Does customer or competitor performance drive operations prioritisation?

Abstract

The purpose of this research is to identify the impact on operations managers of their perceptions of customer requirements and competitor performance on their determination of operations priorities. Data were obtained from a multiple respondent survey. Analysis involved an ordered choice model. The process of strategic prioritisation differs according to the specific performance dimension. Quality-based objectives are focused on the voice of the customer; cost-based objectives are influenced by a balance of importance to customer and performance against competitor. Other criteria (flexibility, dependability, speed) objectives are more influenced by perceptions of competitive benchmarking. This large sample survey of operations managers’ perceptions offers a valuable insight into their motivation for focusing on different operations criteria.

Keywords:

• Operations strategy process
• strategic alignment
• strategic fit
• order winners

Notes

1. Note, for this analysis the number of respondents ranking these five criteria, n = 1810.

2. We use standard maximum likelihood estimation as described in Greene (2008).