Operations Performance Flashcards
What are the 5 Performance objectives?
Competitiveness
Quality -doing it right Speed -doing it fast Dependability -doing it on time Flexibility -doing different things Cost -doing it cheaply
Types of Quality
Specification
Conformance (e.g. mass production)
Importance of Quality
Reduces Cost
-The fewer mistakes made by each process, the less time to correct mistakes, less confusion/ irritation
Increases Dependability
Leads to:
- External Impact = increased customer satisfaction
- Internal Impact = price premium / stable and efficient process
Define Quality
Quality is consistent conformance to customers’ expectations, I,e, ‘doing things right’,
things which the operation needs to do right will vary according to the kind of operation.
Define Speed
Speed means the elapsed time between customers requesting products or services and their receiving them
Importance of Speed
External customers:
-the faster the product delivered, the more likely to buy it/ more they will pay/ the greater the benefit they receive.
Inside the Operation:
- reduces inventories
- reduces risks (by demand variability)
Define Dependability
Dependability means doing things in time for customers to receive products or services exactly when they are needed, or at least when they were promised
Importance of Dependability
Inside Operation:
- saves time
- saves money
- gives stability
Define Flexibility
Flexibility means being able to change the operation in some way.
(the increased ability of operations to do different things for different customers.)
Types of Flexibility
Product/service Flexibility
-the operation’s ability to introduce new or modified products and services
Mix Flexibility
-the operation’s ability to produce a wide range or mix of products and services
Volume Flexibility
-the operation’s ability to change its level of output or activity to produce different quantities/ volumes of products over time
Delivery Flexibility
-the operation’s ability to change the timing of the delivery of its services or products
Importance of Flexibility
External:
-mass customisation
(high flexibility gives the ability to produce a high variety of products or services)
Internal:
- speeds up response
- saves time
- maintains dependability
Importance of cost
- how the vast majority of operations are measured
- competition on price
- firms exist to make profit- margin
- influenced by other four performance objectives
(n.b. to increase cost performance, improve performance of other objectives)
Things to consider
consider the trade-offs between the performance objectives,
i.e. if you want to maximize quality, you may need to consider speed more expendable
optimize the synergies between the performance objectives.
i.e. even if you want to maximize quality, you cannot consider cost and speed entirely expendable
Define Agility
Agility is really a combination of all the five performance objectives but particularly flexibility and speed
-implies that operation and the supply chain of which it is a part can respond to the uncertainty in the market.
Define Productivity
the ratio of what is produced by an operation (its output) to what is required to produce it (its input)
Productivity = Output from operation / input to the operation
