BUS4101-3

Five Key Rationales of SPC Inconsistencies at Elevate Accounting The financial system used by each department in Elevate Accounting is user friendly and customizable. In other words, each department can customize the system as per its particular requirements and work without any coordination with the other departments. Although the system works well during the year, it produces inconsistent reports at the end of each financial year. Therefore, the management of Elevate Accounting has decided to modify the financial system, so the system has a centralized database and works at integrating all the departments. Elevate Accounting can use the five rationales of SPC to make the required modifications and create an effective system. Control Variation The output of the new process should be as per the set limit. Any variation to the output must be documented and explained. This method helps control variation and provides consistent output. Continual Improvement In this case, SPC will help all departments of Elevate Accounting understand the process as a whole, identify the external special causes of variation, and eliminate the special causes, if any. This understanding will allow different departments to collaborate and integrate and help each other in completing financial tasks, such as making payments to vendors and service providers. As a result, the process will be continually evolving and improving. Predictability of Processes When causes of variations are identified, the variations are eliminated, and the process is continually improved, then the output of the process becomes predictable. For example, with SPC, all departments will know such things as the dates and amounts of checks that need to be paid, the vendors that need to be paid, and the vendor data that needs to be recorded. Elimination of Waste In this case, the new process developed by using SPC will yield predictable and consistent output. Therefore, there will be less time, effort, and cost spent on rework, coordination, and resolving confusion. In other words, SPC will eliminate wasteful activities and increase the quality of the output. Product Inspection SPC can help Elevate Accounting reduce costs and increase competitiveness by regularly testing, maintaining, and inspecting the new process. © 2017 South University