Table of Contents
Performance Objectives
Slack et al. identify five generic performance objectives for any organisation
- quality
- speed
- dependability
- flexibility
- cost
Quality
Quality is about consistent performance, this could be meeting a product specification or about providing a superior service/product compared to competitors.
Externally, quality increases customer satisfaction.
Internally, quality reduces costs and increases dependability.
Speed
Speed is about minimising the time lag between the customer ordering and receiving a product or service.
Externally, speed improves customer service and potentially enhances value to the customer.
Internally, speed can reduce stock holdings and also risks associated with holding too much work in progress.
Dependability
Dependability is about delivering to target. Does the operation meet the expectations the customer has about when they will receive their goods or services?
Externally, dependability improves customer service, or at least avoids complaints.
Internally, dependability reduces costs by solving reliability problems and makes for a stable operation.
Flexibility
Flexibility is about how much you can change the product/service or the timing of when it is delivered.
Externally, being flexible allows an operation to
- add new products/services frequently (product/service flexibility)
- offer a wide range of products and services (mix flexibility)
- deliver different volumes (volume flexibility)
- deliver at different times (delivery flexibility)
Internally, flexibility can speed up response times, save time wasted in changeovers and maintain dependability.
Cost
Cost is about being able to reduce the unit cost.
Externally, low costs allow reduced prices for higher volumes or increase profitability.
Internally, cost performance comes from good performance in the other objectives.
