Performance Measures in Operation Management Essay

Words: 1714
Pages: 7

Performance Measures
1. Measuring and improving performance
1.1 Performance measurement
The activity of measuring and assessing the various aspects of a process or whole operation’s performance.
Performance here is defined as the degree to which an operation fulfils the five performance objectives at any point in time, in order to satisfy its customers.
A polar diagram can be used to see how well the 5 dimensions of performance of the operation meet requirements of the market.
It is unlikely that for any operation a single measure of performance will adequately reflect the whole of a performance objective. Usually operations have to collect a whole bundle of partial measures of performance.
What factors to include as performance
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* Less important: Competitive factors that performance in them does not significantly affect the competitive position of an operation.
In fact, to judge the relative importance of its competitive factors, an operation will usually need to use a slightly more discriminating scale (divide each criteria into three further points representing strong, medium and weak positions). i.e. nine-point importance scale.
Judging performance against competitors
The simplest way is to judge whether the achieved performance of an operation is better than, the same or worse than that of its competitors. However, we can derive a more discriminating nine-point performance scale.

2.1 The importance–performance matrix
The priority for improvement which each competitive factor should be given can be assessed from a comparison of their importance and performance. This can be shown on an importance–performance matrix. * the ‘appropriate’ zone – competitive factors in this area lie above the lower bound of acceptability and so should be considered satisfactory; * the ‘improve’ zone – lying below the lower bound of acceptability, any factors in this zone must be candidates for improvement; * the ‘urgent-action’ zone – these factors are important to customers but performance is below that of competitors. They must be considered as candidates for immediate improvement; * the ‘excess?’ zone – factors