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Part One
Quality
Speed
Dependability
Flexibility
Cost
Introduction
are an operations manager in any kind of business – a hospital administrator, for example,
or a production manager at a car plant. What kind of things are you likely to want to do in
order to satisfy customers and contribute to competitiveness?
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You would want to do things right; that is, you would not want to make mistakes, and
would want to satisfy your customers by providing error-free goods and services which are
‘fit for their purpose’. This is giving a quality advantage.
You would want to do things fast, minimizing the time between a customer asking for
goods or services and the customer receiving them in full, thus increasing the availability
of your goods and services and giving a speed advantage.
You would want to do things on time, so as to keep the delivery promises you have made.
If the operation can do this, it is giving a dependability advantage.
You would want to be able to change what you do; that is, being able to vary or adapt
the operation’s activities to cope with unexpected circumstances or to give customers
individual treatment. Being able to change far enough and fast enough to meet customer
requirements gives a flexibility advantage.
You would want to do things cheaply; that is, produce goods and services at a cost which
enables them to be priced appropriately for the market while still allowing for a return to
the organization; or, in a not-for-profit organization, give good value to the taxpayers or
whoever is funding the operation. When the organization is managing to do this, it is
giving a cost advantage.
The next part of this chapter examines these five performance objectives in more detail by
looking at what they mean for four different operations: a general hospital, an automobile
factory, a city bus company and a supermarket chain.
The quality objective
Quality is a major
influence on customer
satisfaction or
dissatisfaction
Quality is consistent conformance to customers’ expectations, in other words, ‘doing things
right’, but the things which the operation needs to do right will vary according to the kind of
operation. All operations regard quality as a particularly important objective. In some ways
quality is the most visible part of what an operation does. Furthermore, it is something that
a customer finds relatively easy to judge about the operation. Is the product or service as it
is supposed to be? Is it right or is it wrong? There is something fundamental about quality.
Because of this, it is clearly a major influence on customer satisfaction or dissatisfaction.
A customer perception of high-quality products and services means customer satisfaction
and therefore the likelihood that the customer will return. Figure 2.5 illustrates how quality
could be judged in four operations.
Quality inside the operation
When quality means consistently producing services and products to specification it not only
leads to external customer satisfaction, but makes life easier inside the operation as well.
Quality reduces costs. The fewer mistakes made by each process in the operation, the less time
will be needed to correct the mistakes and the less confusion and irritation will be spread. For
example, if a supermarket’s regional warehouse sends the wrong goods to the supermarket,
it will mean staff time, and therefore cost, being used to sort out the problem.
Quality increases dependability. Increased costs are not the only consequence of poor quality.
At the supermarket it could also mean that goods run out on the supermarket shelves with
a resulting loss of revenue to the operation and irritation to the external customers. Sorting
the problem out could also distract the supermarket management from giving attention to