Operational Performance
According to Truong et al., (2017), supply chain management have both direct and
indirect impact on operational performance of the business organization. By
implementing practices such as risk management and resilience, supplier-customer
relationship management, and customer focus, the entity can generate significant boost
of the operational performance of the entity. This concept will not only boost the entity’s
operational performance but it is also helped entity to gain competitive advantage
towards global competitors as supply chain management can make the entity
sustainable.
A company's bottom line can be significantly enhanced by establishing in place a
performance improvement program. Considering its simplest form, this operational
performance measurement technique provides effective outcome. Managers may swiftly
put into action the principle, which it can help them to control the market, enhanced
performance, boost their own productivity, and ultimately efficiency of the operation. In
the context of operational performance measurement, increasing total productivity
involves figuring out how to improve outcome in relation to the input across all
organizational resources. Implementing operational performance measurement
effectively ensures the company to get the best result they want (Kaydos, 2020).
The relationship between total quality management (TQM) practices and operational
performance can be defined as deeply and complex. Leadership, people management,
and customer focus are the some of elements of the total quality management that are
significantly affect the total operational performance of the entity. It also enhances the
product quality, provide customer expectation, and also streamline the operations of the
entity. It will also provide the entity competitive edge as it minimized the cost while
maintaining the quality of the goods or services provide (Oakland, 2014).
Baird et al., (2011) suggests that they are so many factors affecting operational
performance of the company but they found out that teamwork and respect for people
are the key role components to achieve high operational performance. Organizational
culture plays significant role also in total quality management by contributing
achievement to the desired result to the operations of the company. Respect creates
greater innovation and creativity of the employee. Employees are more likely to be
productive and efficient if they are contributing or be part of the innovation of the
company and to be able to achieve that psychological safety, it must be employees are
respected to be who they are.
The operational performance related to the supply chain's non-financial performance.
The study of operational success has not included financial issues, such as asset
management. The delivery of goods and services to consumers, cost containment, and
maintaining improved quality levels are all necessary for the supply chain to function
efficiently. Businesses that are not aware of the success elements for maintaining low
supply chain costs may find themselves in a precarious scenario and ultimately fail.
Lower supply chain costs are necessary, as is a better standard of quality and reliability,
incorporation of flexibility, and responsiveness—which is defined as a short response
time to market concerns or changes—as stated by (Wu et al., 2014).
According to Tarigan (2018), performance is defined as an organization's working result
recorded over a certain time period and acquired with assessing the quantity and
quality of the organization. Operational performance is the outcome of how well and
how much an organization's personnel accomplish in carrying out their obligations in
accordance with those assigned to them. The organization's internal operations,
including satisfaction among clients, product quality, and productivity. The growth and
innovation that occur within the company and can sustain its financial performance in
the future are also linked to operational performance.
Operational performance was chosen as one of the variables for several reasons. First
off, a lot of research is focused on operational performance since it is a key facilitator of
supply chain performance. Second, the digital supply chain may have an impact on
operational performance, a measurable variable. Thirdly, it is undeniable that a number
of the performance measuring systems now in use depend heavily on operational
performance. Due to its unique focus cost of the supply chain, responsiveness, agility,
and reliability of the supply chain. which is not the financial side of a firm's performance,
operational performance stands out from other performance scales (Yu et al., 2013).
Reference
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