Metrics and Trade-Offs PDF
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Uploaded by NonViolentEnlightenment1467
Imam Abdulrahman Bin Faisal University
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Summary
This document discusses various performance metrics in operations management, including profits, costs, quality, productivity, and flexibility. It also analyzes trade-offs and the impact of environmental concerns, ethical issues, and supply chain management on business. The document also covers issues like why some organizations fail.
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Metrics and Trade-Offs Performance metrics: All managers use metrics to manage and control operations. Profits. Costs. Quality. Productivity. Flexibility. Inventories. Schedules....
Metrics and Trade-Offs Performance metrics: All managers use metrics to manage and control operations. Profits. Costs. Quality. Productivity. Flexibility. Inventories. Schedules. Forecast accuracy. Analysis of trade-offs: A trade-off is giving up one thing in return for something else. Carrying more inventory (an expense) in order to achieve a greater level of customer service. Metrics and Trade-Offs Performance metrics: All Managers Use Metrics to manage and control operations. Profits. Costs. Quality. Productivity. Flexibility. Inventories. Schedules. Forecast accuracy. Analysis of trade-offs: Atrade-offisgivingupone thing in return for something else. Carrying more inventory (an expense) in order to achieve a greater level of customer service. Environmental Concerns Sustainability: Workers’rightss in ways that do not harm ecological systems that support human existence. - Sustainability measures often go beyond traditional environmental and economic measures to include measures that incorporate social criteria in decision making. - All areas of business will be affected. Product and service design. Consumer education programs.Disaster preparation and response. Supply chain waste management. Outsourcing decisions. Ethical Issues in Operations Ethical issues that may arise in many aspects of operations management: Financial statements. Workersafety. Productsafety. Quality. Theenvironment. Thecommunity. Hiringandfiringworkers. Closingfacilities. Workers’rights. Supply Chain Issues 1. The need to improve operations. 2. Increasing levels of outsourcing. 3. Increasing transportation costs. 4. Competitive pressures.5. Increasing globalization.6. Increasing importance of e-business.7. The complexity of supply chains.8. The need to manage inventories.Why Some Organizations Fail - Neglecting operations strategy. - Failing to take advantage of strengths and opportunities and/or failing to recognize competitive threats. - Too much emphasis on short-term financial performance at the expense of R&D. - Too much emphasis on product and service design and not enough on process design and improvement. - Neglecting investments in capital and human resources. - Failing to establish good internal communications and cooperation. - Failing to consider customer wants and needs based on historical and other data. Hierarchical Planning Mission. Goals. Organizational strategies. Functional Strategies. Tactics. Operations. Effective strategy formulation requires taking into account: - Core Competencies. - Environmental scanning. SWOT: Strengths, Weaknesses, Opportunities, and Threats. Successful strategy formulation also requires taking into account: Order Qualifiers. Orderwinners. Order qualifiers: Characteristics That Customers Perceive Minimum standards of acceptability for a product or service to be considered as a potential for purchase. Order winners: Characteristics of an organization’s goods or services that cause it to be perceived as better than the competition. Environmental Scanning is necessary to identify: Internal factors. Strengths and weaknesses. External factors. Opportunities and threats Key External Factors 1. Economic conditions. 2. Political conditions. 3. Legal environment. 4. Technology. 5. Competition. 6. Customers. 7. Suppliers.8. Markets. Key Internal Factors 1. Human resources.2. Facilities and equipment. 3. Financial resources.4. Customers.5. Products and services. 6. Technology.7. Other. Areas where organizations have achieved time reductions: Planning time. Product/service design time. Processing time. Changeover time. Delivery time. Response time for complaints. . High productivity is linked to higher standards of living. As an Economy Replaces Manufacturing Jobs With Lower productivity service jobs, it is more difficult to maintain high standards of living.Higher productivity relative to the competition leads to competitive advantage in the marketplace. Pricing And Profit Effects.For an industry, high relative productivity makes it less likely it will be supplanted by foreign industry. Service sector productivity is difficult to measure and manage because. It involves intellectual activities. It has a high degree of variability. A useful measure related to productivity is process yield. Where products are involved. Ratio of output of a good product to the quantity of raw material input. Where services are involved, process yield measurement is often dependent on the particular process: Ratio of cars rented to cars available for a given day. Ratio of student acceptances to the total number of students approved for admission. . Improving Productivity 1.Don't Confuse Productivity With Efficiency Operations. 2.Determine Critical(bottleneck)operations. 3.Develop Methods For Productivity Improvements. 4.Establish Reasonable Goals For Improvements. 5.Make It Clear That Management Supports And Encourages productivity improvement. 6.Measured Publicize Improvements. 7.Don't Confuse Productivity With Efficiency.
