1. Operations Performance Analysis
SLACK 2
Operations Performance Analysis

2. Learning Objectives
The “Triple Bottom Line” approach to measuring Operation Performance
The five operation performance objectives

3. The Triple Bottom Line

4. Operations Performance Objectives
GOAL: Satisfy customers and contribute to competitiveness
Quality
Speed
Dependability
Flexibility
Cost

5. Internal and external effects of Performance Objectives

6. Quality
Quality reduces costs
Quality increases dependability

7. Speed
Speed means the elapsed time between customers requesting products or services and them receiving them
Speed reduces inventory
Speed reduces risk

8. Dependability
Dependability can give the potential for more reliable delivery of services and products and save costs.
Dependability saves time
Dependability saves money
Dependability provides stability

9. Flexibility
Flexibility means being able to change the operation in some way. This may mean changing what the operation does, how it is doing it, or when it is doing it. Specifically, customers will need the operation to change so that it can provide four types of requirement:
product/service flexibility – the operation’s ability to introduce new or modified products and services;
mix flexibility – the operation’s ability to produce a wide range or mix of products and services;
volume flexibility – the operation’s ability to change its level of output or activity to produce different quantities or volumes of products and services over time;
delivery flexibility – the operation’s ability to change the timing of the delivery of its services or products.

10. Flexibility Mass Customization Agility
Some companies have developed their flexibility in such a way that products and services are customized for each individual customer. Yet they manage to produce them in a high-volume, mass-production manner which keeps costs down.
Example: Dell Build to Order computers
Agility
Agility is really a combination of all the five performance objectives, but particularly flexibility and speed.
Responding to market requirements by producing new and existing products and services fast and flexibly

11. Cost Low cost is a universally attractive objective
Cost is always an important objective for operations management, even if the organization does not compete directly on price.
Operation influences costs on –
Labor
Facilities
Technology and Equipment
Material

12. Trade-offs between Performance Objectives

13. Quality

14. Speed

15. Dependability

16. Flexibility

17. Next session: Quiz # 1: Stevenson Chapters 1 and 2, and Slack Chapter 2
Final Group rosters with Project Manager due