Business Operations Management By Tesco - Essay Example

? BUSINESS OPERATIONS AND SYSTEMS By number and of PART BUSINESS OPERATIONS MANAGEMENT BY TESCO: Tesco has been operating in retail industry of UK and has been one of the best UK retailers (Arch, 2010). Increasing competition and changing environment have resulted in putting extra pressure on the retailer to manage the overall operations in effective and efficient manner. In this regard, the most important element is to understand the operations management and the essentials components for effective business operations management (Chase & Aquilano, 1977). In the case of Tesco, the main aim or focus of all operations of the retail organisation is to make sure that all products are provided to the customers on time according to their needs and requirements. For this purpose, it is first important to identify the essential components for the effective business operations management (Loader, 2006). Essential Components for Effective Business Operations Management: The essential components of the business operations for any departmental or retail organisation are divided into three categories i.e. input, processes, and output. Some of the most common inputs in this regard are: products for sale, information, sales staff at the retail outlet, and the customers. The important processes are of procurement and storage of the products, displaying products, providing advices for sales or purchase, and selling products. Lastly, the output is satisfying the needs and requirements of the customers by providing them with required products and goods (Schonberger & Knod, 1991). These activities of retail organisation constitute the overall supply chain (Charvet, F, Cooper, M & Gardner, J 2008). There are different stages and strategic players in the supply chain. In order to devise and effective supply management strategy there should be integration in the all stages and players. The essential components or drivers for the effective supply chain management are: inventory, facilities, transportation, information, pricing, and sourcing. All these elements and drivers should be managed in such a manner that there is a strategic fit between the organisational objectives and consumers’ demand (Halldorsson, Kotzab, Mikkola, Skjoett-Larsen, 2007). BUSINESS PROCESS MANAGEMENT AND SYSTEMS APPROACH: In order to understand the business process management, first it is important to comprehend what is meant by the process. The process is believed to be an approach or method of converting the inputs into outputs. Processes are different actions or tasks which facilitate the conversion of inputs into outputs. This approach of process has been derived from the systems approach of the business. In the systems approach of business, three most important factors are inputs, transferring processes, and outputs. In order to improve the overall business system there is continuous flow of information and feedback (Zairi, 1997). (Barlow, 2005) Business process management is the method of analysing and improving the important tasks and activities of the organisation which convert the inputs into outputs. These activities or functions include production, communication, marketing, procurement, and several other important factors of the overall operations of the organisation (Barlow, 2005). Organisations are getting more concerned about the business process management in order to become more customer focused and to be able to respond to the changing needs and requirements of the target customers in more effective and efficient manner (Krajewski, Ritzman, & Malhorta, 2007). Business process management is all about improving the overall operations and processes of the organisation by optimising the resources available and minimising the impacts of different external and internal elements on the output and productivity (Barlow, 2005). IMPORTANCE OF EXTERNAL ENVIRONMENT IN BUSINESS OPERATIONS MANAGEMENT: Organisations are conducting their businesses in the dynamic environment, therefore there are several factors in the external environment which directly affects the business operations. Different environmental elements have different impact on the operations of the organisation. In order to remain competitive and survive in the industry, it is important for the organisations to identify important environmental factors and respond to them. It is essential for all organisations to keep a track of the external environment and come up with different strategies and plans in order to cope up with the challenges imposed by the external environment. Sometimes external environment also provides the business with different opportunities for growth and development. Hence, organisations should ensure that there is a continuous improvement in the business processes and overall business operations in order to respond to different factors and elements in the external environment (Loader, 2006). SYSTEMS DIAGRAM: PART 2: BUSINESS PROCESS PLAN IN ORDER TO DEAL WITH THE ENVIRONMENTAL OR TECHNOLOGICAL CHANGE: In order to overcome the above mentioned technological and environmental changes, Tesco should work to improve and enhance the business processes accordingly. For the retail organisations, the most important element is the effective and efficient supply chain management. The supply chain consists of different strategic partners and involves different steps and processes. It is because of the effective and efficient supply chain that retail organisations are able to meet the demand of the customers on timely basis (Chopra, Meindl, & Kalra, 2008). The supply chain consists of following stages and processes flow: (Chopra, Meindl, & Kalra, 2008) For Tesco, important business processes includes: 1. Procurement process 2. Warehousing process 3. Transportation and distribution process 4. Retail operations process 5. Transfer of information The procurement process involves important decisions related to sourcing, selection of suppliers, and ensuring that the there is no stock out. The warehousing processes involve the decisions related to storage of the products and the storage facilities. The transportation process and distribution processes consist of the activities related to the transportation of the products from suppliers to warehouses and distribution centres and finally to the retail outlets. Retail operations processes involve all activities at the retail stores including the staff management, sales management, display of goods, etc. All these processes are supported and facilitated by the transfer of flow of information between them. The effective and timely flow of information enables the retail organisation to respond to the changing needs and requirements of the customers in timely manner and increase the overall responsiveness of the supply chain (Cooper, M, Lambert, D, & Pagh, J 1997). Within the retail operations processes, the objectives of Tesco are: 1. To ensure that all required products are available in considerable amount in order to fulfil the customer demand and avoid stock outs. 2. Timely availability of the products and no or less waiting time for the customers. 3. High quality products which are according to the preferences of the customers. 4. Attractive display and assortment of the products. 5. High quality customer relationship management. One of the important factor which will facilitate the process of achieving all above mentioned objectives is the information management. Effective and timely flow of information within all stages and process of the operations and supply chain will in turn result in effective business process management (Gundlach, Bolumole, Eltantawy, and Frankel, 2006). At the same time the changing technological environment is putting excessive pressure on Tesco to incorporate new technologies in the business operations. Some of the new technologies and information systems which can be used by Tesco in order to improve and enhance the business processes are: Electronic Data Interchange (EDI): the Electronic Data Interchange will enable the retail organisation to place quick orders with the suppliers for the products which are required. This new technology reduces the time involved in the process of ordering for new products. Also this reduces the chances of stock outs (Halldorsson, Kotzab, Mikkola, Skjoett-Larsen, 2007). Enterprise Resource Planning (ERP) and Management Information System (MIS): these information systems allow the organisation to keep a track of all activities and business operations. Also, these information systems provides the management with the important information in order to take relevant and important decisions about the business process management and operations management (Halldorsson, Kotzab, Mikkola, Skjoett-Larsen, 2007). Radio Frequency Identification (RFID): the Radio Frequency Identification (RFID) tools allow the retail organisation to keep a track of the sales. Along with this RFID allows the organisation to understand the changing preferences of the customers and predict the future behaviour (Halldorsson, Kotzab, Mikkola, Skjoett-Larsen, 2007). All these technologies and information systems allow Tesco to improve all business processes and achieve all objectives and makes the supply chain more responsive, flexible, and agile. Tesco can use this technological tools in order to enhance some of the performance indicators which are: 1. Speed 2. Cost 3. Quality 4. Flexibility and agility 5. Dependability The business process plan should be formulated keeping in the view the operational objectives and the operational performance indicators. The overall supply chain structure has to be integrated with the organisational strategy, supply chain strategy, and competitive strategy (Krajewski, Ritzman, & Malhorta, 2007). The business processes should be designed in such a way that supply chain is highly responsive and low cost is associated with all supply chain processes. There is always a trade off between the cost efficiency and responsiveness of the supply chain, however both factors can be achieved by careful utilisation of the changing technologies and information systems. This will allow the retail organisation to achieve internal efficiency and at the same time satisfy the demands of the customers. PART 3: ENVIRONMENTAL OR TECHNOLOGICAL CHANGE BEING FACED BY TESCO: In the case of Tesco, the UK retail organisation has been facing intense competition from other retail organisations like ASDA. ASDA, being a subsidiary of Wal-Mart, has the one of the best supply chain and operations management system in the world (Berg & Gray, 2011). In addition to these competitive forces, one of the most challenging environmental element is the changing technology and its impact on the overall business. Customers are now becoming more demanding and time conscious (Aldin & Stahre, 2003). This calls for highly responsive supply chain and operations management. Biggest dilemma or challenge being faced Tesco at the moment is to increase the overall responsiveness of the supply chain and at the same time reducing the overall cost of the supply chain i.e. making the supply chain more efficient. Different retail organisations have been able to overcome this challenge by the implementation of different new technologies and information systems. Tesco, should work to improve and enhance the information system and should implement new technologies at the store. This will result in making the supply chain more flexible, responsive, and agile. Along with this, there has been growing concern about the sustainable and green supply management. The customers are now becoming more aware and concerned about the hazardous and negative impacts of different operations and demand more environmental friendly operations. In this regard, Tesco has to focus on developing more sustainable and green supply chain. RECOMMENDATIONS ON RESPONDING TO THE ENVIRONMENTAL OR TECHNOLOGICAL CHANGE: Some of the recommendations which can be used by Tesco in order to respond to the above mentioned technological and environmental changes are: 1. In order to improve the overall responsiveness and agility of the supply chain, Tesco should use different technologies and information systems. This will result in improving and enhancing the overall business process and operations. For instance, Radio Frequency Identification (RFID) along with the Electronic Data Interchange (EDI) will allow Tesco to keep a track of the sales of different products. Along with this, these technologies will allow the retail organisation to identify and analyse the changing needs and preferences of the customers. In this way, Tesco will be able to provide the customers with the products they want. These technologies will also facilitate the retail organisation in the process of selecting appropriate assortment of the products according to the sales trends and the requirements of the customers in the region (Chopra, Meindl, & Kalra, 2008). 2. Tesco should use different technological methods in order to facilitate the process of calculating and analysing the queuing time, i.e. customer has to wait for how long for the order processing. This will allow the retail organisation to improve the retail operations processes in order to make sure that the waiting and queuing time for each customer is reduced. It is annoying for the customers to wait in the long lines. This is one of the most important element of the business operations of any retail organisation. As, due to this issue of long lines and waiting times in traditional shopping customers have shifted towards online shopping and ecommerce. This method will also enable the organisation to increase the agility of the supply chain and business operations (Chopra, Meindl, & Kalra, 2008). 3. The changing preferences and environment have resulted in making the customers more demanding. In order to attract and retain more customers there should be efficient and effective customer relationship management. This can be achieved by the implementation of different technologies and information systems. RFID and EDI can prove to be a significant source of relevant data and information about the customers. This information can be processed through ERP and MIS information systems in order create a database for the customers and come up with important strategies and plans for building long term relationships with the customers. These systems will also allow the retail organisation to build strong relationships with the suppliers and other important strategic partners (Chopra, Meindl, & Kalra, 2008). 4. Tesco should use the new technologies to link and connect all retail stores with the warehouses and distribution centres. In this way the process of procurement, transportation, and distribution can be enhanced and improved. This integration and sharing of information will result in providing the warehouses and distribution centres with important and required information about the inventory management and reordering the products from the suppliers and manufacturers. This integration will also be beneficial in the process of reverse logistics, which is an important and crucial part of the retail organisations. This information management through new technologies and information systems will result in making the process of transportation and distribution more smooth and there will be no or less delays (Chopra, Meindl, & Kalra, 2008). 5. Finally, in order to make the supply chain more sustainable and green Tesco has to partnership with the suppliers and transporters in order to reduce the overall negative impacts of the supply chain on the environment. For this purpose, Tesco has to support the suppliers in the process of making the activities more efficient and effective. Along with this, Tesco has to implement total quality management and six sigma not only in its own business processes and operations but also have to encourage the suppliers and manufacturers to follow such practices. This can be in turn support by the business process re-engineering and making them more responsive and cost effective. All these recommendations are related with relationship management, technology management, and knowledge management which in turn will facilitate the organisation in the process of accomplishing the operations objectives and excellence (Loader, 2006). These recommendations will also allow the organisation to come up with more effective strategies and decisions related to operations management and business process management. Also, these recommendations keep in consideration the important external and internal factors which will have direct impact on the strategies and operations of the organisation (Jeston & Nelis, 2008a). In order to be successful, the organisation should come up with operational goals and visions and should strive to achieve through business process management and re-engineering of the core business process. The strategies for business process management and improvement should be supported by the infrastructure and other facilitates available and should be formulated keeping in mind the requirements of the important stakeholder i.e. customer (Jeston & Nelis, 2008b). 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