Five Internal Performance Priorities of Operations Strategy

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  Abstract:Neely’s approach to Operations strategy and Order Winners and Order Qualifiers,considering the five internal performance priorities:cost,quality,dependability,flexibility and speed.This he article will give an explanation of the five internal performance priorities.
  Key words:Neely’s approach 5 internal performance priorities
  HHill(1993)identified certain competitive factors which firms could use to both tender for and then win business.He called these terms order qualifying and order winning factors respectively.
  Cost,Within the category of costs Neely(2008)suggests there are five main cost factors,namely,Manufacturing costs(MC),Value added,Selling price,Running cost(RC),Service cost(SC).As for the manufacturing firm,the customers pay more attention to MC,RC,and SC.MC refers to the actual cost of making the product or delivering a service.It is all the direct costs associated with the operations activity.Particularly in business-to-business(B2B)markets,customers often have a very clear view of what the cost structure of their supplier is likely to be as they can benchmark one supplier against another.The RC refers to how much it will cost the buy to use and operate whatever they have purchased.For instance,this is a major concern of many buyers in the transportation industry.Bus companies and haulage contractors want to know how much it will cost them to run the vehicles that they operate.SC:Some products,such as motor cars,may need regular maintenance and servicing,which has to be paid for.
  Quality,the quality of a product or service is almost certainly one of the most important criteria for customers to evaluate,both before and after purchase.Neely’s(2008)categorization of quality criteria is Performance,Features,Consistency,Conformance,Technical durability,Serviceability,Aesthetics,Perceived quality,Value for money.As for the customers,the quality of products is remembered long after the price is forgotten.The global automotive industry was transformed by ensuring that components could be made to specified tolerances using process-capable equipment,leading to new standards of reliability and trouble free service.These lessons on quality are slowly being assimilated by other industries,but the drive for perfection is a journey that takes many years of commitment from everyone in your company,working to implement continuous improvements that,when combined,make a significant contribution.
  Flexibility,Neely(2008)has expanded these as follows:Material quality,Output quality,New product,Modified product,Deliverability,Volume,Mix,Resource mix.For the manufacturing sector,customers focus on output quality and new product.No matter what raw material the company chooses,however,the output quality contacts the customers directly.New product,it goes without saying,it is one of the most significant competitive factors,the more new products you can produce,the more customers you can attract.   Dependability,Neely’s types of dependability are Schedule adherence,Delivery performance,Price performance,Ability to keep promises.(2008)Nowadays,both the consumers and the manufacturers have to be safety conscious.Meanwhile,the ability to keep promises can keep the firm win the loyal customers.It is no doubt,ensure that the produts’ user comes to no harm is also the vital factor which customer focus on.
  Speed,Delivering high quality products on time and in the correct numbers remains fundamental to sustaining customer focused businesses.According to Neely(2008)there are five forms of speed:Quote generation,Delivery speed,Delivery frequency,Production speed,New product development speed.For the manufacturing sector,customers incline to pay close attention to the new product development.It is decided to whether the company can win more customers in a short time.(Cooper,R.G.1996)
  References:
  Cooper,R.G.(1996)Overhauling the new product process.Ind.Marketing Managmt,25,465-482.
  Hill,T.(1993)The Essence of Operations Management,Financial Times Press,London
  Horte,S.A.and Ylinenpaa,H.(1997)The firm’s and its customers’ views on order winning criteria,International Journal of Operations & Production Management,17,10,1006-1019
  M A Williams and A K Kochhar(2000)“New product introduction practices in the British manufacturing industry” Journal of Engineering Manufacture 214:853 P.857-858
  Neely,A.(2008)Business Performance Measurement:Unifying Theory and Integrating Practice(2nd edition),Cambridge University Press,Cambridge
  Wikipedia “Safty Culture”[online]Available at:http:// en.wikipedia.org/wiki/safety culture
  作者簡介
  杨琇岚(1988—),女,汉族,籍贯:四川省凉山州西昌市,单位:西昌学院经济管理学院,研究方向:管理学。
  (作者单位:西昌学院经济管理学院)
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