MNO 2601 Production & Operations
Management
Chapter 2
Performance objectives of production/operations management
Operations performance objectives
All operations have a range of stakeholders. Stakeholders are the people and groups who may be
influenced by, or may influence, the operations activities.
Some stakeholders are:
Internal – operations employees
External – customers, society, community groups
The five performance objectives
Apply to all types of operations
Quality – satisfying customers by providing error free goods and services
Speed – do things fast
Dependability – do things on time and keep the delivery promise
Flexibility – change far enough and fast enough to meet customer requirements
The quality objective
Quality is consistent conformance to customers’ expectations. Doing things right.
The things which the operation needs to do right will vary according to the kind of operation. Quality is
the most visible part of what an operation does and something the customer finds easy to judge about
the operation.
Quality is a major influence on customer satisfaction or dissatisfaction
Quality inside the operation
Satisfying internal customers can be as important as satisfying external customers.
Quality reduces costs – the fewer mistakes, the less time needed to correct them. Less confusion and
irritation
Quality increases dependability – the performance objectives of quality has both an external impact
which influences customer satisfaction and an internal impact which leads to stable and efficient
processes.
The speed objective
Speed means the elapsed time between customers requesting products and services and the receipt of
them.
The main benefit of speedy delivery of goods and services lies in the way it enhances the operations
offering to the customer. The faster customers can have the product or service, the more likely they are
to buy it or the more they will pay for it or the greater the benefit they receive.
Speed increases value for some customers
1
Management
Chapter 2
Performance objectives of production/operations management
Operations performance objectives
All operations have a range of stakeholders. Stakeholders are the people and groups who may be
influenced by, or may influence, the operations activities.
Some stakeholders are:
Internal – operations employees
External – customers, society, community groups
The five performance objectives
Apply to all types of operations
Quality – satisfying customers by providing error free goods and services
Speed – do things fast
Dependability – do things on time and keep the delivery promise
Flexibility – change far enough and fast enough to meet customer requirements
The quality objective
Quality is consistent conformance to customers’ expectations. Doing things right.
The things which the operation needs to do right will vary according to the kind of operation. Quality is
the most visible part of what an operation does and something the customer finds easy to judge about
the operation.
Quality is a major influence on customer satisfaction or dissatisfaction
Quality inside the operation
Satisfying internal customers can be as important as satisfying external customers.
Quality reduces costs – the fewer mistakes, the less time needed to correct them. Less confusion and
irritation
Quality increases dependability – the performance objectives of quality has both an external impact
which influences customer satisfaction and an internal impact which leads to stable and efficient
processes.
The speed objective
Speed means the elapsed time between customers requesting products and services and the receipt of
them.
The main benefit of speedy delivery of goods and services lies in the way it enhances the operations
offering to the customer. The faster customers can have the product or service, the more likely they are
to buy it or the more they will pay for it or the greater the benefit they receive.
Speed increases value for some customers
1
