Strategic Performance Objectives of Operations Management

Operations management helps to make sure that quality products and services are produced in the right quantity at minimum cost with a minimum lead time. This involves planning, organising and controlling the processes needed to create products and services. It also involves defining the activities, responsibilities and decisions of operations managers.

Operations management has five performance objectives:

1. Quality: This means consistently producing products and services to specification, which leads to customer satisfaction and makes life easier inside your organisation. In a hospital, achieving quality consistently will mean that:

Patients will receive the most appropriate treatment
Treatment is carried out in the correct manner
Patients are consulted and kept informed
Staff are courteous, friendly and helpful

2. Speed: This means the time between customers requesting products and services and receiving them. The main benefit to customers of the speedy delivery of goods is the service they can offer to the end user. Quite simply, the sooner customers can have their product or service, the more likely they are to buy it and they are also more likely to pay more for it.

In a hospital, speed can mean that:

The time between requiring treatment and receiving treatment is kept to a minimum
The time for test results and X-rays, for example, to be returned is also kept to a minimum, enabling treatment to take place

3. Dependability: This means delivering producing products and services that are reliable and consistent. Dependability provides stability and saves money. It improves trust between different parts of the operation. The disruption caused when you cannot depend on a supplier goes beyond time and cost. In a hospital dependability can mean that:

The proportion of operations that are cancelled is reduced
Appointment times are met
Test results and X-rays are returned as promised

4. Flexibility: This means being able to change the operation in some way to better meet your customers’ requirements. This may mean changing what the operation does, how it is doing it or when it is doing it. In a hospital flexibility can mean:

Introducing new kinds of treatment
Offering a wider range of treatments
Ability to adjust the number of patients treated
Ability to reschedule appointments

5. Cost: This means delivering products and services at minimal cost without affecting quality.
In a hospital, cost can refer to:

- Staff costs
- Technology and facilities costs
- Brought-in materials and services

One important way to improve cost performance is to improve the performance of the other operations objectives.

All five performance objectives are linked. For example, you may be able to deliver a product ahead of schedule but this might increase production costs or quality may be reduced. Similarly, the late delivery of products may give rise to additional costs elsewhere in the supply chain, or financial penalties. Your organisation’s approach to one performance objective should take into account the impact on the other performance objectives.

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