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Decision areasCapacitySupply NetworkMarket competitivenessProcess TechnologyResource usageDevelopmentand Organisation (Operations development and improvement)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.QualityPerformance objectives DependabilitySpeedFlexibilityCostImprovement strategyIntended marketpositionMarket strategyOperations ResourcesMarket RequirementsThe Direct, Develop, Deploy strategic improvement cycleOperations capabilitiesDEVELOP operations capabilities through learningOperations resources and processesDIRECT performance and prioritisationMarket potential DEPLOY operations contributionThe Strategic Operations Improvement CycleSetting the Direction Cycle of setting targets and attempting to meet customers real requirements that can lead more accurate interpretation of the real requirements of the market.Performance MeasurementWhat factors should be included as performance targets?Which are the most important?How should they be measured?On what basis should actual against target performance be compared?

Directing improvement is a cycle of comparing targets with performance

Performance targets can involve different levels of aggregationFive Performance Objectives

Quality : Operations quality is usually measured in terms of the environmental impact . Speed : Time. Dependability : A matter of keeping promises on delivering after the event checks and reports.Flexibility : A matter of being able to resource. Cost : The total cost of keeping and using the resources to perform the emergency.

BENCHMARKING Method for senior managers to drive organisational improvement is to establish operational benchmarks.

By highlighting how key operational elements shape up against best in class competitors, key areas for focused improvement can be identified

Used the term competitive benchmarking to describe a process used by the manufacturing function to revitalise itself by comparing the features, assemblies and components of its products with those of competitors

TYPES OF BENCHMARKING Non-competitive benchmarking is benchmarking against external organisations that do not compete directly in the same markets.

Competitive benchmarking is a comparison directly between competitors in the same, or similar, markets.

Performance benchmarking is a comparison between the levels of achieved performance in different operations. For example, an operation might compare its own performance in terms of some or all of its performance objectives quality, speed, dependability, flexibility and cost against other organisations performance in the same dimensions.

Practice benchmarkingis a comparison between an organisations operations practices, or way of doing things, and those adopted by another operation

Different standard of comparison give different messages

Different standard of comparison give different messages (continued)THE OBJECTIVES OF BENCHMARKINGIt can be seen, therefore, as one approach to setting realistic performance standards. It is also concerned with searching out new ideas and practices which might be able to be copied or adapted. The success of benchmarking, however, is due largely to more than its ability to set performance standards and enable organisations to copy one another.

DEVELOPKnowledgeControlOperations capabilitiesOperations resources and processesDeveloping operations capabilities is encouraged by a cycle of attempting to control processes that enhance process knowledge that, in turn, make control easierNigel Slack and Michael Lewis, Operations Strategy, 3rd Edition, Nigel Slack and Michael Lewis 2012Slide 7.#Process ControlLearningProcess KnowledgeProcess control starts the learning that develops process knowledgeNigel Slack and Michael Lewis, Operations Strategy, 3rd Edition, Nigel Slack and Michael Lewis 2012Slide 7.#Customer performance measuresTo achieve strategic impact how should we be viewed by customers?Financial performance measuresTo achieve strategic impact how should we be viewed by shareholders?Internal process performance measuresTo achieve strategic impact what aspects of performance should business process excel at?Learning and growth performance measuresTo achieve strategic impact how will we build capabilities over time?Overall strategic objectivesThe measures used in the balanced scorecardNigel Slack and Michael Lewis, Operations Strategy, 3rd Edition, Nigel Slack and Michael Lewis 2012Slide 7.#

The Four-Stage Model of Operations Contribution

Stage 1: Internal neutrality

The poorest level of operational contribution. The other areas of the business view operations as a barrier to opportunity. Lacking in flair and competitive drive. The operations function is inward looking and at best reactive. Its vision is to be internally neutral, a position it attempts to achieve not by anything positive but by avoiding the next big mistake

Stage 2: External neutrality

The operations function must compare itself to other companies in the outside marketplace. By implementing best practice strategies already in use they seek to catch up to their peers.

Stage 3: Internally supportive

The operations strategy is now aligned to the overall business strategy. It can internally support the objectives of the business and considers itself to be one of the best in class. It aspires to be number one in its field and the effort to be number one is likely to yield its own rewards.

Stage 4: Externally supportive

An operation at stage four is unambiguously the best at what they do. Their creativity and proactive attitude has put them ahead of the others and are easily able to out compete their competition when following the same rules. The operations is now interested in changing these rules and redefining the expectations for the whole industry.

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