Operations Performance And Strategy Flashcards
What is competitiveness?
How effectively an organization meets the wants and needs of customers relative to others that offer similar goods or services
What are the four operations performance objectives?
- quality
- speed
- dependability
- flexibility
- cost
Why is quality important?
- Internally:
- quality operations both reduce costs and increase dependability
- prevents errors slowing down throughput speed
- prevents errors causing internal unreliability and low dependability - Externally: quality is an important aspect of customer satisfaction or dissatisfaction
Ex: goods are in a good condition, patient receive appropriate treatment, buses are clean and tidy
Why is speed important?
Internally:
- helps to overcome internal problems
- reduces inventories by decreasing internal throughout time and reduces risk by delaying the commitments of resources
Externally:
- the elapsed time between a customer asking for a product or service and getting it
- enhances product or service value
Ex; time between requiring mad receiving treatments, customer settling out on journey and reaching destination.
Why is dependability important?
- doing things on time, operations seek to influence dependability of the delivery of goods and services
Internally: - prevents late delivery slowing down throughout speed
- prevents lateness causing disrupted time and effort
Externally:
- enhances product or service reliability in the market
Ex; number of appointments that are cancelled kept to a minimum, keeping to the timetable
Why is flexibility important?
- an operations ability to change
Externally: the product/service, the mix of this, the volume, the delivery time and the distribution coverage)
Internally:
- can speed up response time, save time wasted in changeovers, and maintain dependability
Ex; new treatments, new routes, new good or promotions
Why is cost important?
Cost is always an important objective for operations management, even if not competing directly on price
Internally:
- cost performance is helped by good performance in the other performance objectives
Externally: low costs allow organizations to reduce their price in order to gain higher volumes, or increase profitability on existing volumes
What are costs influenced by?
Not only by I out costs, when producing services and products, such as:
- bought in material,, technology and facility costs and staff costs
But also by the operations characteristics (the 4 V’s) and other performance of the operation ( quality, speed, dependability and flexibility)
What are polar diagrams used for?
- to indicate the relative importance of each performance objective to an operation or process
- to indicate the difference between different products and services produced by an operation or process
What are trade offs and how do operations performance objectives trade off against each other?
- the extent to which improvements in one performance objective can be achieved by sacrificing performance in others
- useful approach to articulate trade-offs and distinguish between repositioning performance on the efficient frontier and improve performance by overcoming trade offs
What is strategy and what is operations strategy?
It considers the pattern of strategic decisions and actions which set the role, objectives and activities of the operation.
- Direction/content (what to do) the approaches a company can use to help it chose the markets in which to compete, understand the competitive drivers and assess how it can influence its market position
- Implementation/process: (How to do it) prioritize where and how to spend the company’s time and money in order to better meet the competitive drivers
What are the three key attributes of operations strategy?
- Implementing: be dependable, operationalize strategy, explain practicalities
- Supporting: be appropriate, understand strategy, contribute to decisions
- Driving: be innovative, provide foundation of strategy and develop long term capabilities
What is the four stage model of contribution? (Hayes and Wheelwright, 1984)
- model used to evaluate the role and contribution of the operation function, it traces this on stage scale where 1 is the most negative role and stage 4 is the most essential
Stage 1: internal neutrality: holds the organization back from competing effectively, inwards looking and at best reactive with very little positive to contribute toward competitive success
Stage 2: external neutrality: compare itself with competitors, and get as good as competitors. It adopts the best practice
Stage 3. Internally supportive: amongst the best in their market, aspire to be the very best in the market. Achieve this through gaining clear view of competitors. Links strategy with operations. Tries to be internally supportive by providing a credible operations strategy
Stage 4: externally supportive: company views the operations function as providing the foundations for its competitive success, look to the long run, give an operation advantage - redefine industry expectations
What are the four different perspectives on operations strategy?
- Top down perspective: operations is a top-down reflection of what the whole business wants to do
- Bottom up perspective: operations improvements cumulatively build strategy
- Market requirements perspective: translate market requirement into operations decisions
- Operations resource perspective: involves exploiting the capabilities of operations resources in chosen markets
= none of see four perspectives alone provides the full picture of what operations strategy is but together they provide some idea of the pressures which forms the content of the strategy
Distinguish between order qualifiers and order winners?
Order qualifiers: the minimum threshold for consideration
Order winners: competitive advantage in marketplace
Shifts over time: order winners may become qualifiers
