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5 Performance Objectives

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by

Chris Taylor

on 8 March 2013

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Transcript of 5 Performance Objectives

Flexibility makes a business more competitive and allows them to serve customers more effectively 5 Performance Objectives Quality Speed Dependability Flexibility Cost ~ consistent conformance to customer expectations ~ Businesses must quantify quality by meeting specifications Standardization leads to higher levels of conformance Quality must be compared before it has any real meaning Vs. The Gap Model of Quality Expectation Experience Quality reduces costs Less wasted materials Less wasted time Fewer problems to fix Quality increases revenue Better brand image Higher sales volume Less price competition Increasing quality can increase costs Fat Duck McDonalds Product / Service Flexibility High variation High customization ~ The ability to introduce new or modified products or services ~ Mix Flexibility ~ The ability to provide a wide range of products ~ Similar products Fixed menus Greater flexibility Allows for variation (e.g. for allergies) Low skilled staff Volume Flexibility Queuing Flexible contracts Good supplier relations Backwards integration Fixed contracts Long through-put time Quick service expected ~ The ability to alter output over time ~ Delivery Flexibility ~ The ability to alter the timing of the delivery of goods and services ~ Flexibility increases the ability to react to changing conditions faster than competitors Wide variety and mass customization provide a competitive advantage ~ Being able to change an operation to allow it to react to the business environment ~ ~ The time between customers requesting a product or service and receiving it ~ (Through Put Time) Internal Speed External Speed Reducing in-process inventory Reducing risk Fast, simple, low priced Complex, high priced Layout and flow of process must be considered Speed depends on the nature of the business A compromise is needed between speed and the other performance objectives Flexibility increases competitiveness and enables better customer service ~ Doing things on time for the customer and maintaining a sense of predictability ~ Dependability means different things in different parts of the organization Internal dependability (e.g. reliable machinery and consistent processes) External dependability (e.g. customers receive orders on time) Dependability saves time Dependability saves money Dependability gives flexibility ~ Making goods or providing services in the most cost effective way ~ Keeping costs low gives a business a competitive advantage Keeping costs low provides two pricing strategies Set prices low to increase sales Keep prices the same and receive a higher profit margin Different costs can occur in many different areas of an operation Operation managers aim to reduce these costs It's important to maintain a balance between performance objectives 99p - £6.50 £195 References Slack, Chambers and Johnston. 2010. Operations Management, 6th edition. Prentice Hall. The Fat Duck. 2013. The Fat Duck. [online] Available at: http://www.thefatduck.co.uk [Accessed: 2/3/2013] The Guardian. 2012. The world's 50 best restaurants. [online] Available at: http://www.guardian.co.uk/news/datablog/2012/apr/30/world-50-best-restaurants-list [Accessed: 2/3/2013] American Customer Satisfaction Index. 2012. June 2012 and Historical ACSI Benchmarks. [online] Available at: http://www.theacsi.org/acsi-results/acsi-benchmarks-june [Accessed: 1/3/2013] McDonalds. 2013. McDonalds - Food. [online] Available at: http://www.mcdonalds.co.uk/ukhome/Food.html [Accessed: 27/2/2013]
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