Operations Management Chapter 2: Measuring Performance

Flashcards for Operations Management Chapter 2 Lecture

Measurement

Act of quantifying the performance of organizational units, goods and services, processes, people, and other business activities.

Supply Chain Performance Measurement

Firms with best supply chains create hierarchies of precise performance measures at the execution level, designing standards & monitoring them.

Customer-Satisfaction Measurement System

System that provides a company with customer ratings of specific goods and service features. Indicates the relationship between customer ratings and a customer’s likely future buying behavior.

Quality

The degree to which the output of a process meets customer requirements. Includes goods quality (physical performance) and service quality (meeting/exceeding expectations).

Service failures/upsets

Errors in service creation and delivery that negatively affect customer perception and satisfaction.

Time

Performance measures related to the speed of performing a task, often measured by processing time and queue/wait time.

Flexibility

Ability to adapt quickly and effectively to changing requirements. Includes design flexibility and volume flexibility.

Innovation

Ability to create new and unique goods and services that delight customers and create competitive advantage.

Productivity

Ratio of the output of a process to its input.

Operational efficiency

Ability to provide goods and services to customers with minimum waste and maximum utilization of resources

Triple bottom line (TBL or 3BL)

Measurement of sustainability related to environmental, social, and economic factors.

Business Analytics

Analyzing data effectively to make better decisions, including visualizing data, calculating statistical measures, and using correlation and regression analysis.

Interlinking

Quantitative modeling of cause-and-effect relationships between external and internal performance criteria.

Value of a Loyal Customer (VLC)

Quantifies total revenues or profits each target market customer generates over a buyer’s life cycle.

Actionable Measures

Provide the basis for decisions at the level at which they are applied across the value chain, organization, or specific process.

Balanced Scorecard Model

Translates strategies into measures that uniquely communicate an organization’s vision, including financial, customer, innovation and learning, and internal perspectives.

Value Chain Model

Evaluates performance throughout the value chain by identifying measures associated with suppliers, inputs, value creation processes, outputs, customers, and supporting processes.

Service-Profit Chain Model

States that employees create customer value and drive profitability through a service-delivery system, based on cause-and-effect linkages between internal and external performance.