Operational Efficiency and Operational Effectiveness
Operational efficiency and operational effectiveness are critical terms when measuring organizational performance.
Operational effectiveness is concerned with the strategies that an organization puts in place in order to achieve sustainable growth within its business domain (Jacobs & Chase, 2013).
Typically, a successful organization is the one that can live up to its vision and mission statement, and thus it is able to offer goods or services that meet its customers’ expectations.
Operational effectiveness also refers to the ability of an organization to deliver products or services that are superior to those of its competitors. It is a practice that generally guarantees better use of resources that belong to the organization.
Operational efficiency, on the other hand, is generally defined by the output produced per unit of input (Jacobs & Chase, 2013). Although this definition appears straight forward, it only takes on meaning with respect to a particular economic unit or activity.
For example, to define what constitutes banking efficiency is quite problematic as it depends in part on what an analyst thinks the banks are supposed to do. The output over input definition may emphasize the size of the output-input margin, thus viewing the bank itself as a generator of profits.
Alternatively, the definition can view input costs as variable, holding output fixed, and thus viewing the bank as a locus of costs control.
Operations Strategy and Operational Sustainability
An operations strategy is a blue print that describes how an organization has positioned itself to meet set objectives. It further details the accompanying actions that a company must take in line with its main goals (Jacobs & Chase, 2013).
It is one of the functional strategies that refers to a collection of operations that mainly relate to choosing resources and processes and building organization’s future capabilities. Operations strategy needs to consider integration as well as other functional strategies.
It also must be aligned with the business strategy. Operational sustainability is the type of operations that allows an organization to effectively address its current needs without minimizing its capability to meet future needs.
If a company endeavors to satisfy its customers with its products and services, it must do so in a way that ensures organization’s progressive growth in future.
Quality as Used in the Organization
Generally, the concept and definition of quality are elusive as people tend to have their own understanding of what quality is.
Some consider quality as a superiority or an excellence of a product or a service; others view it as a lack of manufacturing or service defects, while the rest describe quality as something related to product features or price.
Quality in an organization may also be regarded as the completeness of a product or a service with respect to its characteristics.
Technically, it may refer to the unique features of a product or a service that make it outstanding or the absence of the shortcomings. Ordinarily, organizations pursue quality in order to satisfy the needs of customers.
Six Sigma and Its Value
Six Sigma is a methodology employed by organizations to reduce or eliminate mistakes, while ensuring that value is realized. Initially, however, Six Sigma was a methodology for quality improvement.
Any mistakes made by an organization result in customers being lost, repetition of tasks, and wastage of time and resources.
Though its implementation requires discipline and hard work, Six Sigma allows a company to improve the quality of its services or products. It uses metrics to calculate the success of everything an organization does.
Reference
Jacobs, F.R. & Chase R.B. (2013). Operation and Supply Management: The Core. New York, NY: McGraw-Hill Irwin.