Chapter 11: Understanding Operational Objectives

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  • Understanding Operational Objectives
    • Types of operational objectives
      • quality targets
        • customer satisfaction ratings
        • customer complaints
        • scrap rate
        • punctuality = deliveries on time / total deliveries x 100
      • cost targets
        • reducing fixed costs
        • reducing variable costs per unit
        • reducing unit costs
      • volume targets
        • number of items produced
        • percentage growth targets
        • targets in individual markets
        • volume in comparison to other branches/ organsiations
      • innovation
        • innovation to extend product range
        • developing a particular innovation
        • achieving a certain number of patents
        • targeting research and development expenditure as a percentage of sales
        • spending a certain amount on research and development
      • efficiency
        • measure of production over a given time period
        • just in time delivery
        • speed of response and action objectives
        • reducing stockholding
        • labour productivity (labour productivity = output / number of workers employed)
      • environmental targets
        • reducing water pollution
        • increasing recycling
        • reducing noise, energy, waste production
        • reducing carbon footprint
    • External factors on operational objectives
      • market factors
      • competitors' actions and performance
      • technological change
      • political factors
      • economic factors
      • suppliers
      • environmental factors
      • legal factors
    • Internal factors on operational objectives
      • finance
      • corporate objectives
      • marketing
      • human resources (HR)
      • nature of the product
      • resources available
    • operations management tactics
      • short-term operations management measures adopted to meet the needs of a short term threat or opportunity
    • operations management aims
      • broad, general goals of the operations management function within an organisation
    • operations management strategies
      • long-term or medium term plans, devised at senior management level, and designed to achieve the firm's operations management objectives
    • operations management objectives
      • specific, focused targets of the operations management function within an organisation


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