2. The Goals of Operations: Speed, Flexibility, Quality, and Cost


The Goals of Operations. In supply chain, operation refers to the process of transformation. We transform input, raw material, machinery, and labor into outputs, our finished products. When we look at how to make operations better, we focus on four primary goals. Cost, quality, speed, and flexibility. Now in reality, most companies will focus on a number of these goals, but you have to make trade-offs. For example, your priorities will be different if you make $100 pens such as this one, versus $0.25 pens such as this one. You can achieve this by creating economies of scale. That is, you make a lot more and each unit will be cheaper to produce. There are over 6,000 Walmart stores all over the world. If you want to sell your products here, your main operation’s objective will be how to make your product at the lowest cost. And you can achieve this through economies of scale. A cheaper product will be more attractive to customers and more of them will buy it. You’re going to earn more money on each unit because it’s cheaper, and you’re going to sell a lot more. Therefore, your profit will be much larger. [SOUND] Time is money. Most companies do not have unlimited resources. You only have so much capital. You only have so much land. You only have so much machinery to build with. So if you want to produce more product, you have to be able to do it faster. Companies such as Zara have made speed their priority. And they’ve gained a competitive advantage by being able to see trends in the marketplace and react to them very quickly. Zara can bring a brand new product on to the marketplace much faster than most of their competitors can, and that enabled them to grow into one of the largest clothing retailers in the world. [SOUND] Quality control is another important objective in some companies’ business model. For example, Motorola was the winner of the first Malcolm Baldrige Quality Award, which was awarded to companies that have made quality one of their key priorities throughout their organization. Motorola’s goal was to produce perfect products across the organization.
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That has several benefits. Not only did they not waste resources in producing items that were going to be defective, but they also saved a lot of time. And it saved them money in the end, because you don’t just have to throw out products. Because consumer needs change over time, some companies choose to prioritize flexible manufacturing systems. Otherwise, you could just focus on cost, speed, and quality alone.
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What I’m talking about is a manufacturing system that is able to produce ion item or 10,000 items and just as efficiently. And most traditional manufacturing systems are really just made for one speed and one speed only. If you push them too fast or make them go too slow, they don’t work very well. Now how do companies make their operations better? They use of technique called optimization. Now in optimization, you have to define your objective. It may be to minimize cost, increase speed, achieve perfect quality or more flexibility, nevertheless, you have certain parameters that you can change. You change the way you use machinery. You can change the order of production. You can change what level you use for each machine.
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But, you cannot change them too much. There are certain constraints placed on your operations. You can’t just build another factory. So within those parameters and constraints, you’re seeking to find the best solution possible.
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And that is how you get your operations to be more efficient and more effective.

Jim Rohn Sứ mệnh khởi nghiệp