Operations performance

• Operations managers


  Have a unique opportunity to learn from their experience of operating their processes in order and more about those processes
• Process knowledge


  Can build into the skills, knowledge and experience that allow the business to improve over time
• Capabilities

  Allow the business to innovate in the future
• Operations performance objectives


  Tightly defined set of objectives used to judge operations performance at the operational level
• Operations performance objectives

  • Do things right (quality)
  • Do things fast (speed)
  • Do things on time (dependability)
  • Be able to change what you do (flexibility)
  • Do things cheaply (cost)
• Quality


  The most visible part of what an operation does, and something customers find relatively easy to judge
• Quality


  Reduces costs and increases dependability
• Speed


  The elapsed time between customers requesting products or services and their receiving them
• Speed


  Reduces inventories and risks
• Dependability


  Doing things in time for customers to receive products or services exactly when they are needed, or at least when they were promised
• Dependability


  Saves time and money, and gives stability to the operation
• Types of flexibility


  • Product/service flexibility
  • Mix flexibility
  • Volume flexibility
  • Delivery flexibility
• Flexibility


  Speeds up response, saves time, and maintains dependability
• Mass customization


  Producing customized products and services in a high-volume, mass-production manner to keep costs down
• Agility


  A combination of all the five performance objectives, particularly flexibility and speed, allowing an operation and its supply chain to respond to market uncertainty
• Cost


  The lower the cost of producing goods and services, the lower the price to customers
• Productivity


  The ratio of what is produced by an operation (output) to what is required to produce it (input)
• Productivity measures


  • Single-factor productivity
  • Multi-factor productivity
• Improving productivity


  Reducing input costs while maintaining output, or making better use of inputs
• Improving other performance objectives

  Improves cost performance
• Polar representation

  A way of representing the relative importance of performance objectives for a product or service
• Performance measurement

  The process of quantifying action to determine the performance of an operation
• Performance measurement issues


  • What factors should be included as performance measures?
  • Which are the most important performance measures?
  • What detailed measures should be used?
• Composite performance measures


  Measures that combine several individual measures to present an overall picture of performance
• Balanced scorecard


  A commonly used approach to performance measurement that incorporates measures related to financial, internal process, customer, and learning and growth perspectives
• Trade-offs


  The extent to which improvements in one performance objective can be achieved by sacrificing performance in others
• Efficient frontier


  A concept that distinguishes between repositioning performance on the efficient frontier and improving performance by overcoming trade-offs