Operations manager performance objectives
Operations department is the backbone of in all manufacturing or service industry’s success. The department focusses on learning the market trend and strategizing on fulfilling the customer’s desires as well as the company’s goals and objectives. Mostly, the department requires procedures for developing an operation strategy that will analyze the market requirements (marketing) and the operations resource capabilities (operations). The term performance to an operations manager refers to the level of achievement. To them, the job is characterized by performance objectives. These performance objects are speed, flexibility, quality, dependability, and cost. Depending on the company’s clientele and its goals, the organization decides which order of the performance objectives it follows. This paper discusses Mercedes-Benz as a manufacturing company and DHL as a service provider in relation to the five performance objectives.
Objectives
1. If a company can survive by only focusing on one performance objective
2. Show how performance objectives work intertwiningly.
Theoretical framework
As an Operations Manager, all five-performance objectives are important in the department and the quest of company goal fulfillment.
Subsections based on that research question or objectives
The five operations performance objectives underpin most of the work by performance measurement undertaken by the Operations department in an organization. According to Neely, there are several points to be noted about the performance objectives namely,
1. They are multidimensional
2. They trade-off with one another
3. There are internal as well as external reasons that an organization would wish to excel in.
Mercedes-Benz experienced a problem with their car battery alternators and the brakes incorporated into several models of the manufacturer since 2001. The problem became obvious to the public that the company was forced to make a product recall thereby, tainting their performance objective picture in a negative way. In reaction, the company embarked on making a better braking system by introducing an electronic gadget to their S-class car range.
The measurement of operations performance: Quality
According to Neely, Quality is more than conformance to specification, meaning how well a product or service performs its intended or required function. Depending on the organization, quality might also be seen as the durability of something or product, meaning, the easiness to service and dependability to of the product is a customer plays a role here. Conducting services in the best way possible or manufacturing products of high standards is a mark of quality to any organization (selecting knowledge).
Mercedes-Benz as a car manufacturing company sells their vehicles on the Quality mark. To them, Quality is number one most important tool that they offer and guarantee their customers. They solidify this with their claim of being a car manufacturing company that makes high-performance vehicles. Further, they state that the company is built under the pillar of quality. In terms of multidimensional in the performance objective, Mercedes-Benz uses quality to indicate performance, features, reliability, technical durability, as well as value for a client’s money. However, what most customers do not know is that the high quality the company brags about leads to a higher cost in maintenance and pricing.
DHL brags about making impromptu inspection on the quality of their service delivery to their customers. The service providing company shows that to them, quality means conformance with which the courier company serves their customers. DHL in their quest to deliver quality focuses on a number of things that they guarantee their customers worldwide. These attributes include shipments or package delivery with no damage, adequate transportation abilities, and infrastructure. DHL also indicates that it is responsive and willing to communicate with their customers.
Regardless of the products or services specification quality, the exercise has both external and internal benefits to the organization as well as to their customers. Eternally, Quality ensures that the product satisfies the customer. Internally, it reduces or and prevents wasted time, efforts, error rate, internal unreliability as well as slowing down the throughput speed, therefore, saving money for the company.
Speed
Depending on the organization and what it sells or offers the business the term speed can refer to many things. Some companies connect speed with the fastness of selling their products and services while others use it to mean the time they use to introduce a new product in the market. Ultimately, speed is seen as the time between the begging of an operations process and its end. It also perceived as the time between the customer requesting a service and receiving them. Therefore, the more a product is easily available, the more it is bought.
At Mercedes-Benz, speed refers to the time when the customer requests a car to the time it is delivered to them. They also use this operations objective as a selling point. Most car enthusiasts want a car that can reach a top speed in the shortest time possible, therefore, Mercedes with the use of formula one and the McLaren, sell speed to their customers.
Internally to every organization, speed provides a fast throughput of its products and services while externally, the organization guarantees quick delivery and timely delivery of their goods and services to their customers. The Tradeoff of speed show that the faster the product reaches the market, or the timely delivering of services to customers leads to dependability. Therefore, reducing the cost due to decreasing in necessity to manage the transformed resources through operational process.
Dependability
For most companies, this performance objective means schedule adherence, performance delivery and pricing, and their ability to keep promises to their customers. To such organizations, dependability saves time, money, and gives stability. Disruption of the different operations in the company affects the quality of the operation time. Therefore, dependability creates trust and delivery to both the several sectors of the firm as well as to their clientele. All companies measure dependability with the product’s ability to perform its functions to standard as promised by the manufacturers. They also measure it in random surveys that seek to find customer satisfaction in the company’s product in the market.
Mercedes-Benz looks at dependability and assures it to their customers by stating that they guarantee performance delivery of their motor vehicles to their customers. They specifically focus on this performance objective as a selling point and as a guarantee of excellence of their product to their clients. Mercedes shows reliability of their products to their customers by stressing on “the best or nothing”. After the issue that led to the recall in 2005, Mercedes has made improvements to a number of things such as navigator, and a trip computer to their cars.
Dependability to DHL on the other hand, means reliable and visible package delivery schedules, timely security inspections, and sufficient and well-suited ICT systems to track all packages. DHL perceives dependability as equally important as speed in their service delivery. Therefore, dependability is a selling point to DHL. In 2010, DHL announced a fleet of new fuel-efficient trucks that were to be used in their business.
Dependability just as the other performance objective has its trade-offs with the others. For example, the dependability of the operations in an organization the creates speedy and timely delivery of services as well as products. It also has both internal as well as external benefits to the organization and its targets (customers). Internally, dependability creates reliability in all operations of the organization while externally it creates dependable delivery and quality for money from the customers.
Flexibility
Most companies differ in this performance objective. Some companies look at flexibility from; the material quality, output quality as well as volume, angle while to others the viewpoint changes to deliverability, resource mix, modified product as well as and new product release. Therefore, the type of business the company is dealing with dictates the viewpoint. Flexibility requires a company to have the capacity to produce goods of different quality and designs. The performance objective also requires companies to be in a position to handle new challenges and markets of different products.
At Mercedes-Benz, looks at flexibility in the material quality, as well as output quality. In recent years, Mercedes-Benz in their website has created a portal that an individual can create his car with an individual’s specification desires. The manufacturing company added AMG to their franchise that was established by the company’s strategic move to buy Daimler Chrysler in 1998. This franchise is to boost its market in the luxury car department and increase the flexibility to their clients as to what the company makes.
DHL, on the other hand, perceives flexibility in terms of their capacity to function with entrance times, vehicle size, transport mode, and supply chains with particular operation requests. The size of the package and the location to deliver the package is what dictates their mode of transportation. For example, a consignment that has to be delivered to Nakuru, Kenya from New York will have to be transported by plane then by road. The company views its ability to use different modes of transportation, rate of adaptability, variety of delivery location, and meeting all customer needs as flexibility. To accommodate change and flexibility, DHL in 2010 announced their GOGREEN plan and results.
All companies, however, agree that flexibility is the ability of an organization to change in its normal operations, which might be in terms of product and services, delivery, volume or mix flexibility. Most of the time, flexibility quickens up answer, saves time, and helps maintain dependability in the organization. Companies should be in a position to use the mass customization that involves the manufacturing of high range products in mass manners thus reducing the costs. Like all the performance objectives, flexibility has its internal and external benefits to any company. Externally, flexibility creates frequency in new products that in turn creates a maximum choice while at the internal level; the performance objective creates the ability to change.
Cost
Otherwise perceived as low cost by many companies, cost is one major operations objective, particularly when competitor companies make low pricing their selling ground. The name also signifies a difference in the product price due to volume changes of products and the range of goods produced (authors of operation management). The department assesses if the company can reduce the prices of commodities and services so as to match their competitors and at the same time make profits. For example, McDonalds might lower their prices on their food if an individual buys a sandwich, French fries, and beverage all at ones. Costs multidimensional nature stands on pricing that deal with manufacturing, profit, service running as well as value added. However, the activities used to make the service or product's success and not the product is what determines the cost.
Mercedes-Benz was for ages known to produce high-end market products. However, that changed in recent times when the company decided to produce cars that target the low-income earners. In their report, Mercedes indicated that it focuses on the 6P’s of marketing (product, price, promotion, place, people, and process). The 6P's aids them in their effort to turn the market and make the company the leading car-selling brand. To revise the pricing of their products, Mercedes Benz moved manufacturing plant to Asia, thus reducing the production and distribution costs.
DHL, on the other hand, also takes the cost issue very seriously. With that, they try to reduce the price of transportation in that the services are delivered within the expected cost. Further, they indicated that they had reduced the price by showing that customs and transport services are delivered with no hidden costs and undocumented payments.
Cost in organizations is done by reducing the price of resources inputs by cutting down on waste. For example, allowing an increase in productivity. Mostly, cost of production is often influenced by the 4V’s namely: volume, variety, variations, and visibility. Whenever the cost of commodities and services is handled appropriately, by introducing high-quality goods, high-speed delivery, high customer dependability, and high flexibility to change have the ability to reduce the price of a commodity. The internal benefit of cost is the minimum cost with a maximum value while its external benefits are minimum price for high valued products.
Conclusion
For effective transformation and goal attainment of companies, it is important to make use of all the five performance objectives than focusing only on one. Polar representation of companies indicates the relevance of the five performance objectives. All the five objects are linked to one another in every aspect thus creating a tradeoff effect. Therefore, the success of the department and the company in general, is reliant on how smoothly each of these objectives runs. In tradeoffs, improving one performance objective directly improves and opens channels to enhance the efficiency of another. Secondly, tradeoffs help the company to reposition itself, thus increases the productivity rate and profit in the organizations.
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