Five Performance Objectives3
Implement and Support Process5
“Operation strategy concerns the pattern of strategic decisions and actions which set the role, objectives and activities of the operation.” It refers to the process to set mission and goals, make specific decisions for achieve specific objectives; and the procedure to design and formulate the strategy of operations. Operation strategy is one part of the organizational business strategy but it plays an important role in all functional areas of business. Operation strategy is to implement the strategy of whole business, support the business strategy and drive business strategy. In fact, the importance of operations strategy has drawn much attention from companies and it is even viewed as the one which is able to either “make or break” any business.(P34, Operations management). This is because comprehensive operation function and operations management has significant influence on profitability of firms through many ways.
Five Performance Objectives
As operation managers, there are many objectives they aim to achieve to satisfy the expectations of shareholders. For example,costs, risk and investment are expected to reduced while revenue and innovation are expected to increase. These general objectives provide a framework to form a strategy, however, operations runs on base of day-to-day level and detailed definition of objectives are required. Five basic performance objectives are set and applied to all types of operations in any kind of industries. They are quality objective, speed objective, dependability objective, flexibility objective as well as cost objective. Organization’s strategy is intangible and customers can only feel it through the behaviors in operational practices. Five objectives are primary for companies to design the strategy of companies and then put it into operational practices strategically. In the first place, the five objectives provide the different mission which companies can focus on. Secondly, the operation objective can be used as competitive weapons through excelling in any performance objective.
Quality objective is generally regraded as the particularly important objective and also the most visible part for customers. The major influence of quality is the extent of customer satisfaction or dissatisfaction. Inside the organization, good quality reduces costs and increases dependability, which support the stable and efficient process. Knowing the customer expectation estimated by marketing research, policies and procedure should be established in operation process to identify and achieve that quality.
Speed objective means reducing the time between the request from customers and products or services received by customers. Shortening the delivery time cannot only bring greater benefit to external customers but also help quick movement of materials and information within the operation. There are other benefits, including reducing inventories and risks of inaccurate forecasting demand.
Dependability objective refers to delivery goods or services correctly and in time. High dependability inside of companies are more effective because it can save time and money. Failure of dependability in supply will result in wasted time coping with the disruption in the operation. Ineffective use of time will cost more in delivering and maintaining of operation. Therefore, dependability should be emphasized in order to save time and money.
The flexibility objective indicates that operations are able to change in some way, which includes the specific task, time or the methord to complement operations. Requirements from customers may be the product or service flexibility, mix flexibility, volume flexibility or delivery flexibility. Flexibility allows firms to differentiate its products or services offering to different customers, which is known as mass...