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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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