Understanding operational objectives

an operations management hierarchy

the operations management like all other functional areas ave a hierarchy of aims, objectives and tactics:

• corporate aims
• corporate objectives
• operational aims
• operational objectives
• operational strategies
• operational tactcs

types of operational objectives

• quality circles
  • customer satisfaction
  • customer complaints

• • scrap rates (%)
  • punctuality = deliveries on time
    • total deliveries x 100
• cost targets
  • reducing unit costs
  • reducing fixed costs
  • reducing variable costs per unit
• volume target
  • number of items to be produced
  • targets in individual markets
  • percentage growth targets
  • volume in comparison to other branches or organisations
• innovation
  • spending a certain amount on R & D
  • targeting R&D expenditure as a % of sales
  • developing a particular innovation
  • innovation to extend product ranges

• efficiency
  • output per hour
  • reducing stock holding
  • just in time delivery
  • speed of response and action objectives
  • labour productivity=output
    • number of workers employed
• environmental target
  • reducing water pollution by a certain level of %
  • reducing the business's carbon fottprint or reducing carbon dioxide emissions
  • reducing noise levels
  • reducing the use of energy
  • minimising waste products or materials
  • increasing levels of recycling
  • making products that can be easily and largely recycled
  • achieving self sufficiency in energy use
  • replacing extracted or used resources

reasons for setting operations management objectives

• to act as a focus for decision making and effort
• to provide a yardstick against whichsuccess or failure can be measured
• to improve coordination, by giving teams and departments a common purpose
• to improve efficiency, by examining the reasons for success and failure in different areas

internal influences on operations management objectives

• corporate objectives
• finance
• HR
• resources available
• the nature of the product

external influence on operations management objectives

• market factors
• competitors and performance
• technological change
• economic factors
• legal factors
• environmental factors
• suppliers