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Performance
OPERATIONS PERFORMANCE IS VITAL FOR ANY ORGANIZATION
Operations management can make or break a business. The operations function
gives the ability to compete by providing the ability to respond to customers and by
developing the capabilities that will keep it ahead of its competitors in the future.
Sustainable business = creates an acceptable profit for its owners, but minimized
the damage to the environment and enhances the existence of the people with
whom it has contact. It balances economic, environmental and societal interests.
Operations should judge themselves on the triple bottom line principle of people,
planet and profit
At the level of the individual, social bottom line performance means devising jobs
and work patterns which allow individuals to contribute their talents without undue
stress. At a group level, it means recognizing and dealing honestly with employee
representatives. In addition, businesses are also part of the larger community and
should be recognizing their responsibility to local communities by helping to
promote their economic and social well-being.
Stakeholders = people and groups who have a legitimate interest in the operations
activities
- Internal (employees etc.)
- External (customers etc.
Speed can give the potential for faster delivery of services and products and save
costs
WHY IS DEPENDABITLIY IMPORTANT?
Dependability means doing thing in time for customers to receive their goods or
services exactly when they are needed, or at least when they are promised.
Customers might only judge the dependability of an operation after the product or
service has been delivered. Initially this may not affect the likelihood that customers
will select the service they have already consumed it. Over time, however,
dependability can override all criteria.
Mass customization
One of the beneficial external effects of flexibility is the increased ability of
operations to do different things for different customers. So, high flexibility gives the
ability to produce a high variety of products and services. Normally high variety
means high cost. Furthermore, high-variety operations do not usually produce a high
volume.
Mass customization = producing customized products for each individual customer
while managing top produce them in a high-volume, mass-production manner which
keeps costs down.
Through flexibility in design (DELL)
Through flexible technology
Agility
Agility is really a combination of all the five performance objectives, but particularly
flexibility and speed. In addition agility implies that an operation and the supply
chain of which it is a part can respond the uncertainty in the market. Agility means
responding to market requirements by producing new and existing products and
services fast and flexible.
Flexibility can give the potential to create new services and products, in a wider
variety and with different volumes and with different delivery dates, as well as save
costs.
Output
One input
Single-factor productivity =
the operation theoperatoin
Output
All put
Multi-factor productivity =
the operation theoperatoin
Improving productivity
One obvious way of improving an operations productivity is to reduce the cost of its
inputs while maintain the level of its outputs. This means reducing the costs of some
or all of its transformed and transforming resource inputs. Productivity can also be
improved by making better use of inputs to the operation. All operations are
increasingly concerned with cutting out waste.
Cost reduction through internal effectiveness
Each of the various performance objectives has several internal effects, but all of
them affect cost. So one way to improve cost performance is to improve the
performance of the other operations objectives.
High quality operations do not waste time or effort having to re-do things, nor
are their internal customers inconvenienced by flawed service.
Fast operations reduce the level of in-process inventory between processes as
well as reducing administrative overheads.
Dependable operations do not spring any unwelcome surprises on their
internal customers. They can be relied on to deliver exactly as planned. This
eliminates wasteful disruption and allows the other processes to operate
efficiently
Flexible operations adapt to changing circumstances quickly and without
disrupting the rest of the operation. Flexible processes can also change over
between tasks quickly and without wasting time and capacity.
(See figure 2.10 + worked example, page 58-59)