Page 91 - Operations Strategy

66 CHAPTER 2 • OPERATiOns PERfORmAnCE
of supply and cost regarded as order-winners. Thus, the basis of competition was rela-
tively clear. Then, one or two companies started to offer a much more comprehensive
service that included, in effect, taking over the whole supply responsibility for indi-
vidual customers. A hospital could not just buy products from a company; it could
hand over total responsibility for forecasting demand, purchasing, delivery and stor-
age of its supplies. This was a ‘delight’ to the hospitals that were able to effectively
outsource the supply of these items, enabling them to concentrate on their core task
of curing and caring for the sick.
The benefits from order-winners and qualifiers
The distinction between qualifiers, order-winners and delights does illustrate the
important point that competitive factors differ – not only in their relative importance,
but also in their nature. This is best thought of as how the competitive benefit (which
is derived from a competitive factor) varies with how well an operation performs in
delivering that competitive benefit. In other words, it is an indication of the benefits
an operation gains by being good at different aspects of performance. Figure 2.7 shows
the benefits from qualifiers, order-winners and delights as performance levels vary. No
matter how well an organisation performs at its qualifiers, it is not going to achieve
high levels of competitive benefits. The best that it can usually hope for is neutrality.
After all, customers expect these things, and are not going to applaud too loudly when
they receive them. They are the givens. However, if the organisation does not achieve
satisfactory performance with its qualifiers, it is likely to result in considerable dissatis-
faction amongst customers – what in Figure 2.7 is termed as ‘negative competitive ben-
efit’. In effect, there is a discontinuity in the benefit function. This is different from an
order-winner, which can achieve negative or positive competitive benefit, depending
on performance, and whose benefit function is far more linear. The advantage of order-
winners (and why they are called order-winners) is that high levels of performance can
provide positive competitive benefit, and hence more orders.
The benefits to be derived from ‘delights’ are also shown in Figure 2.7. The absence
of delights (i.e. very low achieved performance) will not upset customers because they
didn’t expect them anyway. However, as the operation starts to perform successfully
in terms of its ‘delights’, the potential for customer satisfaction and therefore positive
competitive benefit could be very significant. Note that for something to be classed as a
‘delight’ it must be both novel (and therefore unexpected) and genuinely add value for
customers. The idea is that the combination of added value together with their unex-
pected nature will make delights, when delivered effectively, particularly attractive. But
because they are unexpected, the competitive benefit will not become negative for the
very reason that customers are not aware of the delights.
Two points should be made about ‘delights’. The first is that the curves in Figure 2.7
are conceptual; they are there to illustrate an idea rather than to be drawn with any
degree of precision. (Nevertheless, the theory of delights is closely associated with what
some people know as the ‘Kano model’, which product designers can use in a more
quantitative manner.) The other point to make is that delights apply only at one point
in time. By definition, because delights rely on their novelty, when offered in the mar-
ket they will no longer be novel. This means that competitors can attempt to imitate
them. So, in the example of the health care companies discussed previously, when they
introduced their enhanced service it provided considerable competitive advantage for
the few companies that could satisfactorily deliver the service. Since that time many
more companies have introduced similar services. Therefore, what was once a delight

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