4 Dimensions of Performance
These four performance dimensions give us opportunity to differentiate our operations from
other, thereby potentially providing us with a competitive advantage.
- Cost Dimension
- Variety
- Quality
- Performance quality measures how good of a product or service we provide.
- Conformance quality. It really captures to what extent we’re able to deliver on the promise that we have made to the customer.
- Timeliness
Strategy guru, Michael Porter, suggested there are two ways in which an organization can get a competitive advantage. Either through cost leadership or through differentiation. The dimensions — variety, quality and timeliness — are three ways in which your operation can differentiate itself from others. Thereby, by coming up with a great operation, you are really creating your firm competitive advantage.
We cannot have it all. Just like in normal life we have to set priorities. A business has to prioritize some of the four dimensions of operational performance. Cost, quality, variety and responsiveness.
Introduction to Operations Management by Christian Terwiesch
