The Five Generic Performance Objectives are often used as a framework to guide an organization’s operations strategy. They are:
- Quality: The ability of a product or service to meet or exceed customer expectations. This objective includes both the quality of the finished product or service as well as the quality of the processes and systems used to produce it.
- Speed: The ability to deliver products or services quickly, in order to meet customer demands or beat competitors to market. This objective includes both the speed of production and the speed of delivery.
- Dependability: The ability to consistently deliver products or services on time and to the required quality. This objective includes both the dependability of the production process and the dependability of the delivery process.
- Flexibility: The ability to adapt to changing customer demands or market conditions by quickly adjusting production processes or introducing new products or services.
- Cost: The ability to produce products or services at the lowest possible cost. This objective includes both the cost of production and the cost of delivery.
These objectives are closely related, and achieving high performance in one area can have a positive impact on performance in other areas. For example, a focus on quality can lead to increased customer satisfaction and increased sales, which can in turn lead to increased profits.
Five Generic Performance Objectives advantage and disadvantage
The Five Generic Performance Objectives have advantages and disadvantages depending on the organization’s goals and industry.
Advantages of Quality objective:
- Improved customer satisfaction and loyalty
- Increased sales and market share
- Reduced costs associated with warranty claims and product returns
- Improved reputation and brand image.
Disadvantages of Quality objective:
- Increased production costs due to the need for higher quality materials and stricter quality control processes
- Reduced speed and flexibility in adapting to changing customer demands or market conditions
- Increased costs associated with training and maintaining skilled workers.
Advantages of Speed objective:
- Increased market share and sales by being the first to market with new products or services
- Improved customer satisfaction by meeting urgent demands or short lead times.
- Improved reputation and brand image.
Disadvantages of Speed objective:
- Reduced quality due to the need to rush products or services to market
- Increased costs associated with expedited production or delivery
- Reduced flexibility in adapting to changing customer demands or market conditions.
Advantages of Dependability objective:
- Improved customer satisfaction by consistently delivering products or services on time and to the required quality
- Increased sales and market share by building a reputation for reliability
- Reduced costs associated with missed deadlines or poor quality products.
Disadvantages of Dependability objective:
- Increased costs associated with maintaining strict production and delivery schedules
- Reduced speed and flexibility in adapting to changing customer demands or market conditions
Advantages of Flexibility objective:
- Improved ability to adapt to changing customer demands or market conditions
- Increased sales and market share by quickly introducing new products or services
- Improved reputation and brand image by being seen as innovative and responsive.
Disadvantages of Flexibility objective:
- Increased costs associated with maintaining a flexible production process
- Reduced speed and quality due to the need to make frequent changes to production processes
Advantages of Cost objective:
- Increased profitability by producing products or services at the lowest possible cost
- Increased market share and sales by offering lower prices than competitors
- Improved ability to compete in price-sensitive markets
Disadvantages of Cost objective:
- Reduced quality due to the need to use lower-cost materials and processes
- Reduced speed and flexibility in adapting to changing customer demands or market conditions
-
Reduced reputation and brand image if the low cost is seen as a sign of poor quality.