Page 73 - Operations Strategy

48 CHAPTER 2 • OPERATiOns PERfORmAnCE

Figure 2.2 three levels of operations performance

Planet

Societal level – Sustain-
Operations ability
sustainability People Profit

Learning

Strategic level – Risk Capital
Operations strategic Operations
impact strategic impact

Cost Revenue

Quality
Operational level – Speed
Operations performance Dependability
objectives Flexibility
Cost

or how they serve their individual customers. Here we will look at how operations can
judge their performance at three levels:

1 The broad societal level, using the idea of the ‘triple bottom line’.
2 The strategic level of how an operation can contribute to the organisation’s overall

strategy.
3 The operational level, using the five operations ‘performance objectives’.

These three levels of operations performance are illustrated in Figure 2.2 .

Judging operations performance at a societal level?

No operation exists, or performs, in isolation. Its decisions and the way it goes about its
activities, will affect a whole variety of ‘stakeholders’. Stakeholders are the people and
groups who have a legitimate interest in the operation’s activities. Some stakeholders
are internal, for example, the operation’s employees; others are external, for example,
customers, society or community groups and a company’s shareholders. Some external
stakeholders have a direct commercial relationship with the organisation, for exam-
ple, suppliers and customers; others do not, for example, industry regulators. In not-
for-profit operations, these stakeholder groups can overlap. So, voluntary workers in
a charity may be employees, shareholders and customers all at once. However, in any
kind of organisation, it is a responsibility of the operations function to understand the

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