Four Performance Dimensions
FOUR PERFORMANCE DIMENSIONS
Operations and supply chains can have an enormous impact on business performance. Experience suggests that four generic performance dimensions are particularly relevant to operations and supply chain activities. These are;
• Quality. Quality is defined as the characteristics of a product or service that bear on its ability to satisfy stated or implied needs. The concept of quality is broad, with a number of sub dimensions, including performance quality (What are the basic operating characteristics of the product or service?), conformance quality (Was the product made or the service performed to specifications?), and reliability quality (Will a product work for a long time without failing or requiring maintenance? Does a service operation perform its tasks consistently over time?).
• Time. Time has two basic characteristics: speed and reliability. Delivery speed generally refers to how quickly the operations or supply chain function can fulfill a need, once it has been identified. Delivery reliability refers to the ability to deliver products or services when promised. Note that a firm can have long lead times, yet still maintain a high degree of delivery reliability. Typical measures of delivery reliability include the percentage of orders that are delivered by the promised time and the average tardiness of late orders. Delivery reliability is especially important to companies that are linked together in a supply chain. Consider the relationship between a fish wholesaler and its major customer, a fish processing facility. If the fish arrive too late, the processing facility may be forced to shut down. On the other hand, fish that arrive too early may go badly before they can be processed. Obviously, these two supply chain partners must coordinate their efforts so that the fish will arrive within a specific delivery window, which is defined as the acceptable time range in which deliveries can be made.
• Flexibility. Many
Operations and supply chains can have an enormous impact on business performance. Experience suggests that four generic performance dimensions are particularly relevant to operations and supply chain activities. These are;
• Quality. Quality is defined as the characteristics of a product or service that bear on its ability to satisfy stated or implied needs. The concept of quality is broad, with a number of sub dimensions, including performance quality (What are the basic operating characteristics of the product or service?), conformance quality (Was the product made or the service performed to specifications?), and reliability quality (Will a product work for a long time without failing or requiring maintenance? Does a service operation perform its tasks consistently over time?).
• Time. Time has two basic characteristics: speed and reliability. Delivery speed generally refers to how quickly the operations or supply chain function can fulfill a need, once it has been identified. Delivery reliability refers to the ability to deliver products or services when promised. Note that a firm can have long lead times, yet still maintain a high degree of delivery reliability. Typical measures of delivery reliability include the percentage of orders that are delivered by the promised time and the average tardiness of late orders. Delivery reliability is especially important to companies that are linked together in a supply chain. Consider the relationship between a fish wholesaler and its major customer, a fish processing facility. If the fish arrive too late, the processing facility may be forced to shut down. On the other hand, fish that arrive too early may go badly before they can be processed. Obviously, these two supply chain partners must coordinate their efforts so that the fish will arrive within a specific delivery window, which is defined as the acceptable time range in which deliveries can be made.
• Flexibility. Many