Check Sheet – A Basic Six Sigma Tool
A check sheet is a simple tool that was once a part of the seven basic tools of six sigma. It is said that check sheet has become obsolete because of the introduction of software which have the capability to record high volumes of data and present them in a format as required. The check […]
The New Economics of the Music Industry
The economics of the music industry has been radically changed in the past two decades or so. Ever since the internet became a reality, music could be shared for free. The entire industry faced the onslaught of the latest developments in web technology. Companies like Napster encouraged piracy and allowed users to download and share […]
How to Use a Fishbone Diagram
The fishbone diagram, which also goes by a couple of other names like the Cause and effect diagram and the Ishikawa diagram is one of the seven basic tools of quality management. It has wide ranging applications in almost all six sigma projects. The Fishbone diagram is a simple but highly effective tool in problem […]
How the Government Should Manage Natural Disasters
Natural disasters are a difficult reality. Regardless of our beliefs, these disasters such as earthquakes and floods have a huge impact on our lives in every part of the world. Every year, people all over the world face several disasters. The lives of many of these people are completely destroyed as a result of these […]
What is Project Management?
A project in any organization is collaboration across departments to achieve a single well defined objective. The process of planning, organizing and managing resources to achieve the organizational objective is called project management. Project management is very important in production of goods and services. Idea generation to final production of product or service, each step […]
It is very important for an organization to have well defined objective. A well-defined objective facilitates development of strategies and policy thereby creating value for customers.
Operational strategy is essential to achieve operational goals set by organization in alignment with overall objective of the company. Operational strategy is design to achieve business effectiveness or competitive advantage.
Operational strategy is planning process which aligns the following:
In this global competitive age organization goal tend to change from time to time therefore operations strategy as a consequence has also be dynamic in nature. A regular SWOT analysis ensures that the organization is able to maintain competitive advantage and business leadership.
For success of organizational strategic objective, strategic planning has to trickle down to various function areas of the business. In order to build strategy management process a sequential process as below is followed
Competition Analysis: In this step company evaluates and studies current competition in the market and practices that are followed in the industry for operations and production vis-a-vis company policies
Goal Setting: Next step involves narrowing down the objective towards which the organization wants to move towards.
Strategy Formulation: The next step is breaking down of organizational goals into operations and production strategies.
Implementation: The final step is to convert operations and production strategies into day to day activities like production schedule, product design, quality management etc.
As organizations are always customer-centric, production and operation strategy for organization are built around them
Measurement of formulated operations and production strategy is important to maintain alignment with the organization objectives. In simple terms productivity is defined as sum of total output per employee or per day. Productivity of company is dependent on industry and environmental conditions in which it is operating.
Two essential part of productivity are labor and capital. In scenario of limited resources, optimum and efficient utilization of labor and capital will generate favorable productivity. Productivity measurement also enables company to identify areas which require improvement or special focus. Also productivity provides ready report card to measure status against company’s production objective.
Productivity measurement can be classified in three categories based on the inputs used for calculation. Partial productivity ration of output is compared to one of resource used for example, labor productivity where output is compared to the labor wages.
Total productivity measure takes into consideration sum of all input factors which are used for the output.
In the modern age technology plays an important part in productivity.
Another important factor is the case of production is wastivity. Not 100% of input would be converted to output, there is going to waste during production.
Wastivity is reciprocal of productivity. Classic examples of wastivity are defective products and services which either have to be re-cycle or disposed of completely. Other example is idle capacity of material, man-power equipment etc.
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