Effective operations:Customer Service – few click websites, help desk, after sales service. Dealing with suppliers – Keeping costs down/ ethical/ speed of delivery/ payment terms/ location.Quality:Quality Control – checking at the end.Quality Assurance – checking throughout the production process/ all staff involved. Quality and marketing – closely link in A2.Capacity Utilisation:Spare capacity can lead to higher production costs. Can either reduce capacity or increase usage. Spare capacity can include machinery or space.
Learning ObjectivesBy the end of the lesson you should be able to:1. Understand the range of operational objectives typically set by larger businesses.2. Understand how internal and external factors can influence the setting of operational objectives.
Understanding Operational ObjectivesWhat are operationalobjectives?Targets set in relation tothe production processor provision of aservice.Targets can includeoutput levels or unitcosts.
What do the operations function do?Decide where to produceDecide what production facilities are neededChoose best production methodsManufactures the productOrder supplies and chooses suppliersMonitors qualityResearch new production processesEnsure efficiencyMotivates staff
What objectives might they have?Operational objectives: quality cost targets volume targets innovation efficiency environmental targets benchmarking innovationResearch:1. Find a description of each operational target.2. Research businesses and find at least one real-life example of each of the operational objectives listed above.
Operational Objectives – Research Questions1. With use of an appropriate example, explain what the term ‘operational objectives’ means to a manufacturer of soft drinks, such as Coca-Cola.2. Analyse the role of environmental targets within the supermarket industry.3. What might be the operational targets of an online insurance company such as Direct Line?4. Discus the potential advantages of adopting a policy of benchmarking between NHS Hospitals.
What are Internal and Externalinfluences on operational objectives? Internal Resources available Ethics of the company (fairtrade?) The corporate objectives Brand image External Competitors performance Customer expectations Supplier actions Economic changes Demographics
Operational objectives and Mr BeanDave WoodwardCEO Heinz UK & IrelandAge 45Started at John LewisThen MarsThen CokeThen P & G
Mr Bean article questions1. Four years ago Heinz was a UK market leader, what was the problem with the company?2. What was the Operational Strategy adopted by Dave Woodward?3. How much impact has this strategy made “dry grocery” vs the rest of the market?4. Provide two examples of the output of this strategy5. Despite the recession how have Heinz’s revenues been doing?6. What’s the nature of the next wave of this strategy hinted at in the article?7. What is an alternative/additional strategy discussed in the article and why has it been dismissed?8. Can you identify a third strategy referred to?9. Given that ketchup and beans “are about as mature as markets get” where is growth going to come from in the future?
FinallyIdentify and explainthree key words fromtodays lesson.
Re-cap Learning ObjectivesYou should now be able to:1. Understand the range of operational objectives typically set by larger businesses.2. Understand how internal and external factors can influence the setting of operational objectives.