The primary objectives of operations management include increasing efficiency, improving quality, reducing costs, and improving customer satisfaction. Cost, quality, delivery, and flexibility are examples of operational objectives. Some companies may emphasize costs because they adopt a cost-leadership strategy, which requires them to operate with a lower cost structure than the industry average. Others may emphasize quality because of the application of a differentiation strategy in which higher quality allows them to charge a higher price.
All companies try to keep costs low. Because they are profit-oriented, reducing costs is one way to achieve greater profits in addition to increasing revenues. Reducing costs becomes essential when a company has a high fixed cost structure. These costs can't decrease even when they don't produce production.
I mean, they still bear fixed costs even if production equals zero. And to keep their fixed costs low, they have to sell as many products as possible. That way, they can spread their fixed costs over more production, reducing their cost per unit. In addition, keeping costs low is also essential for companies with a cost-leadership strategy.
And the costs affect the amount of dollars they can charge customers. Therefore, when they offer prices at the industry average, they must have a lower cost structure than their competitors to operate more profitably. And let's assume that companies with a cost-leadership strategy can reduce costs. In that case, they can sell products at slightly lower than average prices to encourage consumers to switch to them.
As a result, they can record higher sales volumes, but still be profitable because they have lower operating costs. The cost objective is also closely related to the conditions under which the company operates, not just to the competitive strategy adopted. For example, during a recession, companies seek to further reduce costs to survive in the industry. Your revenues decline as demand falls.
Therefore, to stay, they have to streamline their operations and ensure that the dollars they receive are sufficient to cover the costs. Quality becomes the key to the differentiation strategy. The company emphasizes the uniqueness of the product to attract customers and encourage them to spend more money. Therefore, it is almost impossible to attract them to buy the product without higher quality.
In addition, quality is strategic to ensure customer satisfaction. If product quality persists over time, it will affect customer perception. And, when they buy the product, they already understand the quality they are going to get. Finally, consistent, superior quality creates a positive impression and influences future purchasing decisions.
For these reasons, improving quality as an operational objective helps companies generate sales. Consistent superior quality allows customers to keep buying again and again. In addition, the positive impression it creates encourages them to promote their products among others. Finally, it will strengthen the brand and make it easier for the company to generate sales by launching new products.
In addition, improving quality can also contribute to efficiency and reduce costs. For example, good quality reduces associated costs, such as repairs, complaints and returns. Flexibility is how companies can adapt their operations to changes in the business environment. For example, companies vary production volumes relatively quickly in response to unexpected changes in demand.
Therefore, they can quickly increase production when demand increases to get more sales. On the contrary, when demand falls, they easily streamline production and reduce costs. In addition to changes in the volume of demand, the flexibility to customize products according to demand is also essential. The products may be relatively standard, but companies add custom features or services to meet the needs of each customer.
And advanced technology allows those customizations to be mass-produced at a lower cost. That's what we call mass customization. This method is applied in several industries, such as automotive, finance, and software. Successful marketing a product involves more than offering superior quality at the right price and selling it in the right locations and segments.
It also requires companies to ensure that products are available when customers need them. In addition, the company must also be there when customers need help with post-purchase services. The speed of response is a fundamental aspect because it also affects customer satisfaction. Delivering products just when customers need them creates a positive impression.
Likewise, managing customer complaints or quickly providing post-purchase assistance is also key to satisfying them. If you don't, the customer is likely to feel dissatisfied. What's worse, it encourages customers to switch to competing products. Speed of response doesn't just require a shorter production process.
But it also requires the support of other functional areas, such as logistics and after-sales service. Companies add value to products by processing inputs into products. They then sell the production at a higher price than it costs to produce it. Then, profits can also be invested to reduce costs.
That way, even if companies don't change their selling price, they can make greater profits by reducing their costs. Thus, for example, they invest the profits in new technologies or in higher capacities. Environmental goals are increasingly important these days. Stakeholders have seen the environment as an essential aspect of sustainability.
And they demand that companies implement elements such as environmental, social and corporate governance (ESG). Therefore, the transformation into an environmentally friendly company will create a positive corporate image, which in turn will have an impact on the company's sales in the long term. Comparative advantage comes from the ability to produce goods and services at low opportunity costs, which is. Operational objectives are short-term and are specific and measurable, strategic objectives are long-term objectives.
Sales departments can set operational goals to increase sales revenue in the coming months. Operations management plays an important role in ensuring that the company achieves its strategic objectives. The external influence on operating objectives are market factors, rival actions, technological change, and legal factors. An objective measure of performance is a method for measuring the efficiency of an individual, team, or organization in carrying out their responsibilities.
This research article examines how companies are responding to the need to improve their five performance objectives: cost, speed, quality, reliability, and flexibility through the use of modern technological tools. Some quality objectives include the customer satisfaction rate, _______ ________, and the level of product returns. Companies may emphasize different operational objectives, often related to their competitive strategy. Operating objectives are short-term goals and, with their achievement, a company is getting closer to its long-term objectives.
Operational objectives include achievable, action-oriented, short-term objectives to meet long-term objectives. Operating objectives are specific, measurable goals that a company sets for its daily operations. This could involve setting operational objectives, such as reducing waste, improving quality control, and streamlining the production process. The objectives of production management are to “produce goods and services of the right quality, in the right quantities, on schedule, and at minimal cost.
There is nothing better than a very satisfied customer, the operational objectives guarantee it exactly, combined with a quality product. Operational objectives are defined as achievable, action-oriented, short-term goals that a company sets and achieves to achieve its long-term objectives. .