Improvement strategy

Issues include,
Big radical improvement
projects, or small, continuous
improvements.
Performance measurement
used for setting the direction
of improvement.
Benchmarking against other
operators.
Prioritising improvements.
Learning and enhancing
process knowledge through
control.
Expectations on, and
contributions from, the
operations function.

Performance
objectives

Quality
Speed
Dependability
Flexibility
Cost
Capacity

Development
and Organisation
(Operations development
Process
Supply
and improvement)
Network Technology

Decision areas

Market competitiveness

Resource usage

The Direct, Develop, Deploy strategic improvement cycle

Operations Resources
Operations
capabilities
DEVELOP operations
capabilities through
learning

Operations
resources
and
processes

Market Requirements
DEPLOY operations
contribution

The Strategic
Operations
Improvement
Cycle

DIRECT performance
and prioritisation

Market
potential
Market
strategy

Intended
market
position

Setting the Direction

Cycle of setting targets and attempting to meet customers real
requirements that can lead more accurate interpretation of the real
requirements of the market.
Performance Measurement
What factors should be included as performance targets?
Which are the most important?
How should they be measured?
On what basis should actual against target performance be
compared?

recting improvement is a cycle of comparing targets with performance

rmance targets can involve different levels of aggregation

Five Performance Objectives

Quality : Operations quality is usually measured in terms of the
environmental impact .
Speed : Time.
Dependability : A matter of keeping promises on delivering after the
event checks and reports.
Flexibility : A matter of being able to resource.
Cost : The total cost of keeping and using the resources to perform the
emergency.

BENCHMARKING
Method for senior managers to drive organisational
improvement is to establish operational
benchmarks.
By highlighting how key operational elements
shape up against best in class competitors, key
areas for focused improvement can be identified
Used the term competitive benchmarking to describe a
process used by the manufacturing function to revitalise itself
by comparing the features, assemblies and components of its
products with those of competitors

TYPES OF BENCHMARKING
Non-competitive benchmarking is benchmarking against external
organisations that do not compete directly in the same markets.
Competitive benchmarking is a comparison directly between competitors in
the same, or similar, markets.
Performance benchmarking is a comparison between the levels of achieved
performance in different operations. For example, an operation might
compare
its own performance in terms of some or all of its performance objectives
quality, speed, dependability, flexibility and cost against other organisations
performance in the same dimensions.
Practice benchmarkingis a comparison between an organisations
operations practices, or way of doing things, and those adopted by another
operation

nt standard of comparison give different messages

Different standard of comparison give different messages

(continued)

THE OBJECTIVES OF BENCHMARKING

It can be seen, therefore, as one
approach to setting realistic performance
standards. It is also concerned with
searching out new ideas and practices
which might be able to be copied or
adapted. The success of benchmarking,
however, is due largely to more than its
ability to set performance standards and
enable organisations to copy one
another.

Slide 7.13

Developing operations capabilities is encouraged by a cycle of

attempting to control processes that enhance process knowledge
that, in turn, make control easier

Control

DEVELOP

Knowledge

Operations
capabilities

Operations
resources and
processes

Nigel Slack and Michael Lewis, Operations Strategy, 3rd Edition, Nigel Slack and Michael Lewis 2012

Slide 7.14

Process control starts the learning that develops process

knowledge

Learning

Process
Knowledge
Process
Control

Nigel Slack and Michael Lewis, Operations Strategy, 3rd Edition, Nigel Slack and Michael Lewis 2012

Slide 7.15

The measures used in the balanced scorecard

Financial performance
measures
To achieve strategic impact
how should we be viewed by
shareholders?

Internal process
performance measures
To achieve strategic impact
what aspects of
performance should
business process excel at?

Overall
strategic
objectives

Customer performance
measures
To achieve strategic
impact how should we
be viewed by
customers?

Learning and growth

performance measures
To achieve strategic
impact how will we build
capabilities over time?

Nigel Slack and Michael Lewis, Operations Strategy, 3rd Edition, Nigel Slack and Michael Lewis 2012

The Four-Stage
Model of
Operations
Contribution

Stage 1: Internal neutrality

The poorest level of operational contribution. The
other areas of the business view operations as a
barrier to opportunity. Lacking in flair and competitive
drive. The operations function is inward looking and
at best reactive. Its vision is to be internally neutral, a
position it attempts to achieve not by anything
positive but by avoiding the next big mistake

Stage 2: External neutrality

The operations function must
compare itself to other companies in
the outside marketplace. By
implementing best practice
strategies already in use they seek to
catch up to their peers.

Stage 3: Internally supportive

The operations strategy is now aligned to the
overall business strategy. It can internally support
the objectives of the business and considers itself
to be one of the best in class. It aspires to be
number one in its field and the effort to be number
one is likely to yield its own rewards.

Stage 4: Externally supportive

An operation at stage four is unambiguously the
best at what they do. Their creativity and proactive
attitude has put them ahead of the others and are
easily able to out compete their competition when
following the same rules. The operations is now
interested in changing these rules and redefining
the expectations for the whole industry.

Thank you