Within a business or manufacturing operation, you may have a situation that pertains to your net income increasing but your operating expenses are increasing as well.
You could also have your gross profit stay the same, every year, but your operation expenses are steadily increasing as well. Both of these scenarios are not necessarily good, and they may be easily missed by focusing only on the gross and net incomes of a business. This is where operational performance comes into play within your manufacturing operation.
Objectives of Operational Performance
Operational performance objectives are areas of performance that a company tries to improve, in a bid to meet corporate strategy. After defining corporate strategy, a company will identify the relevant operational performance objectives to measure and configure the environment, to enable the objectives to be accomplished. It is important to understand the objectives of operational performance within a manufacturing operation in order to boost production efficiency within your overall operation. These objectives of operational performance include the objectives such as speed, quality, costs, flexibility and dependability, which are explained below:
- Objective of Speed - The objective of speeds measure how quickly a company can deliver products and generates sales quotes. This objective will be concerned issues such as the time that it takes to manufacture and process one or more production of the company or the amount of time that it takes to research a new product and develop it. Speed is extremely important within manufacturing operations and is a clear indicator of how efficient your operation is.
- Flexibility of Operations - Flexible operations are operations that pertains to configuring product lines to deal with various requirements and to also adjust these product lines quickly to new requirements. Flexibility lies closely to the speed objective, in which a company should be able to produce various quality products while also adapting to the operations in order to adequately suit different market conditions.
- Quality of Product - Quantity usually measures how well a product conforms to specifications. While this is important, it is much more than that, and the quality of the product is also extremely important. Having a desirable product that is reliable, durable, can easily be serviced, performs well, and your customers believe in it is definitely a substantial component within the objectives of performance. All of these are relevant measures of quality.
- Costs Variation - Cost variation pertains to the objective of how much variation there is in the unit cost of a product as measured by changes in a variety of factors. These factors include volume and the variety of the products. Products that feature a wide variety of features tend to sport lower volumes and higher unit costs. This affects the price of the product as well as the costs of producing it, and the profits to be obtained from the product.
- Dependability - Dependability is a huge component within operations and operational objectives. Dependability is an operational performance objective that measure how dependable the company is when it comes to timely delivery of product to customers in accordance with planned prices and costs. A product’s ability to function in an intended way over a period of time is also a measure of dependability.
A software that can aid your day to day operations within a production facility is PlanetTogether’s Advanced Planning and Scheduling Software (APS). Advanced Planning and scheduling software is a visual scheduling system that allows you to have thorough visibility into your production process and manipulate areas of production that are in need of efficiency enhancement. PlanetTogether’s Advanced Planning and Scheduling Software (APS) is a must for modern day manufacturers that are seeking to take their operation to the next level in terms of operationally efficiency, cost reduction, waste elimination, and more. APS software can easily be integrated into manufacturing operations around the globe.
Advanced Planning and Scheduling Software
Advanced Planning and Scheduling (APS) software has become a must for modern-day manufacturing operations due to customer demand for increased product mix and fast delivery combined with downward cost pressures. APS can be quickly integrated with a ERP/MRP software to fill gaps where these system lack planning and scheduling flexibility and accuracy. Advanced Planning and Scheduling (APS) helps planners save time while providing greater agility in updating ever-changing priorities, production schedules, and inventory plans.
- Create optimized schedules balancing production efficiency and delivery performance
- Maximize output on bottleneck resources to increase revenue
- Synchronize supply with demand to reduce inventories
- Provide company-wide visibility to capacity
- Enable scenario data-driven decision making
Implementation of Advanced Planning and Scheduling (APS) software will take your manufacturing operations to the next level of production efficiency, taking advantage of the operational data you already have in your ERP.
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Topics: operational performance