As to the selection of the ratios it is advisable that they were small and focused and with readily available data. The reflected performance should be understood by all concerned besides some control should be exercised by those being measured. Measures for one function should be compatible with the corporate measures in use.
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Operations Management relates to efforts taken by the organizational management group to ensure that internal operations go in a well enough manner. The collective aim of these steps is to make sure that products and services are being manufactured and delivered in a timely manner and in desired quality.
The activities falling under this domain are- 'inventory management', 'managing purchases', 'imposing sufficient number of quality controls' and 'storage'.
All the attempts revolve around increasing the efficiency and effectiveness of operations. This gives a large scope for measuring and managing activities. In other words, improving internal operations requires using KPIs (Key Performance Indicators), which are the measurable and countable phrases to which values can be assigned.
Further, one can use these to make sure that internal organization of entities has been the way those are 'supposed to be'.
To state it all, one can keep the whole internal environment in a way that it promotes production of better products and services by using BSC (Balanced Scorecard). On this are packed KPIs in suitably related categories and groups. Once the internal surroundings are improved, one can hope for similar changes in the activities that follow.
This is the actual scorecard with Operations Measures and performance indicators. The performance indicators include: profit making orders rate (%), loss making orders rate (%), internal perspective, equipment/facility effective performance (%), growth and development perspective, lost workday injury severity (lwis), personnel participating in regular advanced training (%), number of customer complaints, frequency of order backlog (%), service level percentage (%).
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