Chapter 2: Operations Performance

Operations performance: Operations are judged on the way they perform by

stakeholders.
Operations Management: Is a break or break activity and can significantly affect
firms profitability.
Performance objectives: A generic set of objectives used to judge the performance
or any type of operation.

Operations in Practice
Operations performance is vital for any organisation.
Example: BA Terminal 5 did overpromised and under delivered unlike T3 in Dubai.
They continuously tested rolling out flights bit by bit. This public shame did not only
harm BA financially, but was catastrophic for its long standing reputation.

By reducing operating costs and improving customer service can equal and even
exceed the benefits that derive from improving sales volume.
Stakeholder groups with a legitimate interest in the operations activities

Internal
Employees

stakeholders:
the community

stakeholders:

External
Customers, society of

External stakeholders with direct contact: Suppliers and customers

External stakeholders with non-direct contact: Industry regulators
It is important for any organisation to understand the objective of its stakeholders
and set its objectives accordingly.
The dilemma with using a wide range of stakeholders may be the conflicting
pressures of maximising profitability on one hand and the interested of the society or
community in line with transparency and accountability on the other hand.

Operations can contribute to competitiveness through low costs, high levels

of service (securing revenue), lower operational risk, lower capital
requirements, and providing the capabilities that determine future innovation.

The Five Operations

These objectives apply to all

1.
things right, making
and services which
gives a quality
2. Speed
3. Dependability
4.
5. Cost

Performance Objectives
types of operations.

Quality: Doing
no mistakes with goods
are fit for purpose. This
advantage.

Flexibility