Introduction to Operations Management - I

Prof. B Mahadevan
Order Qualifiers and Order Winners

So, first we saw what a customer wants. Then we say how a firm performance vis-a-vis their competition. Now
there is a third dimension which will also help us identify the priority which is what’s happening in the market
and the society, in general.

So, there are a few emerging challenges and concerns which firms must be aware of. First of them is growing
customer expectations. Because customers tend to demand more and more, they refine their expectations,
they want more variety, therefore, manufacturing and service organisations must learn to respond to these
expectations, you know, develop capabilities all that. So, we need some performance metrics which emphasize
these. Today's businesses are also constantly challenged by the rapid technological advances. Technology is
playing, you know, core internet banking solutions, ATM's, procurements of goods and services, new product
development are all porting onto a technology platform. So, how do we build those capabilities and what
metrics help us see where we are going. And the third most important is environmental concerns. There is a
growing international pressure on disposal of waste, reuse of components, sustainable ways of operations. I
think all these are very important. Firms must be able to honour these requirements. So, this brings the third
dimension in terms of how do we identify our priorities. So, essentially how do we make them prioritize these
performance metrics? We must be able to relate operations system to the customer and the market. And in
relation to that, we should be able to acquire capabilities, to tolerate product proliferation, we should be able
to develop systems and procedures that promote learning. We should have green practices in both
manufacturing and services. So, all these will point to a set of measures which are important for us.

Essentially, our journey to prioritize will have three major dimensions. We must get to know what the
customers want. We must be able to analyse our offerings vis-a-vis the market and we must be able to
understand the emerging trend in businesses and society. So, we will bring all the three perspectives into our
search for those measures which are important. And once we go on this journey, what might happen is we will
develop two sets of matrices. So, one we might possibly call it as order qualifying attributes because these are
basic measures of performance which the customer expect in the product or service that they are buying. Just
to take an example, if you are talking of a restaurant, a very tasty food, a clean work environment, a very
pleasing place, a good appearance of the service delivery system may be an order qualifying attribute. These
are required for the customers to shortlist a firm in his or her choice of making a purchase decision eventually.

Then comes what clinches the deal. So, those performance metrics which help the customers to finally make a
choice, or for the firm to clinch the deal are called order winning attributes. So, based on our earlier three
dimensions, every organisation must be able to, for example, if you are playing a role in that, you must be able
to identify a set of attributes which you may call is as order qualifier and a set of attributes which you may call
it as order winning and link all these to performance metrics. Deploy operational choices, capacity decisions
and so on and monitor them and measure them continuously. I think that way we would be in a position to not
only identify what kind of an operation system we are in? What kind of expectations are there but also to put
performance measures, monitor it and make sure that we are able to achieve what we want to achieve so that
the business gets competitive.

I think that's the importance of performance metrics at every organisation would have to think about. So, I
would like you to reflect on these ideas in a certain detail. Pertaining to your work situation, you will get
greater clarity on how do we go about with this job of identifying prioritizing performance metrics.

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Introductions to Operations Management-1 delivered in the online course format by IIM Bangalore. No part of this document, including
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