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Quality
Speed Dependability Flexibility Cost Supply network Process technology
Issues include, Big radical improvement projects or small continuous improvements. Performance measurement used for setting the direction of improvement. Benchmarking against other operators. Prioritising improvements. Learning and enhancing process knowledge through control. Expectations on, and contributions from, the operations function.
Performance objectives
Capacity
Decision areas
Issues covered
Market competitiveness
Operations resources
Operations capabilities DEPLOY operations contribution
Market requirements
Market potential
Market strategy
Operations resources
The operations capabilities and performance DEPLOY operations contribution by exploiting superior capabilities
Market requirements
Potential competitive position in the market place
MARKET STRATEGY
DIRECT performance
Fit means that the operations resources and processes are aligned with the requirements of its markets.
Market requirements
DIRECT
Targets
Functional strategic measures, e.g. Composite performance measures, e.g. Generic operations performance measures, e.g. Detailed performance measures, e.g.
Market strategic objectives Customer Satisfaction Dependability Mean time between failures Lateness complaints
Quality
= 95% = 83%
40
X X
1
2 3 E EXCESS? APPROPRIATE
4
5 6 IMPROVE D
A 7 8 URGENT ACTION 9 8 7 6 5 4 3 2 1
BAD
C
LOW
HIGH
GOOD
Delivery
Drop quote
Xquality X X
Order/dispatch X quality
Xlead-time
3 2
1
Enquiry
BAD
LOW
HIGH
Quality Quality + dependability Quality + dependability + speed Quality + dependability + speed + flexibility Quality + dependability + speed + flexibility + cost The sand cone model of improvement; cost reduction relies on a cumulative foundation of improvement in the other performance objectives
Key Indicators
All staff are able to explain the operations strategic objectives
Individuals and groups use the strategic objectives to focus improvement activity
All proposed changes are assessed against strategic objectives
Operations capabilities
Knowledge
DEVELOP
Developing operations capabilities is encouraged by a cycle of attempting to control processes which enhances process knowledge which, in turn, makes control easier
Control
Systematic learning
You cant learn about a process when its out of control. If things are in control you notice changes you can investigate them
Learning
Knowledge is power
Stage
1 2 3 4 5 6 7 8
Term
Knowledge
None
Complete ignorance Awareness Measurement Control of mean Process capability Process characterisation Know why Complete knowledge
Full
DEVELOP
Control
Enhanced quality
Customer loyalty
Lower costs
Process control may be one of the most operational of tasks, but it can bring strategic benefit
Key Indicators Learning is made explicit, What have you learned at work today? Process knowledge is seen as a key operations objective Individuals and groups share their learning Individuals seek out opportunities to learn actively and experiment Learning is captured and debated Designated individuals are responsible for learning from other operations
Building on learning
In everyday life we all switch roles How we see our role shapes how we behave and interact with others So critical to success operations strategy is changing how operations management see themselves and are seen by others The key issues is What should we expect from operations management?
Deploying operations capabilities to create market potential means ensuring that the operations function is expected to contribute to market positioning
Contribution Operations capabilities DEPLOY Expectations
Market potential
Clearly the best in the industry As good as competitors Holding the organisation back STAGE 1 Correct the worst problems Internally neutral STAGE 2 Adopt best practice
Externally neutral
Internally supportive
Externally supportive
Customer performance measures To achieve strategic impact, how should we be viewed by customers?
Learning and growth performance measures To achieve strategic impact, how will we build capabilities over time?
10
1
10,000 100,000 1,000,000 10,000,000
100,000,00 0
Cumulative volume of vouchers processed Log-log experience curve for a voucher processing centre