QUALITY Industry Best Practices Used in Operational Performance Essay
Industry Best Practices Used in Operational Performance Essay
Analyze the role of operations management in organizational performance.
In your role as a Business Process Consultant at Bryce-Kingston, you are writing business case for JBH Electronics (JBH) in preparation for their upcoming shareholder meeting to vote on a future acquisition.
The Executive team from JBH wants to ensure that they have a perspective on what other companies in the electronics industry are using as best practices for operations management and organizational performance processes.
You will create a business case outlining how JBH could increase organizational performance using industry best practices in operations management. Conduct research on the best practices for using operations management in organizational performance measurements and include the following in the business case:
- Determine what are some industry best practices using in operational performance.
- Outline how JBH could use operations management to streamline their performance.
- Determine what operational measurements JBH can use to measure performance.
- Provide your recommendation from your research on best practices for operations management and organizational performance to support JBH Electronics success.
Cost efficiency is something that organizations are faced with on a daily basis. To assist with organizing cost efficiency efforts, organizations have to understand how standardization and industrialization have affected the way organizations operate. From the beginning of an organized economy, organizations have been trying to figure out how to maximize bottom line profits and harness cost efficiencies through internal processes and external relationships.
Standardization is best described as an agreed upon benchmark level of service that an organization uses to ensure that every process related to the manufacturing of a good or the execution of a service meets certain specifications.
The use of standardization ensures that consistent goods or services are delivered to the consumer. Typically, standardization includes the following parameters:
- Developing standards – the development of standards allows for the customization of a process to ensure that costs are controlled. Each process can have a certain specification to create a repeatable process. As an example, a shoe manufacturer may develop a standard to ensure that each size of shoe that they make is a consistent size. This would be considered a standard of quality that is used in a repeatable process.
- Promoting standards – the promotion of standards keeps all parties involved in achieving consistent quality each time a service is performed, or a product is produced. To continue with the shoe manufacturer example, the organization could document the standards in employee training, job aids, or through on the job training.
- Mandating standards – the mandating of standards is a way that organizations can control costs and gain efficiencies.
Industrialization is the process of transforming the economy from an agricultural to a manufacturing focus. Today, our economy is a mix of both agricultural and manufacturing, which are both directly impacted by the need for cost efficiencies. There are five tenets that are required for industrialization: Capital, connections, labor, land, technology
Each of the tenets above characterizes how industrialization has changed the way organizations do business and has heightened the awareness of cost efficiency. In closing, both standardization and industrialization have played an integral role in how business is conducted in the global economy.
The impact of product differentiation is something that has revolutionized the way that organizations plan and design products for consumer needs.
If you think back to the Ford Model T car, the car manufacturer was thinking about mobility and a mode of transportation to fit the needs of the consumer during that time period. As design has evolved, organizations have used differentiation techniques in various ways to gain or maintain a competitive advantage in the market.
There are 3 different types of differentiation strategies that organizations could use:
- Focused Differentiation – this type of differentiation occurs when an organization competes in a smaller segment or niche of the market, where they can provide specialized service. As an example, Chick-fil-A serves a niche in the quick service market by serving a limited selection of chicken items on their menu. The company is not focused on competing with other quick service restaurants that offer other alternatives to chicken.
- Focused Low Cost- this type of differentiation is very similar to focused differentiation because it focuses on a smaller segment of the market with low price as the emphasis. Continuing with the quick service example, restaurant that offer a value menu or dollar menu are competing purely on price for those consumers in this segment.
- Integrated Low-Cost/Differentiation Strategy- this strategy is used when an organization wants to compete on price and features of their product. Creating value for the customer is evident through a lower price with the features that meet the consumers need. Organizations are able to achieve this type of differentiation by capitalizing on new technologies, leveraging internal core competencies, or process efficiencies. Airlines are the best example of competing on price and features because of the intense competition. Low cost airlines have been thriving in this competitive market because the consumer decides the price that they are willing to pay for the convenience of priority boarding, carryon baggage, and seat selection.
By definition, differentiation is defined as characteristics that an organization uses to make a good or service unique. When considering differentiation, an organization must think about attributes that are different from their competitors. For instance, if you look at the number of toothpaste options, you could get overwhelmed. The manufacturers of toothpaste each are trying to provide some type of claim or ingredient that their competition does not, such as “95% cleaner teeth or enamel restoring.” This is a great example of differentiation in between products in the same category because they all use the same raw materials to create the product.
In order for differentiation to be effective, there must be some type of value created for the consumer. Resource planning is a key element of how organizations can create differentiation by properly allocating or organizing processes. Some of the attributes listed below are where organizations can create value by using resource planning:
The use of differentiation is not without some risks. Listed below are the two risks from using differentiation as a core strategy for a competitive advantage:
- Devaluing of the product – this can occur when an organization tries to compete in an already crowded market, the abundance of alternative products can cause the price to be driven down.
- Imitation – this can occur when competitors try to replicate a product made by another organization. A great example of this is the spicy chicken sandwich “war” that is currently going on in the quick service industry. All of the major restaurants, such as Chick-fil-A, Wendy’s, Popeyes, and Burger King are all fighting for the moniker of “the best spicy chicken sandwich.”
Competing in a market with numerous competitors is difficult for companies because there are factors such as price, features, and quality that.
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