Page 81 - Operations Strategy

56 CHAPTER 2 • OPERATiOns PERfORmAnCE

Judging operations performance at an operational level?

Assessing performance at a societal level through the idea of the triple bottom line,
and judging how well an operation is contributing to its general strategic objectives, is
clearly important, particularly in the longer term. Both these levels form the backdrop
to all operations decision making. But running operations at an operational day-to-
day level requires a more tightly defined set of objectives. These are called operations
‘performance objectives’. Do not be tempted to dismiss these objectives as being of
no concern at a strategic level. Remember that the ‘bottom-up’ perspective on opera-
tions strategy stresses the importance of ‘operational’ level performance contributing
to strategic objectives.

the five generic performance objectives
There are five generic ‘performance objectives’ that were briefly introduced in Chapter 1.
It is worth examining each of them in a little more detail, not to present any precise
definitions but rather to illustrate how the terms quality, speed, dependability, flexibil-
ity and cost may be used to mean slightly different things depending on how they are
interpreted in different operations. This is not to imply that broad stakeholder objec-
tives are irrelevant to operations strategy, far from it. But the five generic performance
objectives have meaning for all types of operation and relate specifically to operations’
basic task of satisfying customer requirements.
Quality
Many definitions of quality refer to the ‘specification’ of a product or service, usually
meaning high specification – as in ‘the Mercedes-Benz S Class is at the quality end of the
market’. Quality can also mean appropriate specification, meaning that the products
and services are ‘fit for purpose’; they do what they are supposed to do. ‘Fit-for-purpose’
quality includes two concepts that are far more useful when treated separately. One is
the level of the product or services specification; the other is whether the operation
achieves conformance to that specification.
Specification quality is also a multidimensional issue. We needed to use several
aspects of specification in the automobile example above, even to reach a crude indica-
tion of what type of car is being produced. So any product or service needs to use several
dimensions of specification to define its nature. These dimensions can be separated into
‘hard’ and ‘soft’ aspects of specification quality. Hard dimensions are those concerned
with the evident and largely objective aspects of the product or service. Soft dimen-
sions are associated with aspects of personal interaction between customers and the
product or (more usually) service. Table 2.2 identifies some hard and soft dimensions
of specification quality, though each list will change depending on the type of product
or service being considered.
Conformance quality is more a concern of the operation itself. It refers to the opera-
tion’s ability to produce goods and services to their defined specification reliably and
consistently. This is not always a simple matter of yes it can, or no it cannot. Rather, the
issue is often a matter of how closely the operation can achieve the product or service
specification consistently. Here there is a difference between hard and soft dimensions
of specification. Generally the conformance to soft dimensions of quality is more dif-
ficult to measure and more difficult to achieve. This is largely because soft dimensions,

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