Management business operation - Essay Example

? Management Business Operation AFFILIATION: Management Business Operation Operations Management is one of the most important functions of any business or corporation. Organisations need to plan all their operations, carefully devise strategies and design processes to achieve success in their aims and objectives which they have developed for their firm (Slack, Chambers & Johnston, 2010). The business owners analyse the processes, the actions, and decisions coming up with ways to improve these processes as a result of their outcomes. The ultimate goal of any corporation is profit maximisation and so all brainstorming, assessing, reassessing, reforming of strategies, policies etc is aimed towards the objective of maximising profits. In the food and retail industry, operations management is of utmost importance as it ensures that the retail stores and grocery shops have an efficient operations logistics system (Anupindi et al., 2012). In order to develop an excellent system, it is mandatory for every organisation to seek help from experts of the field who will ensure that adequate guidance is provided to the retail owners. There are various models used by corporations for managing their operations and the latest one is ‘4Vs Analysis’ model (Slack et al., 2008). The 4 Vs model is a benchmark for measuring the success of a corporation. The four important processes in the order of importance are as follows: They are volume, variety, variation and visibility. Volume refers to volume of production; high volume of production will allow the business to gain expertise in the specific area. Variety and variation, says one firm should produce different types of products and variation is all about adaptability to the customers’ needs. Visibility talks about improving communication between the customer and the manufacturer (Slack et al, 2009). The Cooperative Group has the ranking on fifth position amongst the largest retailers of the United Kingdom. Lately the company is faced with a noticeable slump in their annual sales and profits. Numerically, its annual sales have dropped from GBP 142 mn to GBP 119 mn and food stores sales went down by 2.2%. One of the reasons for this is the competition prevailing in the United Kingdom amongst the retail industry sector (Bawden, 2011). According to analysts of the company, instead of focusing on the volume, variety of products and sales incentives it offers, it is more interested in finding a variety of investment schemes to earn their profits (Bawden, 2011). It is also working on controlling or limiting the damage of their production process that might be inflicting on the environment ((Agarwal, Shankar & Tiwari, 2006). However, according to analysts the company is suffering due to the price difference from other competitors, such as Tesco, Sainsbury, Montrose etc. Also these food stores do not offer a variety of products and have very low scale entities. The company needs to convert at least some of its superstores and also offer a variety of ready to cook items. In short they need to improvise, to meet the requirements of the customer by bringing an apparent variation in their style of business. Variations and innovations may be appealing and attractive for the customer and they may prefer visiting the store to check out the variations. Other stores offer a number of services and items on their outlets, whereas Cooperative has simple food stores which it can turn into super markets (Just-Food.com, 2012). The other stores are carrying out customer centered operations; they are offering goods that the customers look for upon entering their stores, such as organic, fresh and affordably priced groceries or a wider variety of groceries. The Cooperative also needs to follow the trend of looking after and focusing on its customers, rather than working on the replenishment systems, finding investments etc. It can be observed that their competitors have priced a good notice of the customers purchase power in mind; this has lowered sales and profit for The Cooperative. Their convenience store market is more prices based than product based and the new marketing strategy of highlighting its ethical processes seems to affect only the younger generation. The older generation’s chief concerns, when shopping at the convenience stores, are product quality and price (Lawson, 2012). Another factor that the Cooperation is paying attention to is its visibility, or its communication with its customers. The schemes of introducing to the customer and showing them that their idea of new products have been attained from ethical means, the company they are buying from is investing their earnings into charities, and buying education for the poor etc is another strategy to gain the attention of the public. Such type of communication strategies allows customers to trust the organisation. The advertising of such facts is a source to depict the ethical way of conducting business as well as use of consumer money for benefit of the society can be seen as part of ‘agile’ manufacturing (Slack, Chambers & Johnston, 2010). However, according to one analyst the Cooperative is more likely to be practicing ‘lean’ manufacturing, as its sole aim in the current competitive market is to cut wastage and extra costs to the greatest possible extent. They are looking to minimise cost more than working on satisfying customers or selling goods that will attract their customers (Just-Food.com, 2012). As the definition goes, they are working hard to maintain a high quality of the products, but their greater focus is on reducing costs. Agile manufacturing requires that the company work on controlling costs, while also maintaining a good standard of quality and more importantly meeting customer needs and requirements rapidly as well as effectively. This kind of manufacturing takes place in a competitive environment. Although till date the Cooperative was following a more ‘lean’ approach but looking at the new CEO Steve Murrels, it seems that customer satisfaction might become the focal point of the food giant’s service. Murrel is not looking to achieve customer satisfaction through hiring of more staff or improving service. He seeks to attain the utmost satisfaction through initiating strong and meaningful contact and relations with the customers (Lawson, 2012). In other words Murrels is going to improve upon the ‘visibility’ of the firm. An effective supply chain system is essential to the profitability and financial strength of any business in the fast paced markets of today. It has become very important that the companies focus on designing an effective supply network and then its efficient management is even more important. Therefore, an agile supply chain is what is needed to meet market and consumer needs (AMBE, 2010). The Cooperative’s state-of-the art supply chain seems to be just that, an agile supply chain. It has several warehouses that are conveniently located and they make use of excellent frozen storage facility. Even the transportation has ‘temperature controlled’ containers where the food is stored for various purposes (The Co-operative Food 2012). It is also opening more DCs to solve any power issues and also to help improve the supply chain (Harrison, 2012). The company has a digital trading system that ensures speedy and instant connection with many of its suppliers. This system is another way of reducing the cost, as it does not require too many people to run it. In a week the Cooperative may trade some 70,000 invoices valued at some 85mn GBP and all these are done electronically. This way it maintains contact with its hefty 1400 suppliers (GXS, 2010) .This GXS Trading Grid is the key weapon of the Cooperative that helps make the company ‘Active business’, a business that has continuous communication with its suppliers, which in the end translates to timely supply of fresh food items to match the customer’s level of satisfaction (GXS 2010). In case of Co-operative Food, the main objective of SCM is to ensure that the supply chain management is done in a highly efficient manner and it should generate maximum value for the customers, shareholders and all other stakeholders (Marcus, 2010). The value of a supply chain is described as the difference between the worth of final product in view of customers and costs incurred in the supply chain process to fulfil the customer’s demands. It is vital that lean and agile operations are properly implemented in the organisation so that the performance of the company is enhanced (Chopra & Meindl, 2007). In order to make sure that every organisation has a perfect SCM structure, the latest introduction is of ‘leagile’ concept which states that both strategies should be appropriately made part of the SCM strategy which will ensure that the business entity is able to reap its benefits (Agarwal, Shankar & Tiwari, 2006). The costs should be minimised and value provided to the final consumers has to be enhanced so that they feel valued and believe that they are getting value for their money (Banihashemi, 2011). It is recommended that Co-operative Food manages its operations by developing a well-effective and strategically coordinated SCM strategy which will ensure that there is an efficient management of business operations. All operations in the retail store need to function in a systematic mode for achieving the desired results for the store. References Agarwal, A., Shankar, R. and Tiwari, M.K., 2006. Modelling the metrics of lean, agile and leagile supply chain: An ANP-based approach. European Journal of Operational Research, 173, pp. 211-225. AMBE, I, M., 2010. Agile Supply Chain: Strategy for Competitive Advantage. Journal of Global Strategic Management. [online] (June 2010). Available from http://www.isma.info/dosyalar/05-17_AGILE_SUPPLY_CHAIN_STRATEGY_FOR_COMPETITIVE_ADVANTAGE_%28Intaher_Marcus_AMBE%29.pdf. [Accessed 8th December 2012]. Anupindi, R., Chopra, S., Deshmukh, S.D., Mieghem, J.A.V. and Zemel, E., 2012. Managing Business Process Flow: Principles of Operations Management. 3rd ed. New Jersey, USA: Pearson Education. Banihashemi, S.A., 2011. Improving supply chain performance: The strategic integration of lean and agile supply chain. African Journal of Business Management, 5(17), pp.7557-7563. Bawden, T., 2011. Co-operative Group Commits to Ambitious Ethical Operating Plan. The Guardian [online]. Friday 18th February 2011. Available from http://www.guardian.co.uk/business/2011/feb/18/cooperative-group-ethical-operating-plan. [Accessed 8th December 2012]. Best, D., 2012. Just –Food. [online]Available from http://www.just-food.com/comment/co-op-has-plenty-to-ponder-after-unsurprising-h1-results_id120291.aspx. [Accessed 8th December 2012]. Chopra, S. and Meindl, P., 2007. Supply chain management: Strategy, Planning and Operation. Upper saddle River, New Jersey: Pearson Education. GXS, 2010.A GXS Case Study. [online] November 2010. Available from http://www.gxs.co.uk/wp-content/uploads/cs_co-op.pdf. [Accessed 8th December 2012]. Harrison, N., 2012. Co-op profits tumble 16% in 'fiercely competitive food market.' Retail Week. [Online] 23rd August 2012. Available from http://www.retail-week.com/sectors/food/co-op-profits-tumble-16-in-fiercely-competitive-food-market/5039995.article. [Accessed 8th December 2012]. Lawson, A., 2012. The Co-operative Food: Steve Murrel’s to do list. Retail Week [online]. 16th July 2012. Available from http://www.retail-week.com/sectors/food/the-co-operative-food-steve-murrells-to-do-list/5038694.article. [Accessed 8th December 2012]. Marcus, I., 2010. Agile Supply Chain: Strategy for competitive advantage. Journal of Global Strategy Management, 7 June, pp. 5-17. Slack, N., 2009. Grae Laws – The Technology Aestheticist. [online]Available from http://graelaws.wordpress.com/mba/operations-and-process/the-four-vs-of-operations/ [Accessed 8th December 2012]. Slack, N., Chambers, S., & Johnston, R., 2010. Operations Management. Fourth Edition. Pearson Education. http://www.staffs.ac.uk/assets/harvard_referencing_examples_tcm44-39847.pdf. [Accessed 8th December 2012 ] Slack, N., Chambers, S., Johnston, R. and Betts, A., 2008. Operations and Process Management: Principles and Practice for Strategic Impact. 2nd ed. USA: Prentice Hall. The Co-operative Food, 2012. Co-operative Food Primary Logistics Services.[online]. Available from http://crl-primary.co.uk/services.asp. [Accessed 8th December 2012] Read More