Strategies: Performance objectives: quality, speed, flexibility, dependability, cost, customisation, Flashcards
Strategies
Define performance objectives?
are goals that relate to particular aspects of the transformation processes. These objectives or targets will be set so that the business becomes more efficient, productive and profitable.
The six main performance objectives that can be allocated to particular key performance indicators (KPIs) are:
What is quality?
Determined by customer expectations - quality of design - quality of conformance - quality of service
Design determines the influence, extend how well the product is made and delivered
Quality of Conformance - how well the product meets the standard of a prescribed design with certain specifications, how well the reliable service is, how well the service meets the need of client, how timely or responsive the service delivery is
What is Speed?
Speed refers to the time it takes for the product and the operation processes respond to change in market demand. some requires that change in input can be made in response to consumer demand.
- reduce wait time, shorter lead time, faster lead times, faster processing time
What is flexibility?
Flexibility refers to how quickly operation processes can adjust to change in the market. Changes market demand and pressure business. time and flexibility are related
What is dependability?
Refers to how consistent, and reliable a business products are. Dependability, in respect to goods, refers to how long the product are useful before they fail
What is custimisation?
Most products tend to be standardised; however, over time customer preferences are creating a custom option for goods. Customisation refers to creation of individualised products to meet the specific needs of the customers. Services are generally customised, although aspects of services can be standardised as seen in the fast-food sector.
A customer orientation to operations might imply that over time businesses would push operations processes towards customisation. However, while there is greater choice for consumers these days than at any time in history, standardi- sation of products is still the most widely used option. Variations in product features such as colour, size and functionality offer some level of differentiation between products. Consequently, the production of many of today’s goods and services are based on the principle of mass customisation; a process that allows a standard, mass-produced item such as a motor vehicle or computer, to be personally modified to specific customer requirements. However, full customisation is rare and can only be offered when products (goods or services) are created after an order specifying the requirements is received. The cost of customisation is higher than the cost of mass producing standardised products. For this reason, only businesses with a product that can be easily adapted tend to customise unless the actual business model is one of a customised approach to all products.
What is cost?
Cost as a performance objective refers to the minimisation of expenses such that operations processes are conducted as cheaply as possible. When a business sets up its operations processes, often the costs incurred determine the price. Over time, businesses seek to become more efficient and thus allocate costs better. The acquisition of new technologies can help a business to lower costs, use inputs better and minimise wastage. All of these reduce operational costs. Moreover, a business will also seek to reduce supplier costs, manage inventory to reduce holding and movement costs, and find distribution methods that are most cost and time effective.
All of the performance objectives will be allocated particular targets or goals, and will be measured against the achievement of those targets. In this way, the performance objectives are expressed as KPIs, with particular levels associated with each. Although not all performance objectives can be fully realised all the time, a business will have targets for each of them and will allocate resources to target the performance objective that is most likely to have the best impact on the bottom line or business profitability.
