EFFECTIVE RESOURCE MANAGEMENT IN AN AUSTERE PERIOD

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EFFECTIVE RESOURCE MANAGEMENT IN AN AUSTERE
PERIOD
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• VISION STATEMENT
• A first class faith-based Seventh-day Adventist
  institution building servant-leaders for a better
  world.

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MISSION STATEMENT

• Building people for leadership through quality
  Christian education, transforming lives,
  impacting society for positive change through the
  pervading influence of our graduates in service
  to humanity.

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To Achieve our mission, we are committed to

•   - Achieving excellence in our teaching,
  research
• program and service delivery.
•   - Imparting quality Christian education.
• - Instilling Christ-like character to the
  members
• of our community

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PHILOSOPHY

• BU philosophy is anchored on the harmonious
  development of the intellectual, physical, social
  and spiritual potentials of students and
  inculcating in men and women a nobility of
  character and stability of purpose needed in our
  society.

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• CORE VALUE
• - Adventist Christian Heritage
• - Accountability and Integrity
• - Honesty and transparency
• - Tolerance and humility
• - Intellectual freedom and responsibility
• - Unity in diversity
• - Open communication
• - Adventist Heritage

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• CORPORATE IMAGE STATEMENT
• BU is designed as a center of excellence for
  character development and scholarship a socially
  responsive, responsible and accountable
  institution in matters of commitment and action.

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• OBJECTIVES
• The traditional emphasis of the Seventh-day
  Adventist philosophy of education is on the
  balanced and harmonious development of the whole
  man in his physical, social and spiritual
  environment. Specific goals and objectives of
  Babcock University are therefore classified as
  follows
• Intellectual
• Occupational
• Aesthetic
• Physical
• Social
• Spiritual

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• BABCOCK UNIVERSITY ANTHEM
• Hail Babcock, Gods own University
• Built on the Power of his Word
• Knowledge and Truth, Service to God and Man
• Building a Future for the Youth
• Holistic Education, The Vision is still aflame
• Mental, Physical, Social, Spiritual Babcock is
  it!
• Hail Babcock, Gods own University
• Good life Here, And Forever More.

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• EFFECTIVE RESOURCE MANAGEMENT IN AN AUSTERE
  PERIOD
• Definition of Important Terms
• - Resource An available means
• - Management Judicious use of means to
• accomplish an end.
• Austere Period
• (a) Harsh or severe
• (b) Giving little or no space for pleasure

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•  What are the available means?
• - Materials
• - Human Resource
• - Space
• - Information
• - Relationship
• - Time

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• All the above-mentioned are required to achieve
  the objectives of the University as stated above.
  These resources are limited in supply and this we
  need to be frugal in using them. The period we
  are in is an austere period i.e no space for
  pleasure in the use of our resources.
• Resources can easily be put into sufficiency when
  it is backed up with adequate funding. In
  essence, the major focus is the utility of our
  resources this means that for every Kobo spent
  there must be corresponding adequate and
  sufficient value for it. There should not be a
  vacuum between spending and value.
• The major issue therefore is to have value for
  money at any point in time. This is a concept
  that will expose the main issues in resource
  management to achieve specific objectives.

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• VALUE FOR MONEY CONCEPT
• Value for money concept came into being as a
  result of public agitation to ensure adequate
  value for the tax payers fund as expended by
  public officers who are in charge of financial
  management in the United States of America. This
  concept spread its tentacles to Canada and some
  other European countries in the 70s. It is also a
  product of state auditors response to public
  agitation for more accountability from the
  operators the i.e. government financial managers.
  Recently the apparent merits of value for money
  concept became popular in the private sector.

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• DEFINITION OF VALUE FOR MONEY CONCEPT
• - A Comprehensive examination that provides an
  objective and constructive assessment of the
  extent to whereby financial, human, physical
  resources are managed with due regard to economy,
  efficiency and effectiveness. (Kandasamy 2003)
• - An appraisal of the extent to which resources
  were managed with due regard to economy,
  efficiency and effectiveness and in conformity
  with applicable regulations, rules and
  procedures. (Auditor General of Pakistan 2003)

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• - Value for money is achieved when a public or
  private body carries out its duties to a high
  standard at low cost. This can be summarized
  colloquially by saying that a good job is being
  done. Slightly more technically value for money
  is achieved when administration and service
  provision is economic efficient and effective
  (Jones and Bates 1990).
• Obviously there are some trifling differences in
  the above definitions, however, the core of value
  for money is transparent in all the definitions
  i.e. economy, efficiency and effectiveness. Value
  for money, therefore, is a requirement to
  maximize the use of scarce resources. The major
  focus of this presentation now will be on the
  application of the elements of VM to all our
  resources in our daily operations.

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• ECONOMY
• Economy may be defined as minimizing the cost
  of resources used for an activity having regard
  to the appropriate quality. In other words
  economy is the practice by management and staff
  of the virtues of parsimony, frugality and good
  house keeping. Economy relates to all types of
  resources such as physical, human, time and
  information. In acquiring any resource economy is
  observed when adequate attention is given to, the
  right amount, right place and the right time, and
  of the right kind and at the right cost.

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• In a situation when we seek economy in relation
  to quantity, quality, place, time and cost,
  standards are required to assess whether economy
  was observed in acquiring resources. A lack of
  economy could occur where there is overstating or
  the acquisition and use of overpriced facilities.
  Other examples are
• 2 pages question in a class of 100 students will
  require
• 100 photocopy papers. (standard)

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• Common Practice
• - 100 copies take 200 papers
• - Wastage about 15-20 sheets
• - But where the machine has been serviced in
  preparation for an examination and a back and
  front production is possible 100 sheets would
  have be used, by this there is a saving of 100
  extra sheets and wastage of about 20 sheets
  eliminated.
• - The time consumption or spent in producing 200
  pages with jamming and rough copies is far more
  than 100 pages own.
• -The risk of leakage is very high due to
  availability of rough copies.
• -The solution here is to get it right first time.

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• To establish economy of operation management will
  need to set standards at all levels. The example
  given above looks simple but if you can safe 100
  sheets from a course, it means 100 sheets from 10
  courses, it means 10,000 sheets in 10
  departments, it means 20,000 sheets in 2
  semesters. The cumulative effects of little
  savings here and there will end up with a
  material figure. Recall that when you save 100
  sheets you have saved, several other associated
  costs, like staple pins e.t.c.
• Setting of standards is very crucial to be able
  to carry out the operations economically. e.g 100
  photocopy papers is a standard for providing a
  two page question for 100 hundred students.
• -   Quality of materials should be set out in
  technical specification by the use of
  professionals.
• -         Acquisition at minimum acceptable
  standard cost within the local environment.

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• EFFICIENCY
• Efficiency refers to the relationship of inputs
  and outputs. It is relevant to the use of
  resources. Examples of efficiency are
  teacher-pupil ratio in a school and machine hours
  to output ratio in a factory. An increase in
  output without a corresponding increase in input
  or getting the same output as before with a
  reduced input indicates an increase in
  efficiency. Inefficiency can easily be identified
  when there is performance of work of surplus
  materials that are not needed to support
  operations. The focus of efficiency is to obtain
  maximum useful output from the resources devoted
  for an activity. Mostly this is demonstrated by
• -Demonstrating achievements of results by
  comparing performance with standards, targets and
  goals.

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• - Plan operations and budget resource
  requirements by providing data for comparing
  present and proposed methods and procedures.
• - Provide rational basis for pricing goods and
  services (when charges are made) e.g. Toner
  charge.
• - Let staff be aware of the expected results.
• Key elements in adopting efficiency measures
• - An awareness of the desired goals
• - A need to plan operation as efficiently as
  possible
• for all given level of resources
• - The need for structured organization
• - The provision of work instructions.

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• EFFECTIVENESS
• Effectiveness means that the service provided
  properly meets a real need. It has been defined
  as an ends oriented concept that measures the
  degree to which a predetermined goals and
  objectives for a particular activity or program
  are achieved. In other words effectiveness is the
  attainment of the right results from the usage of
  resources or organizational operations.
• In Babcock effectiveness can be viewed in three
  ways.
• - Program effectiveness relates to the continuing
  relevance of a program, the attainment of its
  intended objectives, its impact, and its
  cost-effectiveness.

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• - Operational effectiveness relates to the
  achievement of output targets, to the delivery
  systems for the goods and services produced and
  the cost-effectiveness of these systems.
• - Organizational effectiveness relates to the
  overall capability of the organization and the
  interactions among strategic planning, management
  structures and processes and human and financial
  resources all in relation to the mission and
  goals of the organization and the external
  environment.
• The evaluator should not forget to ask the
  question are the reasons that gave rise to the
  program in the first place still valid today?

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• Leaders, Managers, Efficiency and Effectiveness
• Joseph Campbell, in a lecture given at Tarrytown
  Conference center, New York, in 1985 said most
  people spend their lives climbing a ladder and
  when they get to the top of the wrong wall. Most
  losing organization are over-managed and
  under-led. Their managers accomplish the wrong
  things beautifully and efficiently. They climb
  the wrong wall.
• Efficiency means, doing things well for
  instance with good systems and inputs which avoid
  waste and rework.
• Effectiveness means doing the right things i.e
  achieving the objectives.
• Effectiveness
• Joseph Campbell, in a lecture given at Tarrytown
  Conference center, New York, in 1985 said most
  people spend their lives climbing a ladder and
  when they get to the top of the wrong wall. Most
  losing organization are over-managed and
  under-led. Their managers accomplish the wrong
  things beautifully and efficiently. They climb
  the wrong wall.
• Efficiency means, doing things well for
  instance with good systems and inputs which avoid
  waste and rework.
• Effectiveness means doing the right things i.e
  achieving the objectives.

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Effectiveness means doing the right things i.e
achieving the objectives. Economy means doing
them cheaply i.e. cost of labour, information,
materials, e.t.c are under control. Note no
matter how cheap your operation is, no matter the
degree of your efficiency, if your operation is
not effective the effort is a total waste A good
manager does things right (efficient). A good
leader does the right thing The importance of
leadership becomes obvious if it is considered
that economy and efficiency are of small
consequence if effectiveness is not
attained.
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• Warren Bennis and Joan Goldsmith in Leaning to
  lead identified Four demands that followers want
  from their leaders
• Purpose, direction and meaning
• - Issues
• - Constituency
• - Ethnic
• - Religion
• - Money
• - Service

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• Those with a purpose at variance with the
  laudable purpose of the leader will not have a
  sense of mission and will therefore not belong
  for too long. The leader not only must have
  direction, but also must communicate it in such a
  way that Ownership is created at every level in
  every corner of the entity
• -  Leaders must generate and sustain trust
  command and control cannot generate trust among
  stakeholders.
• -   Optimism All leaders need to be purveyors of
  hope once a leader loses optimism the objectives
  become difficult, if not impossible to attain and
  ineffectiveness sets in.
• Leaders have the capacity to convert purpose and
  vision into action and produce results. It is the
  outcome (effective results) that justified the
  inputs (resources).

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• Value for money concept wants us to note the
  following
• - Recognizes measurement of results from every VM
  actions
• -  What gets measured gets done
• -  If you do not measure results, you cannot tell
  success from failure
• -  If you cannot see success you cannot reward it
  
• - If you cannot reward success, you are probably
  rewarding failure
• -   If you cannot see success you cannot learn
  from it
• - If you cannot demonstrate result you cannot win
  support

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• COST REDUCTION STRATEGIES
• - Waste elimination Extravagance defeats
  economy and efficiency in the pursuance of value
  for money. Value for money concept is an action
  taken against waste. The following are important
  in waste elimination strategies.
• - Purchasing and supplies is an area where
  accumulation of savings on specific items, can be
  obtained and waste eliminated through determined
  and painstaking attention to detail. Emphasis
  should be placed on the following key issues
  during a cost reduction programme of this
  function
• (a) Ensure economic purchases are made for every
  item. Improved purchasing arrangement backed up
  by a more aggressive and skilful buying can lead
  to between 10-15 percent saving.

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• (b) Pay attention to the four-main initiatives
  that are helpful at reducing cost of purchases.
  These are
• - Modify specifications by rationalizing the
  number of goods purchased or by carrying out a
  value analysis targeted at volume/quantity
  reviews.
• - Shop around the Internet makes this easy and
  much more fun in our information technological
  age
• - Take full advantage of purchasing scale
• - Manage storage and distribution facilities more
  efficiently.
• (c) Obtain competitive quotations.
• (d) Ensure that invoice prices are matched
  against agreed tender/contract prices.

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• (e) Ensure that general stock takes are carried
  out regularly and stock differences overages
  and shortages are properly investigated before
  approval for them to be written on or written off
  is given. Authority to approve write on and write
  off should reside with the chief executive of the
  organization.
• (f) Make regular efforts to reduce the volume and
  value of stock held. On average there is scope
  for reducing stock levels by at least 20percent
  with a consequent release of a considerable
  amount of tied up working capital.
• (g) Regularly carry out technical evaluation of
  stock held in order to distinguish operative,
  surplus, slow moving obsolete and scrap stock.
  This will aid housekeeping of materials in
  pursuance of efficiency and effective-ness in
  cost control.

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• (h) Promptly dispose off surplus, slow moving,
  obsolete and scrap materials despite the argument
  of the staff. It helps to cut out waste and tidy
  up the warehouse. It also enhances material
  visibility and retrieval and above all it
  releases funds tied up in dead stock.
• (i) Use alliance relationships to source
  expensive items to minimize the ordering cost.
• (j) Computerize the maintenance, procurement and
  material management function for optimal
  efficiency and effectiveness.

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• 2 Asset Management - The following questions
  are important to stimulate actions
• -Do we acquire real and needed assets.
• -If we do not evaluate current operations, how
  can we tell if there is no opportunity to improve
  and what impact could be derived.
• -Do our management reports trigger action or
  merely record past performance
• -Do our organization-wide goals, short term,
  long-term, support our overall asset management
  initiatives?

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• - From acquisition to maintenance to equipment
  replacement planning, where are the significant
  opportunity to reduce capital and operating
  expenses.
• Costs can be reduced only when they are
  identified and understood. What precise value to
  the facility is added by that cost? Is there an
  alternative? How does it compare? How can
  resources continue to contribute value to the
  organization, but at a reduced cost? Without the
  ability to benchmark costs and make an objective
  analysis, opportunity to improve is sharply
  limited.

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• Failure to implement an effective asset
  management program can result in
• - Overpaying for maintenance and repairs.
• - Failing to take advantage of discounts in
  place.
• - Increasing budgets on best-guess estimates.
• - Rising variable costs.
• -Reactive rather than proactive management.
• -Increasing costs of reliability.

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• Specific areas of attention
• Land and Buildings- It is necessary to regularly
  carry out a review of an organizations land and
  building management in order to ensure that the
  full financial and economic benefit is obtained
  from property owned. The maintenance of property
  becomes poor once the property is not occupied
  and the cumulative effect is rapid deterioration
  of the property.

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• Motor Vehicle and Transport
• Waste in this area summarize into
• -Having too many vehicles leading to idle fleet
  and misuses of vehicles.
• - Using unnecessarily wide range of vehicle types
  and supplies thereby missing out on fleet
  discount, and lower spares inventory and costs.
• - Poor pooling of joint or department use of
  vehicles leading to poor utilization.
• - Excessively high maintenance cost being
  incurred on a vehicle that ought to be boarded.
• - Not taking full advantage of fleet insurance
  and
• -Uncontrolled maintenance expenditure resulting
  from a lack of vehicle maintenance policy.

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• Maintenance/Procurement/Inventory - Planned
  maintenance is important to maintain the
  integrity of plant and equipment, ensure that
  plant useful life is enhanced and that optimal
  capacity utilization is obtained there from.
• The integration of maintenance with procurement,
  inventory and costing system has the following
  benefits
• - Reduce down-time
• - Improve reliability
• - Monitor safety
• - Control of maintenance expenses
• - Cut spare part inventory and inventory costs
• - Improves purchasing efficiency and
• - Deploys assets, personnel and other resources
  more effectively

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• (3)Human Resources Management
• Management of the pay roll
• Eliminate job for the boys
• Eliminate top heavy organizations
• Eliminate imbalances between activity level and
  staffing
• Square pegs

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• (4)Judicious academics programming
• review of course load
• courses offered
• departmental merges
• program consolidation and discontinuation
• (5) Exploit the full potential of purchasing
  consortium participation

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• Conclusion
• The only feasible way to achieve our vision,
  mission, goals and objectives during austere
  period like this, is for all departments, units
  and directorates to observe consciously the
  application of value for money in all their
  activities.
• Thanks you and God bless.