The Essential Components for Effective Business Operations Management for Aldi in the UK - Assignment Example

Business Operations Table of Contents Table of Contents 2 Part 3 The Essential Components for Effective Business Operations Management for Aldi in the UK 3 Soft Systems Methodology to Evaluate the Issues of Online Business of Aldi 6 Operation Strategy Priorities Model 9 Compare and Contrast of the Operation Model Used in the Retail Sector 10 Recommendations for Online Shopping 11 Part 2 12 Root Definition of Online Service 12 CATWOE 13 Rich Picture 14 ‘AS IS’ and ‘TO BE’ Business Process Plans 15 Part 3 16 Conversion of Performance Objectives into Operations Priorities and Resources 16 Measuring Business Performance of Aldi’s Online Business by Balanced Scorecard 17 References 19 Part 1 Aldi Supermarket (Aldi) is a grocery store that operates on a global context. Headquartered in the UK, the main objective of Aldi is to provide quality along with value-added products to customers on worldwide market segments. The business operations of the company are based on three core values, which include simplicity, consistency as well as responsibility. To suffice these objectives, the company has adopted the lean production system. Subsequently, the company, through its lean production system, has been able to avail the opportunity of producing products and/or services efficiently in order to eliminate wastages. The lean production process aids the company in performing operations with better economies of scale (Aldi, n.d.). In the present scenario, the UK retail market is seemed to be developing in an enhanced manner owing to increased consumer demands, both in the grocery along with food sectors. Additionally, it has been identified that online services are of immense importance in the retail sector for performing sales operations in accordance with the recognised customers’ preferences (SAS, 2013). The Essential Components for Effective Business Operations Management for Aldi in the UK Aldi is a leading as well as award-winning grocery store operating on a global context, wherein factors like globalisation and advancing technologies have increased market competitions. Additionally, the preferences of customers and buying behaviour of customers have changed in a considerable manner owing to online services. In this regard, the company is required to enhance its business operation management to a sustainable extent in relation to quality, global competition, productivity, customer services and e-business guidelines. Subsequently, the company is required to consider certain important elements with the aim of retaining its competitive position and business performance in the market segments of the UK for online business operations, which are illustrated hereunder. Customer Relationship Management Aldi, in order to implement effective online business operations in the market segments of the UK, is required to develop an extensive relationship with customers. In this regard, building a relevant relationship with customers will facilitate the company with the opportunity of identifying the needs along with preferences of customers maintaining greater degree of accuracy and accordingly, conduct e-business operations facing minimum hurdles (Dignersys Consulting Berhad, 2011). Financial management System Aldi, when planning to initiate online business operations, is required to make effective financial plans with the aim of ensuring that e-business functions are conducted with appropriate strategic directions. The financial plans will also aid the company in formulating suitable plans along with policies on the basis of which, e-business functions might be conducted for better accomplishment of business objectives. Financial planning is also essential to ascertain that online businesses are performed with better flexibility and structured manner (Dignersys Consulting Berhad, 2011). Demand-Supply Chain Management System In the present scenario, the UK market conditions have changed due to changing preferences of customers and business needs. In this regard, demand-supply chain management system will assist Aldi in recognising the preferences of customers, so that online operations are conducted in an effective manner. Contextually, the company will be facilitated with the opportunity of building effective online business operations with the assistance of which, procurement as well as delivery operations are conducted successfully (Dignersys Consulting Berhad, 2011). Soft Systems Methodology to Evaluate the Issues of Online Business of Aldi Soft Systems Model (SSM) is further considered as a procedure of analysing complex situations in business operations in an enhanced manner. It is a process of having a comprehensive understanding of the factors accountable for such situations and accordingly, adopting appropriate measures with the intention of mitigating such issues or complexities. The SSM model will assist in identifying the issues that might be faced by the company after the implementation of online services (Goldsmiths, 2013). Conceptually, the SSM model is based on seven stages, which are illustrated hereunder. Soft Systems Methodology Source: (Goldsmiths, 2013) Situation Considered Problematic The plan of implementing online services by Aldi in the market segments of the UK might raise different challenges in relation with increased investment, strategic decision- making and enhancing ease of use, security, delivery system as well as complexities along with prompt responsiveness. These online services might adversely affect the business operations of the company due to inadequate resource allocation and strategic planning owing to the lack of control on every component of its supply chain. In this regard, the company, if ineffective in its online services, might face unfavourable disruptions in its business performance and customer base (Goldsmiths, 2013; Jun & et. al., 2004). Problem Situation Expressed In this phase, the management of the company will devise the issues in pictorial manner with the aim of having an increased understanding of the problem situation in relation to the introduction of online business (Goldsmiths, 2013). Root Definitions The problem situation is required to be framed in textual format by the management of the company in order to obtain in-depth information regarding the issues identified and their related consequences (Goldsmiths, 2013). Conceptual Models The management, on identifying issues relating to online businesses, must develop conceptual models on the basis of which, different activities must be conducted in a systematic and dependent manner through tested and re-tested planning, investment decision-making and market analysis among others. In this context, the company, with the assistance of these models will be able to frame the problem situation logically (Goldsmiths, 2013). Comparisons In this phase, the management in Aldi will compare the conceptual framework devised on identifying the problem situation with the real world scenario, so that the gap is identified in the implementation process of online services. Contextually, the company will be able to have a better understanding of the problem situation (Goldsmiths, 2013). Changes The company, after making an effective comparison between conceptual framework and real world scenario, is required to recognise the changes that should be implemented with the aim of ensuring that the problem situation relating to online services is mitigated or sorted as desired (Goldsmiths, 2013). Action to Improve the Situation Accordingly, the company should recommend procedures based on which, activities involved with the implementation procedure of online services are conducted successfully (Goldsmiths, 2013). Respectively, it can be comprehended that there are various issues in the implementation of online services, which include planning, investment decisions, delivery system and legal factors, to be considered for developing effective online services (Jun & et. al., 2004). Operation Strategy Priorities Model The operations management framework of the company must be well structured in relation to online services, so that the operations are conducted in a systematic manner with minimum possibilities of error. In this regard, the company should recognise the aims along with objectives on the basis of which, the development procedures of online service are to be executed. Additionally, the management of the company should conduct appropriate planning with the aim of ensuring that online business operations are conducted in accordance with the needs of the business and customers (Goldsmiths, 2013). Contextually, the company will need to prioritise activities as depicted in the picture below. Operation Strategy Priorities Model Source: (GlaxoSmithKline plc, 2008) Planning The company should conduct an analysis of the market conditions, customers’ requirements and business performances in a detailed manner with the aim of formulating effective plans in relation to online business (Higgins, 2010). Decisions The company should also emphasise on ensuring that the formulated plans are implemented with appropriate strategic decisions. In this regard, decisions should be made about factors associated with investment, legal and financial attributes that will be considered in the planning of online business model (GlaxoSmithKline plc, 2008). Deliver The company should make a forecast of the outcomes that are to be accomplished effectively. Additionally, the company should consider the preferences of customers, so that the online service model implemented is able to meet their requirements (GlaxoSmithKline plc, 2008). Expand The company, with the implementation of the online services, will also be able to expand its business operations in the market segments of the UK in its long run performance (GlaxoSmithKline plc, 2008). Compare and Contrast of the Operation Model Used in the Retail Sector In the present scenario, the retail sectors in the UK market segments are identified to adopt different operational models with the intention of performing their operations competitively. In this regard, the sector has adopted the transformation model, resource-based model and online business model. The transformation model implies that business operations are required to be conducted successfully in accordance with which, products and/or services are developed as well as delivered effectively to customers. In this regard, the model ensures that inputs are transformed appropriately and finished products are provided to customers successfully on the basis of their needs (The Open University, 2011). It has also been identified that many retail sector organisations in the UK have also adopted a resource-based model with the aim of conducting operations in accordance with their resources along with capabilities. Contextually, resource-based model aids retail stores in meeting the needs of customers with better competitiveness. It is a significant model assisting retail sectors to develop better competitive positions (Ellis-Chadwick & et. al., 2007). Presently, retail sector are inclined to adopt online services significantly due to technology advancement. The online service model has further assisted the retail sector in expanding their market along with their intended customer base in an enhanced manner. Additionally, the online stores have also facilitated the customers in meeting their requirements cost-effectively, reliably and efficiently (Yousept & Li, 2004). Currently, the retail sector is focussed towards developing online business model in order to perform their business operations competitively and sustainably. It is also expected that the business model will also aid the company in mitigating the issues relating to online store and delivery process (Ellis-Chadwick & et. al., 2007). Recommendations for Online Shopping In order to develop an effective online shopping model, Aldi is required to develop a multi-channel framework. The multi-channel model will assist Aldi in performing its business operations in a decentralised manner. In this respect, the company will be facilitated with the opportunity of conducting its business operations through inventory storage along with delivery chain. Additionally, the company will be facilitated with the opportunity of meeting the needs of customers in a cost effective way. The model will also aid the company in developing an effective customer value chain, as the company will be able to communicate with customers and meet their requirements on a continuous basis in a time-efficient manner (Zablan, 2011). The model might also assist the company in mitigating issues relating to parcel delivery and accordingly, in decentralising its operations in different market areas on the basis of which, an effective delivery network might be developed with shorter distance and time. With the assistance of the model, Aldi will be able to track customers and courier serviceman effectively with the assistance of navigation tool like GPS. This particular technology will therefore assist the company in delivering products within the stipulated time and informing customers about deliveries through e-mails and messaging services in order to minimise parcel conundrum. Moreover, the model will also assist the company in reducing environmental impacts by minimising delivery journeys, resources and time (Bomford, 2012). Part 2 Root Definition of Online Service The management of the company develops short textual ideas on the basis of which, the desired aim as well as medium are framed systematically in order to have a comprehensive knowledge about the different factors considered in the SSM. SSM represents a set of logical and real systems assisting in understanding the procedures in accordance with which, online operations can be conducted successfully. In this regard, the root definition for Aldi is presented hereunder (William, 2005). Aldi is planning to improve its business operations and competitiveness in the market segments of the UK with the assistance of online services, in order to meet the requirements of customers and mitigate delivery conundrum effectively. CATWOE CATWOE analysis is a procedure of transforming plans into desired outcomes, which can also prove to be of significant help for Aldi in implementing the online shopping model. The analysis assists the management of the company in having a better understanding of the problems associated with online services (Goldsmiths, 2013). The process in Aldi will comprise a few elements, which are illustrated hereunder. Customer - Retail grocery sector consumer Actor - Managers of Aldi Transformation Process - Retail customer transformed to online shopper Weltanschauung - The transformation is made with the notion that online shopping will assist the company in meeting the needs of its customers effectively along with better competitiveness Owners - The management of the company Environmental Constraints - Minimising impact of environment and conduct operations time as well as cost efficiently Source: (Goldsmiths, 2013) Rich Picture ‘AS IS’ and ‘TO BE’ Business Process Plans ‘AS IS’ and ‘TO BE’ Analysis Source: (Deloitte Consulting LLP, 2008) The analysis of the business plans imply that Aldi, with the assistance of online services, will be facilitated by ensuring that the requirements of the customers are sufficed suitably. The online service will also aid the company in performing its business operations with better effectiveness. Accordingly, it will aid the company in expanding its business operations in the market segments of the UK. It will mitigate the issues relating to delivery complexities and environment impacts to a considerable extent. In this respect, the company should focus on developing an online service model that might assist in conducting business operations with better resource allocation in a cost effective as well as time efficient manner. Subsequently, the company, by developing the online service, might be able to ascertain that security concerns are considered, so that consumers use online services with better ease. Part 3 Conversion of Performance Objectives into Operations Priorities and Resources Aldi has been planning to develop online services in order to improve business operations in the market segments of the UK. The online services are subsequently expected to aid the company in expanding its business operations and obtaining the competencies of an increased customer base volume. However, as the company possesses certain weaknesses, it is required to formulate as well as implement strategic plans with the aim of ensuring that its online services model is developed successfully. Subsequently, the company should consider certain factors in order to ascertain that issues and recommended actions identified in SSM are implemented effectively, as have been illustrated hereunder. Customer Relationship Aldi, in order to develop online service in the market segments of the UK, is required to implement effective communication system with the objective of interacting with customers. In this respect, it is suggestible that the company should use online social media technologies and telecommunication services in order to communicate with customers. Subsequently, with the assistance of effective communication system, Aldi shall be able to comprehend purchasing behaviour and preferences of customers. Respectively, having a better understanding of the consumers’ behaviour will facilitate the company with the opportunity of providing wide range of products in a more competitive manner (Mishra & Mishra, 2009). Online Chain Management Aldi is required to develop an effective demand-supply chain management with the objective of ascertaining that goods are procured efficiently with minimum wastage, so that the demands of the customers are met appropriately. The demand-supply chain will facilitate the company in maintaining inventories effectively. Subsequently, the chain management will also ensure that deliveries of goods are made in a time and cost effective manner (Heikkila, 2002). Training and Development Facilities Aldi is required to develop a set of effective training and development programs, so that the employees of the company associated with the online business operations are able to conduct their operations according to online business objectives. Additionally, the employees of the company will be able to develop their competencies along with knowledge about the procedures on the basis of which, online services are required to be executed (Noe, 2010). Measuring Business Performance of Aldi’s Online Business by Balanced Scorecard The business performances of Aldi can be measured with the assistance of balanced scorecard. The balanced scorecard will facilitate the company in having a better understanding of its competitive positioning in the UK retail market segments. In this regard, the evaluation tool, i.e. balanced scorecard, might be of immense importance for the company to conduct online business operations successfully. The components of balanced scorecard are discussed accordingly hereunder. E-business Balance Scorecard Source: (Hoitash & et. al., 2003) User Orientation With the assistance of user orientation element, Aldi might be able to understand the performance of business operations in accordance with the accomplishment of the expectations and preferences of customers. The company shall also be facilitated with the opportunity of conducting e-business operations on the basis of preferences of customers in the market segments of the UK (Hoitash & et. al., 2003). Operational Excellence The online business of the company is required to be measured with the aim of ensuring that business operations are conducted in accordance with government regulations, e-business policies and customers’ preferences. In this context, the company will have to ensure that online services are conducted with better consideration of factors that include personal data security, delivery system and ease of use among others. Subsequently, the company will be able to conduct online business operations is a sustainable manner (Hoitash & et. al., 2003). E-Business Financials E-business financials will further assist Aldi in recognising the business performances of the online services. In this respect, the company will be able to determine the accomplishment level of financial objectives. Subsequently, financial performances will aid the management of the company in formulating effective budgetary plans (Hoitash & et. al., 2003). Future Orientation Accordingly, future orientation factor, another important variable of the Balance Scorecard model, will aid Aldi in recognising future opportunities available in the field of online business. In this respect, training along with development programs will assist the company in enhancing business performances in the UK market segments (Hoitash & et. al., 2003). Respectively, balanced scorecard shall certainly assist Aldi to execute its business operations taking the advantage of better market expansion and customer base. References Aldi, No Date. Competitive Advantage through Efficiency. Operations, pp. 1-4. Bomford, A., 2012. The Parcel Conundrum. Magazine. [Online] Available at: http://www.bbc.com/news/magazine-18709348 [Accessed 29 March, 2014]. Deloitte Consulting LLP, 2008. Business intelligence (BI): How to Build Successful BI Strategy. Summary. [Online] Available at: http://www.loria.fr/~ssidhom/UE909R/1_BI_strategy.pdf [Accessed 29 March, 2014]. Ellis-Chadwick, F. & et. al., 2007. E-strategy in the UK Retail Grocery Sector: A Resource-Based Analysis. Managing Service Quality, Vol. 17, No. 6, pp. 702-722. GlaxoSmithKline plc, 2008. Grow Deliver and Simplify. 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