• the tallest bar.
• the shortest bar.
• growth or shrinking of the bars over time.
• one bar relative to another.
• change in bars representing the same category in
different classes.
 Bar Charts
Other tips:
• Watch out for inconsistent scales. If you're
comparing two or more charts, be sure they use
the same scale.
• Be sure that all your classes are equal. For
example, don't mix weeks and months, years
and half-years, or newly-invented categories
with ones that have trails of data behind them.
• Be sure that the interval between classes is
consistent.
Histograms
A histogram is a specialized type of bar chart. Individual
data points are grouped together in classes, so that you
can get an idea of how frequently data in each class
occur in the data set. High bars indicate more points in a
class, and low bars indicate less points. In the histogram
show above, the peak is in the 40-49 class, where there
are four points.  Histograms can be manipulated to show
different pictures. If too few or too many bars are used,
the histogram can be misleading. This is an area which
requires some judgment, and perhaps some
experimentation, based on the analyst's experience.
Histogram
 Run charts
They display performance over time; also, an average line can be
added to a run chart to clarify movement of the data away from
the average. For example, a run chart in a hospital might plot the
number of patient transfer delays against the time of day or day of
the week. 
60
50
40
Blouses
30 Jeans
20 Dresses
10
0
January February March April
Run Charts
Alternatives with run charts:
 An average line, representing the average of all the

y values recorded, can easily be added to a run

chart to clarify movement of the data away from
the average. An average line runs parallel to the x
axis.
 Several variables may be tracked on a single chart,

with each variable having its own line. The chart is

then called a multiple run chart.
Ishikawa Diagram
 Ishikawa Diagram
 The cause and effect diagram is used to explore all the potential or
real causes (or inputs) that result in a single effect (or output). Causes
are arranged according to their level of importance or detail, resulting
in a depiction of relationships and hierarchy of events. This can help
you search for root causes, identify areas where there may be
problems, and compare the relative importance of different causes.
Causes in a cause & effect diagram are frequently arranged into four
major categories. While these categories can be anything, you will
often see:
 manpower, methods, materials, and machinery (recommended for

manufacturing)
 equipment, policies, procedures, and people (recommended for

administration and service).

Flowchart
Flowcharts are maps or
graphical
representations of a
process. Steps in a
process are shown with
symbolic shapes, and
the flow of the process
is indicated with arrows
connecting the
symbols. 
 Flow Charts
In quality improvement work, flowcharts are
particularly useful for displaying how a process
currently functions or could ideally function.
Flowcharts can help you see whether the steps of a
process are logical, uncover problems or
miscommunications, define the boundaries of a process,
and develop a common base of knowledge about a
process. 
Flow charts
To construct an effective flowchart:
 Define the process boundaries with starting and ending

points.
 Clearly define each step in the process. Be accurate and

honest.
 Identify time lags and non-value-adding steps.

With a flow char you can:

 Identify responsibility for each step.

 Brainstorm for problems in the process.

 Determine major and minor inputs into the process with a

cause & effect diagram.

 Choose the most likely trouble spots with the consensus

builder.
Pareto Charts
A Pareto chart, is a type of chart that contains both
bars and a line graph, where individual values are
represented in descending order by bars, and the
cumulative total is represented by the line.
Pareto Charts
Pareto Charts
Control Chart

Control charts, also known as Shewhart

charts or process-behavior charts, in
statistical process control are tools used to
determine if a manufacturing or business
process is in a state of statistical control.
Control Charts
Gantt Chart
Radar Chart
The radar chart is a plot that consists of a sequence of
equi-angular spokes, called radii, with each spoke
representing one of the variables. The data length of a
spoke is proportional to the magnitude of the variable
for the data point relative to the maximum magnitude
of the variable across all data points.
Radar Chart / Spider chart
 Scatter Diagrams
Scatter Plots (also called scatter diagrams) are used to investigate
the possible relationship between two variables that both relate to
the same "event." A straight line of best fit (using the least squares
method) is often included. Things to look for:
 If the points cluster in a band running from lower left to upper

right, there is a positive correlation (if x increases, y increases).

 If the points cluster in a band from upper left to lower right, there

is a negative correlation (if x increases, y decreases).

 Imagine drawing a straight line or curve through the data so that

it "fits" as well as possible. The more the points cluster closely

around the imaginary line of best fit, the stronger the relationship
that exists between the two variables.
 If it is hard to see where you would draw a line, and if the points

show no significant clustering, there is probably no correlation.

Scatter Plots
 Other Tools
Non-Classical Management Tools
 Balanced Scorecard
 Benchmarking
 Outsourcing
 Strategic Alliances
 Strategic Planning
 Business Process Reengineering
 Change Management Programs .
 Core Competencies
 Customer Relationship Management
 Customer Segmentation
 Mission and Vision Statements
 Open Innovation
 Supply.Chain Management
 Total Quality Management
 Business Process Reengineering
It is used to achieve dramatic improvements in productivity,
Reduce costs and
cycle time by cycle times and quality. Here, companies start with a blank
eliminating sheet of paper and rethink existing processes to deliver more
unproductive value to the customer.
activities and the

employees who Methodology:

perform them.
Improve quality by
 Refocus company values on customer needs;
reducing the  Redesign core processes, often using information technology
fragmentation of to enable improvements;
work and  Reorganize a business into cross-functional teams with end-
establishing clear to-end responsibility for a process;
ownership of  Rethink basic organizational and people issues;
processes. Workers  Improve business processes across the organization.
gain responsibility
and can measure

their performance
based
on prompt

feedback.
Customer Relationship
Management
CRM is a process companies use to understand their
Creates a customer groups and respond quickly—and at times,
relation instantly—to shifting customer desires.
between Common Uses
the • Gather market research on customers, in real time if necessary;
organizati • Generate more reliable sales forecasts;
• Accurately gauge the return on individual promotional
on and the programs and the effect of integrated marketing activities,
customer. and redirect spending accordingly;
• Feed data on customer preferences and problems to
product designers;
• Increase sales by systematically identifying and managing
sales leads;
• Improve customer retention;
• Design effective customer service programs
 Total Quality Management
Total Quality Management (TQM) is a systematic approach to
Increase quality improvement that marries product and service
productivity; specifications to customer performance. TQM then aims to
• Lower scrap and produce
rework costs; these specifications with zero defects. This creates a virtuous
• Improve product cycle of continuous improvement that boosts production, customer
reliability; satisfaction and profits.
In order to succeed, TQM programs require managers to:
• Decrease time- Assess customer requirements
to-market cycles; • Understand customer needs and design products and services that
• Decrease cost-effectively meet or exceed those needs.
customer service Deliver quality
problems; • Identify the key problem areas
• Increase • Train employees to use the new processes;
competitive • Develop effective measures of product and service quality;
• Promote a zero-defect philosophy across all activities;
advantage.
• Develop feedback mechanisms to ensure continuous
improvement.