Performance objectives Essay

Questions: 1. Discuss the significance of all of the five operations performance objectives (quality, speed, dependability, flexibility and cost) to VBA’s activities and explain which of these you consider to be the most important to build into the design of VBA’s processes 2. Explain how process technology helps this operation to achieve its objectives? 3. Sketch the flow of flowers in the VBA operation. Describe and explain what you think are the critical points in this flow? 1.1Objective Definition (Slack) Significance to VBA’ activities Rank Quality VBA’s service is based on the trust which it has established both with growers and buyers. This involves an implicit guarantee of the quality and freshness of the flowers. For example, VBA invest time and money into the laboratory services which give them the ability to assess flower quality levels. Without this quality guarantee buyers would not be willing to use the service. Speed Obviously the flowers cannot be kept within the total supply chain for too long, otherwise it would reduce their ‘shelf life’ when they†¦ Dependability In this case dependability means that a range and quantity of flowers are available for buyers to purchase if they wish and also that the company are able to guarantee to the growers that flowers will be available for sale at the time promised. Lack of dependability in terms of interruption to the supply of flowers would destroy the trust of both buyers and growers. Cost Cost is an important objective primarily to the company itself. The whole company’s operations are based on high volume. It is, after all, the largest operation of its type in the world. Also, the company have invested in the information technology and materials handling technology which standardizes the service, thus reducing costs further. However, cost is also important to the buyers. If the operation were not efficient, then the buyers may find it cheaper to buy directly from the growers. The transaction costs of VBA must be sufficiently low to prevent this happening. Flexibility United Flower Auctions, Aalsmeer Introduction https://www.youtube.com/watch?v=V2CK2TatM_U We love getting flowers; they are a symbol of celebration. When you have achieved something, when you are turning 21, when you are in love, when you have graduated†¦ Flowers are big business in Holland. The ‘Verenigde Bloemenveiling Aalsmeer’ translates to the United Flower Auction in Aalsmeer. Most of the flowers purchased in the world are auctioned on a daily basis at the Aalsmeer facilities. This happens by bringing supply and demand together by means of the auction clock, a fascinating process during which large and small batches of flowers are sold within fractions of seconds. In five auction halls, over a thousand wholesalers bid on trainloads of flowers as they cruise slowly by. The flower auction in Aalsmeer is the largest trading center for plants and flowers in the world. Around 21 million flowers are sold daily with a 15% increase around occasions like Valentine’s Day and Mothers’ day. The building of the flower auction is only a stone’s throw from Schiphol airport and one of the largest buildings by floor space in the world, it boasts an area of more than 630,000 square meters – bigger than 120 football fields. The five operations performance objectives Performance objectives are the generic set of performance indicators that can be used to set the objectives or judge the performance of any type of the operation, although there are alternative lists proposed by different authorities, the five performance objectives as used in the book of Slack et al. (2010: 40) are quality, speed, dependability, flexibility and cost. These performance objectives are the specific aspects of performance on which an operation is judged. What does the customer think is important? In the case of VBA, the operations performance objectives that are the most important to build into the design process are speed, quality and dependability (reliability). Speed: According to Slack et al. (2010: 42), ‘speed’ is the†¦ Answers to: â€Å"VBA United Flower Auction, Aarlsmeer, Holland† 1. Which of the five operations performance objectives (quality, speed, dependability, flexibility and cost) are the most important to build into the design of VBA’s process and why? To some extent, this is a matter of opinion. However, the company itself would place quality very much at the top of the list and flexibility towards the bottom, as follows: Quality: VBA’s service is based on the trust which it has established both with growers and buyers. This involves an implicit guarantee of the quality and freshness of the flowers. For example, VBA invest time and money into the laboratory services which give them the ability to assess flower quality levels. Without this quality guarantee buyers would not be willing to use the service. Cost: Cost is an important objective primarily to the company itself. The whole company’s operations are based on high volume. It is, after all, the largest operation of its type in the world. Also, the company have invested in the information technology and materials handling technology which standardizes the service, thus reducing costs further. However, cost is also important to the buyers. If the operation were not efficient, then the buyers may find it  cheaper to buy directly from the growers. The transaction costs of VBA must be sufficiently low to prevent this happening. Dependability: In this case dependability means that a range and quantity of flowers are available for buyers to purchase if they wish and also that the company are able to guarantee to the growers that flowers will be available for sale at the time promised. Lack of dependability in terms of interruption to the supply of flowers would destroy the trust of both buyers and growers. Speed: Speed is only important up to a point. Obviously the flowers cannot be kept within the total supply chain for too long, otherwise it would reduce their ‘shelf life’ when they†¦ 1) Analysing VBA’s main activity it is possible to clearly define the 5 operations performance objectives and which of these are the most important for the company’s business and to maintain a leadership position in the sector. the company itself would place quality very much at the top of the list and flexibility towards the bottom, as follows: QUALITY: VBA’s service is based on the trust which it has established both with growers and buyers. This involves an implicit guarantee of the quality and freshness of the flowers: ïÆ'   a quality inspection is in fact made by VBA staff to check if the characteristics of the flowers are conformant to the description entered on the delivery forms by the grower, that are attached to each trolley. ïÆ'   to maintain the flowers fresh and in perfect conditions VBA helds the flowers in cooled storage areas to avoid them to perish Without this quality guarantee buyers would not be willing to use the service. Doing things right by providing error free goods and services, which will satisfy the customers, is known as ‘quality’. VBA operations have to export their flowers to be perishable and so they made the quality inspection by VBA staff and kept in cool storage place. COST: Cost is another very important objective to the company itself. VBA manages to operate with very low costs (about 5% of the turnover). LowCost is also  important to the buyers. If the operation were not efficient, then the buyers may find it cheaper to buy directly from the growers. The transaction costs of VBA must be sufficiently low to prevent this happening. To achieve this performance objective, that allows very high profit for the company, VBA has invested in the information technology and materials handling technology. This standardizes the service and is able to deal with the complexity of the operation due to the high volumesïÆ'   every day in fact there are 17 million cut flowers and two million plants to handle. ompanies compete with prices is ‘cost’. Low price is a universal attractive objective to customers, which can be achieved by producing goods at lower costs. In order to ‘do things cheaply’. The high level of computerization and automation of material flow allow VBA to operate with low cost at high speed and dependability. SPEED: Thanks to its developed process technology VBA manages to achieve another important performance objective: speed. Obviously the flowers cannot be kept within the total supply chain for too long, otherwise it would reduce their ‘shelf life’. For this reason it is important to do things quickly in response to customer demand. This objective is fundamental together with quality and cost because it allows VBA to handle about 1000 transactions per hour with 13 clocks, making it very convenient for the grower aswell. erformance objective speed means doing fast, it means to minimize the time between the order and the availability of the product or service that gives the customer speed advantage.VBA are focused operations to reduce difficulty by having ten thousand people to work at the center to handle seventeen million flowers and two million plants by their information processing technology. DEPENDABILITY : The ability to deliver products and services in accordance with promises made to customers is another important performance objective for VBA. In this case dependability means that: a range and quantity of flowers are available for buyers to purchase if and  when they wish that VBA is able to guarantee to the growers that flowers will be available for sale at the time promisedïÆ'   that the flowers will be in the shops in Holland, London, Paris, Berlin and New York as soon as possible, for the customers to buy them. Lack of dependability in terms of interruption to the supply of flowers would destroy the trust of both buyers and growers. To do the things in time for customers to receive their goods or services when they are promised this performance objective known as dependability. In VBA everything tiered to the auction computer so that each buyer can have uninterrupted view of the flower and price. FLEXIBILITY: regarding this performance objective, the flexibility can be measured in the capability of responding to a dynamic environment, changing their products and services and changing the way they do business. The whole bidding process by VBA including processing time takes only a few seconds and the lots are distributed on the trolleys to the appropriate packing and loading Ares.