Week 1 - 2 Flashcards
Why Operations performance Matters?
Do things better
Continuous learning & improvement
Strategic impact
Better process= Better outcome
Three levels of Operations Performance
Societal level ( people, profit, planet) Strategic level ( Learning, Capital, Risk, Cost, Revenue) Operational level
Societal level ( people, profit, planet)
Corporate Social responsibility (all the stakeholders in a business)
Operational level
(Quality, Speed, Dependability, Flexibility, Cost) Can´t have all points.
Revenues
Customer likelihood to recommend the company (scale from 1- 10)
9-10 Promoters
7-8 Passives
1-6 Detractors
NPS=Promoters - Detractors
Why is Operations performance vital in any organization?
Operations can either make or break a business
The positive effects of a well-run operation include a focus on improvement, the building of ´difficult to imitate´ capabilities, and an understanding of the processes that are building block of all operations
The negative effects of a poorly run operation include failures that are obvious to customers and expensive for the organization, a complacency that leads to the failure to exploit opportunities for improvement.
How is Operations performance judged at a societal level?
Operations decisions affect a variety of stakeholders
This idea that operations should take into account the impact on a broad mix of stakeholders is called CSR
Performance at the societal level often uses the idea of the triple bottom line
It includes
the social bottom line ( business should accept that they bear some responsibilities for the impact they have on society)
environment bottom line (Incorporates the idea that operations should accept that they bear some responsibilities for the compact they have on the natural environment)
and economic bottom line (incorporates the conventions; financial measures of performance derived from using operation´s resources effectively
How is Operations performance judged at a strategic level?
The type of decisions and activities that operations managers carry out can have a significant strategic impact
Operations can affect economic performance in five ways:
- it can reduce the cost
- it can achieve customer satisfaction through service
- it can reduce the risk of operational failure
- it can reduce the amount of investment that is necessary
- it can provide the basis for future innovation.
How is Operations performance judged at an operations level?
The five ´performance objectives´ that are used to assess the performance at an operational level are quality, speed, dependability, flexibility and cost
Cost
The ability to provide a product or service at a price the customer is willing to pay.
Quality
The ability to provide products or service that meets customer´s expectations.
Flexibility
The ability to change a product or service to meet customer’s needs.
Dependability
The ability of an organization to consistently meet its promises to the customer.
Speed
The ability to provide products or services with as short a time delay as possible between customer order and delivery.
How can operations performance be measured?
It is unlikely that for any operation a single measure of performance will adequately refelect the whole of a performance objective
the balanced scorecard ia a commonly used apporoach to performance measurements and incorporates measures related to:
how do our customers sees us (the customer perspective)
How can we continue to imptove and build capabilities (the learning and growing perspective)?
How do operations performance objective trade off against each other?
Trade-offs are the extent to which improvements in one performnce objective can acchieved by sacrificing performance in others.
The´ efficient frontier´ concept is a useful approach to articulating tarde-offs and istiguishes between repositioning performance on the efficient frontier en improving performance by overoming trade-offs
