Relationship between performance objectives and operations strategies

Resource Description

Analyse the relationship between performance objectives and operations strategies

Cost and Outsourcing
Businesses use operations strategies such as outsourcing to have access to the cheapest raw materials and production methods in order to meet the performance objective of cost. Outsourcing refers to obtaining non-core business functions from an outside contractor. Costs refers to the expenses that are incurred in the process of making or providing a service. Businesses aim to achieve the performance objectives of costs through implementing the strategy of outsourcing. This can be seen where Apple outsources its non-core business functions to Foxconn such as operations through cheap labour. In effect this allows Apple to manufacture its products through cheap labour and hence save costs on operations. Overall Outsourcing has allowed Apple to save costs on operations such as cheap labour. Henceforth there is a strong relationship between the performance objective of cost and the outsourcing strategy

Speed and technology
Businesses use operations strategies such as technology to enhance the speed of production. Speed refers to the time taken for products and other operational processes to respond to market demand. Technology refers to the equipment and knowledge available to help the business to perform certain functions. Businesses aim to achieve the performance objective of speed through the use of leading-edge technology. A positive implication of technology is the reduction of bottlenecks which increase the speed of production. Due to fast food outlets traditionally focused on speed, McDonald’s achieves this through using technology such as McDonald’s online ordering app allowing customers to place orders prior to arriving at McDonald’s. This results in a reduction in the influx of customers coming in unexpected times which will result in a reduction of pressure on the employees when delivering the product at the best quality standards. Overall, through technology, it will increase the speed of the production for the business.

Quality control and quality expectations
Businesses use operations strategies such as quality control to enhance the quality expectations of customers. quality expectations refers to the quality standards expected by the consumer when producing a product. Quality control refers to a system of maintaining standards in manufacturing products by testing a sample of the output against the specification. Businesses will want to achieve the performance objective of quality through implementing the quality management strategy of quality controls. A positive implication of using quality control to meet the performance objective of quality is that it ensures that the businesses quality is maintained throughout its products. Quality control involves staff physically inspecting each item on the assembly line to ensure the item is defect free to meet the expectations of consumers both nationally and globally. This can be seen where McDonlads chose to switch to another OSI owned plant in the Henan province for its meat supplies for its burger patties. Mcdonalds claimed the quality of the meat was much better as it goes through HACCP allergen controls and regular audits of supplier material. However this process is costly and time-consuming, Mcdonalds was without meat suppliers for 3 weeks because of poor quality meat resulting in a 7% decrease in sales . Overall, Businesses use operations strategies such as quality control to enhance the quality expectations of customers.