Operations & Supply chain recap

1. Competitive priorities (performance objectives):

Consistent
conformance to - Quality reduces costs – the fewer mistakes made by each
customer’s process in the operation, the less time will be needed to
Quality expectations, in correct the mistakes and the less confusion and irritation will
other words ‘doing be spread.
things right.’
- Quality also increases dependability

the elapsed time

between customer - Speed reduces inventories – the longer items take to move
requesting through a process, the more time they will be waiting, and
Speed products or the higher inventory will be.
services and
receiving them. - Speed reduces risks – the further ahead companies forecast,
the more likely they are to get it wrong.

being able to change the Mass customization = products and services are
operation in some way. customized. Yet they manage to produce them in high
volume.
Four types of requirement: Agility = responding to market requirements by producing
Flexibility Product/service new and existing products and services fast and flexibly.
flexibility
Mix flexibility - Flexibility speeds up response.
Volume flexibility - Flexibility saves time.
Delivery flexibility - Flexibility maintains dependability.

means doing thing

in time for - Dependability saves time.
customers to - Dependability saves money – ineffective use of time will
receive products or translate into extra cost.
Dependability services exactly - Dependability gives stability – the disruption caused to
when they are operations by a lack of dependability goes beyond time and
needed, or at least cost. (trust, quality, etc.)
when they were
promised.

- Improving productivity – reducing the cost of inputs while maintaining the level of
its outputs. Productivity can also be improved by making better use of the inputs to
the operation.
- Cost reduction through internal effectiveness. Improve performance of the other
operations objectives:
Costs -high-quality operations do not waste time or effort having to redo things
-fast operations reduce the level of in-process inventory between micro operations,
as well as reducing administrative overheads.
-dependable operation do not spring any unwelcome surprises on their internal
customers.
-flexible operations adapt to changing circumstances quickly and without disrupting
the rest of the operation.
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Productivity =output ¿ the operation input ¿ the operation ¿

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Single-factor productivity =output ¿ the operation one input ¿ theoperation ¿

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Multi-factor productivity =output ¿ the operation all inputs ¿ the operation ¿

2. Three levels of operations performance:

1. Societal level – operations sustainability (people, planet, profit> 3BL approach)

2. Strategic level – operations strategic impact
3. Operational level – operations performance objectives

Performance measures at three levels

Societal level
- Social (people, e.g. employee satisfaction)
- Economic (profit, e.g. share price)
- Environmental (planet, e.g. packaging waste)

Strategic level
- Risk and resilience (e.g. service interruptions)
- Capital utilization (e.g. return on assets)
- Service and revenue + efficiency and cost (e.g. profitability)
- Capability for innovation (e.g. revenue from new offerings)

Operational level
- Quality (e.g. customer complaints)
- Speed (e.g. order lead time)
- Dependability (e.g. mean time between failures)
- Flexibility (e.g. time to market)
- Cost (e.g. transaction costs)