Levels of Operations Performance
Introduction
Today, most business enterprises engage in their daily operations mindful of the Impact it poses to the entire organization. Each level of activity is keenly monitored to ensure that they are all working in unison to achieve the intended business goal. Every organization has unique operation structure and style, nevertheless they are dependent on timely information and reliability of the operations to capitalize on efficiency. The essay paper will examine the three levels of operations performance and evaluate the Impact these aspects have incorporating in the case studies therein.
Levels of Operations Performance and how their Impact can be Evaluated
The business enterprise depends on the smooth flow of work performed at every stage of the department. The running of functions in every unit will give a clear picture of the operations performance of the organization. Firm’s activities cannot run alone. They need to be operated by human resources. Besides, there should be the presence of raw materials, machines and considerable financial assets for the business to run without any bottlenecks (Moorhead & Griffin, 2008). The pros of a useful well-run operation focus on the understanding of the building blocks geared towards the smooth running of activities in an establishment.
Conversely, the cons of poorly run operation include failures viewed by the customers as the incapability of the firm to deliver its promises. The Impact to the organization will trickle down to unnecessary expenses, occasioned by complacency and failure to exploit opportunities to improve its performance. Therefore operations performance plays a very significant role in organizations including (Gimenez, Sierra & Rodon 2012, P. 155):
- Acting as a source of competitive advantage
- It provides timely responsiveness to customers needs hence prevent the firm from reputational damage.
- It helps better the organizations performance by offering improved products and services.
- It improves adaptability to changes in the macro-environment and analyzes the VRIO strategies.
In the business, context operations can be analyzed based on its performance in the following three levels: the societal level, strategic level and the operational level.
Three levels of operations performance
The Societal level- Gimenez, Sierra & Rodon (2012) states that at this level of operations performance mainly uses the idea of the ‘triple bottom line’. In the general layout of the firms’ activities, all decisions arrived at should be a reflection of both the internal and external stakeholders’ interests. Under this level, the corporate social responsibilities (CSR) impacts on the way the firm operates (Gimenez, Sierra & Rodon 2012, P. 157):
They include the economic, social and environmental elements. Besides, the triple bottom line consists of the 3Ps-People, planet and profit. In the case example 2, the UPS Company incorporates the CSR by understanding the market dynamics it operates. First, the firm studies the environmental factors that disrupt its parcel delivery business by engaging meteorologists on the possible bad weather. This is meant to analyze the weather forecast of the region it operates as a way of remaining ahead in terms of timely parcel delivery. Secondly, at UPS head headquarters, they build on extra operational capacity. It helps in boosting regions affected by lousy weather through capacitating pilots who are at standby to rescue packages stuck, airlifting them to the required places. UPS firm alludes to the fact that the anticipated “hot spare program”- that identifies cities and regions with new plains on a mission has helped spare the company more than $ 20 million in revenue (Kumar, Batista & Maull 2011, P.165). The firms’ views on the societal 3ps are evident from the point of caring about peoples- staff safety by the provision of standby planes that supplement ground staffs on the delivery of services. On the planet front, the sustainability program ensures recoveries to minimize impact failures hence profit management.
Strategic Level– This constitutes decisions and activities operations managers carry out that pose significant strategic Impact on the organization (Zhu, Sarkis & Lai 2013, p. 110). at this level of operations performance, strategic economic position of the firm is revealed. As shown in the diagram, financial success is evaluated by looking at the Impact of the cost, revenue, risks, capital and learning capabilities. In the case example 3, Aldi firm managers have adopted a unique strategy in keeping the business afloat despite stiff competition in the retail industry. Aldi uses necessary facilities to reduce overheads and hence cost of operations. They have learned a strategy of only stocking a limited range of products typically around 700, in contrast to its rivalries that keep 25,000 to 30,000 hence increasing revenue. Also, the adoption of the private label means that their product is not at risk to be duplicated by other retailers. Customers can only find Aldi goods in its stores.
Other cost-saving activities that increase revenue includes keeping the carton displays open to reduce the need for unique shelving and zero use of plastic bags. Slack & Brandon-Jones (2018) explains that corporate social responsibility aspect comes to play when the management insists on the cart return store exercise- ‘cart rental system’ by customers to get their coin deposit back. Generally, Aldi Company integrates these practices to affect the economic performance of to achieve the following objectives (Pagell & Gobeli 2009, P. 280).
- To satisfy its customers by the provision of excellent services, for example, the introduction of product labelling and coin deposit.
- To minimize the risk of operational failure.
- Reduces investment amount by not opening shelves but instead, keep carton displays open for easy access to groceries.
- Through learning these operations, it creates room for future innovations for its staff.
- It significantly reduces the overall operational costs to be incurred.
Operational level- At this level, operational performance is measured by day to day activities. The operations performance objectives are judged and assessed by considering the following aspects: quality, speed, dependability, flexibility and cost.
Firms aspire to remain competitive in the market by providing quality operations. In this regard, it influences the quality of goods and services. Furthermore, the external element of customer impact on service delivery will depend on the quality of operations (Moorhead & Griffin, 2008). In the internal structure, quality operations reduce costs, consequently increasing dependability. Aldi grocery provides quality fresh produce to its customers by first giving operationalizing quality service in and out of the store.
Speed simple means getting things done in the fastest way possible. Operations have a massive impact on how speedy goods and services can be delivered in a specific region regardless of the impending circumstances. In the case example 1- when speed means life or death, all operations should be geared towards responding quickly to clients demand. For instance, in road accidents, the treatment one receives during the early hours of the incident determines their survival. Therefore speed in the rescue operation is paramount. The three aspects of speed to be considered in this circumstance is the time is taken to find out about the accident, time taken to reach the scene and time taken for the victim to be taken to appropriate treatment facility. The TeleAid system found in the Mercedes-Benz has perfected this act through installing onboard computer software in their fleets. This helps to speedily identify the accident scene and begin the rescue mission as quickly as possible. Besides, dependability has helped the company enjoy massive market share since accidents scenes require on-time approach. Dependability increases operational reliability within the firm (Kumar, Batista & Maull 2011, P. 160). Not only does the act save time but also money that would otherwise be invested in solving reliability issues. Another operational level objective is flexibility. In the external front, flexibility helps in the production of arranging of new products and services at different volumes. Internally, it can help in quickening response times, for example, in the case of Mercedes Benz’s computer program. Cost involves doing things cheaply. In the external structure, cost enables firms to reduce the price to amass higher volumes. Aldi Company deploys this strategy to lower prices and maintain its customers while increasing sales. Internally, the company can save and gain profit as per cost performance.
Conclusion
The essay has examined operations performance in the case study presented and different levels of this aspect in business enterprises. Societal, strategic and operational levels play a vital role in the internal and external performance of organizations. Besides, the paper has enumerated on the importance of operating performance. Indeed, activities in most organizations are represented by either machine, human resources, materials and the firm’s financial assets.
References
Gimenez, C., Sierra, V., & Rodon, J. (2012). Sustainable operations: Their Impact on the triple bottom line. International Journal of Production Economics, 140(1), 149-159.
Kumar, V., Batista, L., & Maull, R. (2011). The Impact of operations performance on customer loyalty. Service Science, 3(2), 158-171.
Moorhead, G., & Griffin, R. W. (2008). Organizational behaviour managing people and organizations. Dreamtech Press.
Pagell, M., & Gobeli, D. (2009). How to plant managers’ experiences and attitudes toward sustainability relate to operational performance. Production and Operations Management, 18(3), 278-299.
Slack, N., & Brandon-Jones, A. (2018). Operations and process management: principles and practice for strategic impact. Pearson UK.
Zhu, Q., Sarkis, J., & Lai, K. H. (2013). Institutional-based antecedents and performance outcomes of internal and external green supply chain management practices. Journal of Purchasing and Supply Management, 19(2), 106-117.