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Operations Management Metrics Essay

982 words - 4 pages

Operations Management Metrics

Operations Management Process is the central arteries within the organization because it produces the planning process for goods and services, which are its reason for existent. Operations management is linked to all organizations as every organization is producing either a product or a service. However, it cannot be said to be the most important function since there are other functional areas and boundaries within an organization. In today's fast changing world, organizations have to have a tendency towards being efficient, effective and innovative to the changing environment to succeed. Operations Management has to use metrics in order for them to accomplish their task and be successful with minimal interruptions within the organization.
Metrics are very important in Operations Management within an organization because it provides functions such as control, reporting, communication, opportunities for improvement and expectations. It is a certifiable measure stated in either quantitative or qualitative terms types of measurements. In addition, metrics has different types of categories in the organizations. One of which is “Organizational Focus”, that have four different types of level within the organization or firm. 1. Organizational Metrics – this type of measure, capture and describe the performance of an organization (i.e.…market share and rate of return). 2. Product Metric – it measures cost per unit, contribution margin per unit, or growth in sales.
3. Functionality – it can measure the performance of a group such as purchasing or services or manufacturing. 4. Activity/Individual metrics – metrics that are specific to a person or activity (Vickery 1999).

Different types of metrics that are very much in use in today’s modern industry are Six Sigma, Total Quality Management, Benchmarking, and SCOR or Supply Chain Operations Reference just to name a few. Six Sigma is a business metrics that seeks to identify and eliminate causes of errors or defects as well as failures in business processes by focusing on output that are critical to customers (De Feo, Barnard 2004). It is also a measure of quality that strives to eliminate defects using the application of statistical methods. In this case, a defect is defined as anything that could lead to customer dissatisfaction. Six Sigma’s statistical quality control is the method used to measure variability in a product for evaluation and corrective actions. When the product metrics exceeds the bounds of acceptability, based on statistical inference, the product can be rejected with reasonable assurance that does not meet requirement. It aims to identify and eliminate waste in order to increase speed and flow from start to finish. It also identifies the critical steps, and deleting those not required or nonessential. There are so many metrics process in today’s business industries but the metrics that Six Sigma’s...

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