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5 Performance Objectives
Transcript of 5 Performance Objectives
Inside the operation internal customers will judge each other’s performance by how reliable other processes are in delivering resources on time. #4 Flexibility cost-being productive, quality-being right, speed-being fast, dependability-being on time and flexibility-being able to change. #2 Quality It is typically defined throughout literature as the degree of excellence of something when measured against other things of a similar nature.
The Quality of a product can be measured in terms of performance, reliability and durability. "Being able to change the operation in some way"
Delivery flexibility #5 Speed #1 Costs One major operations objective, especially where companies compete with price is 'cost'
Cost advantages : by finding appropriate costs to produce goods and services whilst still receiving returns on investment. Reducing the costs of resource inputs OR making better use of them, by cutting out waste for example, allows for the increase in productivity.
Acceptable price which covers costs + profit.
Reducing costs is therefore fundamental. By using quality management methods such as TQM, products and services can be seen as superior, leading to improved customer satisfaction, increased sales and improved company reputation. Taxi Taxis Connected to four other performance objectives
Speed is favorable
However these additional benefits mean higher costs. #3 Dependability Dependability saves time
Dependability saves money
Dependability gives stability Taxis A taxi’s dependability is of less importance than a bus because it does not have a set route.
However they deliver a direct fast service.
Yet at a higher cost. Flexibility speeds up response.
Flexibility saves time.
Flexibility helps maintain dependability. Taxis Adaptable
Meet customer needs and wants
Anytime, any day
Variety of locations Time between the beginning of an operations process and its end.
Externally: time between customers requesting and receiving products/services.
Internally: time between when materials begin and finish production. Relative success of speed brings other benefits.
Dependability is much easier maintained.
Reduction of costs due to the decreased necessity to manage transformed resources through the operational process. Taxis There is a legal limit for the speed of driving.
However on average still quicker as there are no stops. The cost of producing products and services is influenced by the 4 V’s: -volume -variety -variation -visibility
If managed properly, high quality, high speed, high dependability and high flexibility can not only bring their own external rewards, they can also save the operation cost. Consumers may focus on the specification quality of a product or service, comparing it against competitors.
Whereas producers might measure the conformance quality of the product. Different things for different customers.
One form of flexibility involves the production of high variety products in mass manners to help minimize costs.
This approach is called mass customization . Polar representation indicates the relative importance of the five performance objectives. It can also be used to indicate the difference between different products and services produced by an operation or process. Polar representation The closer the line is to the origin, the less important the objective is to the operation. Taxis •Cost is of less importance so the line is closer to the polar origin.
•Taxi flexibility is of greater value in comparison to bus service.
•Objectives are interrelated. Trade Off's Taxis Two generic views on trade-offs.
1. Improving the performance of one objective can potentially enhance others.
2. ‘Repositioning’ performance by trading off improvements in some for a reduction in performance in others. Consumers perspective: The further you want to travel, thus increasing the flexibility of the service, the greater the cost you incur.
This highlighting that increasing one objective has detrimental effects on another.
However, it is relative on how important each performance objective is to the consumer. Summary The first is that they are all multidimensional.
The five objectives trade off with one another.
Therefore businesses must allocate varying importance to each of the five performance objectives. And this can be demonstrated using polar representation. Exam Question SmartSuits offers a very quick turnaround to customers who purchase its tailoring services. High levels of performance at the speed objective also result in internal benefits to SmartSuits:
A. Speed increases the need to manage transformed resources as they pass through the operation, thus increasing costs
B.Speed helps to overcome internal problems by forcing attention to internal dependability
C.Speed comes at a price and cost performance is reduced 5 Performance Objectives The five objectives are linked in one-way or another.
The success of the operation as a whole is therefore reliant on how smoothly each of these objectives runs
Trade-offs regularly occur. Exam Answer By process of elimination.
Speed decreases the need to manage transformed resources
speed does not always come at a price and can in fact reduce costs, thus improving cost performance.
The correct answer is B. 1st
Operations Management Aleem Billy Nicole Olivia Cari Charlotte The End Thanks for watching :)