ANALYSING OPERATIONAL PEFRORMANCE

LABOUR PRODUCTIVITY MEASURES OUTPUT PER EMPLOYEE

LABOUR PRODUCTIVITY = TOTAL OUTPUT / NUMBER EMPLOYEES

MANAGERS INFLUENCEE BY WAY TRAIN STAFF / ORGANISE EMPLOYEES / REWARDING STAFF

MEASURE COST PER UNIT

UNIT COSTS = TOTAL COSTS / TOTAL OUTPUT

INFLUENCE UNIT COSTS E.G. CONSIDER WHAT SUPPLIERS USE HOW THE USE IT

CONTROL COSTS OTHER EFFECTS: LESS FLEXIBILITY 

IMPORTANT CONTROL NIFLUENCE PRICE CAN CHARGE

MEASURES MAXIMUM PRODUCE GIVEN EXISTING RESOURCES

CAPACITY CALL CENTRE DEPEND NUMBER OPERATIVES / PHONE LINES

CAPACITY IS FIXED - GIVEN LEVELS OF RESOURCES

OVER TIME CAN CHANGE - RESOURCES BECOME AVALAIBLE 

DESIRED LEVEL DEPEND EXPECTED SALES

MEASURE EXISTING OUTPUT AS % OF MAX POSIBLE OUTPUT

EXISTING OUTPUT / MAX POSSIBLE OUTPUT X 100

HIGHT THE CAPACITY UTILISATION MORE RESOURCES UTILISED

LOW CAPACITY CONCERN

• SUGGESTS DEMAND RELATIVELY LOW
• COST PER UNIT HIGH - FIXED COSTS NOT SPREAD OVER MANY UNITS - HIGH FIXED COST PER UNIT

IDENTIFY PROBLEMS / OPPURTUNITIES

ANALYSE DIFFERNT COURSE ACTION

INFORM OPERATIONS DECISION MAKING & PLANNING

MANAGERS ANALYSE IDENTIFY CAUSE

CONSIDER NECESSARY INVEST TRAINING

REVIEW REWARD SYSTEMS

CHANGE WORK IS UNDERTAKEN

MANAGERS IDENTIFY CAUSE

DUE SUPPLIER COSTS?

LOW LABOUR PRODUCTIVITY?

ACTIONS TAKEN IMPROVE SITUATION E.G. NEGOTIATION SUPPLIERS

TOO LOW:

MANAGERS CONSIDER INVESTING EXPAND - DEPEND FACTORS COSTS / RISK INVOLVED

TOO HIGH:

CONSIDER INCREASE DEMAND OR DOWN SIZE

WHEN MAKING DECISIONS CONSIDER COSTS PROFITS RISKS IMPACT COMPETIVNESS 

SOME QUICK IMPLEMENT OTHERS LONGER

INVEST TECHNOLOGY - EMPLOYEES ACCESS MORE EQUIPMENT HELP COMPLETE TASKS

IMPROVE TRAINING - STAFF MORE SKILLS

CHANGE WAY WORK ORGANISED / DESIGN JOBS IMPROVE FLOW OF WORK / REDUCE TIME WAITING COMPLETE TASKS

CHANGE WAY EMPLOYEES REWARDED PROVIDE MORE INCENTIVE

NEGATIVE IMPACT ELSEWHERE

INCREASE PRODUCTIVITY REDUCE QUALITY

RESIST EMPLOYEES MORE EFFICENT LESS NEEDED - MADE REDUNDANT

DEMAND HIGH PAY REUTRN MORE PRODUCTIVITY - MAKING MORE REVENUE

COMBINATION: LAND / LABOUR / CAPITAL DEPEND NATURE PROCESS

COMBINATION DEPEND: PROCESS ITSELF

• WORK INVOLVED - REPTITIVE - MACHINERY

AFFORDABLE / AVALIABLE

• FUNDS / SPACE NOT THERE
• SCALE OPERATIONS DOESN MERIT
• HAVE RENT EQUIPMENT EXPENSIVE

OPTIMAL MIX AFFECT QUALITY WORK

NO LATEST MACHINERY = INEFFICENT

LEAN PRODUCTION OCCURS WHEN MANAGERS REDUCE AND THEREFORE OPERATIONS BECOME MORE EFFICIENT

APPROACH TO CONTINUES FLOW (MASS PRODUCTION) STEMMING FROM TOYOTA CREATE GREATER EFFICIENCY AND MOTIVATION WITHIN THE PRODUCTION FUNCTION

GOODS PRODUCED TO ORDER - STOCK LEVELS MINIMUM

LOW STOCK - DECREASES COSTS STORING - HELPING INCREASE PROFITS 

INCREASE FLEXIBILITY OF FIRM 

HELPS REDUCE WASTE - ONLY UES WHAT NEEDED

PRODUCTION ORGANISED AROUND TEAMS

EVERY TEAM RESPONSIBLE ONE STAGE PRODUCTION PROCESS

HELPS IMPROVE MOTIVATION ENCOURAGES TEAM WORK 

INCREASE QUALITY AS EMPLOYEES FEEL OWNERSHIP ON FINAL PRODUCT

TEAMS SELF CHECK WORK BEFORE ENTER NEXT STAGE PRODUCTION

EMPHASISES VALUE CONTINUOUS IMPROVMENT

MAJOR CHANGES OCCUR SMALL CHANGES MADE REGULARLY 

EMPLOYEES ENCOURAGED OWN IDEAS BECOME LEAN 

THOSE DOING WORK - KNOW DO IT MORE EFFICENTLY 

USP BUISNESS

PRODUCE / DELIVER ITMES FASTER COMPETITORS 

INCREASE SALES

EXCELLENT SUPPLIERS RELATIONSHIPS - SUPPLIES ARRIVE RIGHT TIM

RELIABLE EMPLOYEES - OR STOP 

FLEXIBLE WORKFORCE - ABLE WORK ANYTIME ANYWHERE

PROBLEM = CORD PULLED PRODUCTION STOPPED 

FLASHING LIGHTS SIGNAL 

EVERYONE LEARN MISTAKE

NEEDS TRANSPARENCY ENSURE MISTAKE OCCURS EVERYONE LEARNS 

DECRASE PRODUCT DEVELOPMENT TIMES 

EVERYONE INVOLVED PROJECT WORKS SAME THING SAME TIME

DECREASE TIME PRODUCT TO MARKET

EMPLOYEES STRIKE / SUPPLIERS FAIL DELIVER HALT OPERATIONS

VULNERABLE UNPREDICTABLE EVENTS E.G. TSUNAMI JAPAN COULDNT GET SUPPLIES

EMPLOYEES MORE ACTIVE CHECKING OWN WORK ENSURE PROBLEMS DISCOVERED EARLY

EMPLOYEES RESIST - DONT WANT RESPONSIBILITY / TRAIN

REQUIRES EXCELLEN LINK SUPPLIERS - INVESTMENT TECHNOLOGY / COMMUNICATION

ENABLES BUSINESS IMPROVE QUALITY / EFFICENCY

BE MORE FLEXIBLE - TRACK CUSTOMER BEHAVIOUR EFFECTIVELY SPECIFIC GROUPS MORE EASILY PROVIDE PERSONALISED PRODUCTS

REDUCE COSTS BEING MORE EFFIECTNY LESS ERRORS

BE INNOVATIVE - ENABLING DOWNLOAD WATCH FILMS ANY TIME INCREASE CUSTOMER SATISFACTION

ENABLES BUSINESS IMPROVE QUALITY / EFFICENCY

BE MORE FLEXIBLE - TRACK CUSTOMER BEHAVIOUR EFFECTIVELY SPECIFIC GROUPS MORE EASILY PROVIDE PERSONALISED PRODUCTS

REDUCE COSTS BEING MORE EFFIECTNY LESS ERRORS

BE INNOVATIVE - ENABLING DOWNLOAD WATCH FILMS ANY TIME INCREASE CUSTOMER SATISFACTION

FINANCE INVEST: NEW TECHNOLOGY NEEDED WHEN BUSINESS STRUGGLING / LACKING FINANCE TO PAY

TRAINING TO USE EFFECTIVLEY

UNDERSTAND / MANAGE IMPACT OTHER FUNCTIONS - MAY CHANGE JOB HAVE TO LEARN NEW SKILLS

BE ABLE JUDGE IF USEFUL - IN LONG TERN THAN DOING EVERY NEW DEVELOPMENT