Performance Objectives

Operations Management – Shiraz Kuwailid

Performance Objectives

•Quality• Speed• Flexibility•Dependability•Cost

Figure 1: Value Chain Analysis, Porter (1998)

Process – Ceylon Leather Products

Process – LB Finance PLC

Quality - Consistent conformance to customer expectations

(Slack et al., 2013, p. 47)

Quality Management Practices - Ebrahimi and Sadeghi (2013)

1. Human Resource Management

2. Customer focus and satisfaction

3. Top Management commitment and leadership

4. Process management5. Supplier quality

management6. Quality information

analysis7. Strategic quality

planning

Quality Improvement

Figure 2: Ishikawa Fishbone Diagram, Source: Ishikawa, K. (1990)

Competitor Analysis

Quality

Speed

FlexibilityDependibility

Cost

Banking Services

LB Finance HSBCQuality

Speed

FlexibilityDependibility

Cost

Leather Goods Manufacturing

Ceylon Leather Louis Vuitton

SPEED‘the elapsed time between customers requesting products or services and them receiving them’ Slack et al., (2009) Service organization- LB finance Gold loans Special bill payments Call centre Mobile application

Manufacturing organization – DI leather

Clicking or cutting

dept

Closing or machinin

g dept

Lasting and

making dept

Finishing dept and

shoe room

New shoe pattern : 4 to 6 weeks

Production order of 5000 pairs : average 90 days

Flexibility

Volume Flexibility - Business volume increased by 13.75% (LB Finance

annual report 2014/15).

Delivery Flexibility - 100 branches island wide and 35 gold loan centers

totaling 135 outlets for flexible delivery services.

Flexibility

Product flexibility - Customized leather product (Shoes)

Mix Flexibility - wide range of products to choose

Issue in Delivery Flexibility

only 9 retail outlets – Union Place, Liberty plaza,

Bambalapitiya, Wallawatta, Pettah, Fort, Kiribathgoda, Gampaha,

Belummahara

Recommendation –

Open new retail outlets in urban cities.

CostAn amount that has to be paid or given up

in order to get something

Cost• Fixed cost • Variable cost

LB Finance PLCTwo Main types of Costs:• Interest rate expenses• Operational cost

In 2014 they reduced their Interest rate cost by 17% Operational cost increased by 23.8%

Ceylon leather Products PLCSteps taken by the company to reduce their production cost• Obtain bulk orders• Effective budgetary controls• Increasing productivity• Developed multiple and alternative suppliers

References1. Ebrahimi, M, and Sadeghi, M (2013) Quality management and

performance: An annotated review, International Journal of Production Research, 51, 18, pp. 5625-5643, Business Source Corporate, EBSCOhost, viewed 1 November 2015.

2. Ishikawa, K. (1990). Introduction to Quality Control. Tokyo: 3A Corp.3. Porter, M. (1998). Competitive Advantage: Creating and Sustaining

Superior Performance. New York: Free Press.4. Slack, N., Brandon, A. and Johnston, R. (2013) Operations

Management. 7th edn. United Kingdom: Pearson.