Business Operations and Systems - Example

Business Operations and Systems Table of Contents Part 3 Outlining Essential Components for Effective Business Operations Management for Aldi Supermarket (Aldi) in the UK 4 Effective and Efficient Operations in the Retail Sector 4 Ensuring Reliability and Adaptability in its Operations 5 Effective Process of Conversion 5 Illustrating the Potential Issues for Aldi for Using Soft System Methodology 6 Soft System Methodology (SSM) 6 Operation Strategy Priorities Model 9 Comparing and Contrasting the Different Models Used by Online Retailing Business Industry 9 Recommended Delivery to the Customer Conundrum 10 Part 2 11 Root Definition, CATWOE and Detailed Rich Picture Illustration 11 Root Definition 11 CATWOE Definitions 11 Rich Picture 13 Illustration of Changes in the Business Process Plan including “AS IS” and “TO BE” 14 Part 3 14 Strategy to Turn Performance Objectives into Operations Priority and Resources 14 Online Order Taking 15 Employee Training and Development 16 Measuring Business Performance of Aldi during the Post Implementation of SSM 17 Factors for E-commerce Balanced Scorecard for Aldi 17 Customer Orientation 17 Business Contribution 17 Operational Excellence 17 Future Orientation 18 References 19 Part 1 Aldi Albrecht Discount (Aldi) is one of the most renowned brands in the global retail sector and it has an operational experience of more than 100 years in the same. The company was founded in 1913 in the form of family owned retail business and later established itself in the global arena. It would be vital to mention that the company operates in the global retail market with the assistance of wide range of products. The company is known for providing cost efficient products and services to the customers and it has been one of its USP over the years. The company penetrated in the global market through establishing stores in various parts of the world. Contextually, in the contemporary business scenario Aldi is involved in extensive operations all over the world through its independent groups including ALDI Nord (North) and ALDI Süd (South) (Emsell, 2011). Presently, the company operates in more than 17 nations of the world through its retail chains. A large per cent of the operations of the company is seen in the UK retail market where it occupies 3.6 per cent of the overall market share of the retail sector of the country (Aldi, n.d.). Outlining Essential Components for Effective Business Operations Management for Aldi Supermarket (Aldi) in the UK As stated above, Aldi has an extensive operation in the UK market where it occupies a considerable market share. However, in order to sustain for a longer duration amid the intense competition in the retail market of UK, Aldi need to adopt certain effective strategies that can ensure effective business operations. In this regard, it has been noted that effective set of components has been a major success factor for the companies in the retail sector (Kumar & Suresh, 2009). In the present day business operations of Aldi in the UK market, the business mainly focuses towards assuring independent operations within the retail market without aligning with any of the local heavyweights. It is evident that in the presence of players like Tesco and ASDA the UK retail market is fiercely competitive which further influence Aldi to adopt effective business approaches that can ensure competitive advantage for the company in the UK market. Some of the essential components that the company can adopt are highlighted below in detail. Effective and Efficient Operations in the Retail Sector Efficiency in every operational domain of the business can be regarded as one of the most vital component that can ensure effectiveness for the overall business of companies operating in the sector. Contextually, Aldi will also need to enhance its operations to the next level in order to ensure its long-term presence in the UK market amid the rapidly augmenting competition. Contextually, the company will need to segregate each of the business functions and enhance its effectiveness in each of the domain. Again, Aldi will also need to emerge with specific measures in each of its retail activities especially with regard to its supply chain, which is the backbone of its business. In this regard, the company could adopt effective supply chain model and emerge with effective strategies to remain a notable player in the retail sector of the UK market amid the intense competition (Griffin, 2006). Ensuring Reliability and Adaptability in its Operations Notably, in order to move in accordance with the transforming modern day business, companies need to be reliable as well as adaptable to the changing situation. This particular aspect is also relevant with regard to the case of Aldi and its operations in the UK market. Since the retail market of UK is changing rapidly owing to the fierce competition, the company will need to enhance its ability to adapt in the changing market situation. It has been noted reliability and adaptability are key components with regard to meet the predetermined goals and objectives of any business irrespective of the sector they operates. Customers and other stakeholders in the UK market should develop reliability on the operational approach of the company so that maximum loyalty can be shown. Contextually, meeting the changing needs and preferences of the customers along with delivering high quality services and products might work towards the wellbeing of the company i.e. Aldi (Ketchen & et. al, 2008). Effective Process of Conversion Conversion process in any business refers to the aspect where companies convert their planning in the practical business scenario. It is one of the most vital aspects that directly ensure the accomplishment of organizational goals and objectives. It is a particular factor that is associated with the aspect of enhancing operational system through ensuring improvement in all the business activities. This particular component will also be vital for the operations of Aldi in the UK market to build a strong position and brand image amid the customers of the retail sector of the country. Some of strategies that the company could adopt towards enhancing the rate of conversion of the business will include close supervision of each of the functions of the business especially including the supply chain so that effective deliverance of goods and services can be ensured (Kumar & Suresh, 2009). Illustrating the Potential Issues for Aldi for Using Soft System Methodology Soft System Methodology (SSM) A soft system methodology (SSM) is a particular process or framework that is considered as a strong development tool in any form of business. More specifically, SSM is a particular process that enables business units to be able to analyse and evaluate the challenges companies might deal with while executing their business strategies. Several stages are involved in proper implementation and execution of the SSM within any particular business. These stages involve systematic analysis of the strategies and the implications of its outcome. This particular method can also be used to evaluate the potential challenges that Aldi might need to counter while initiating online retail operations in the UK market (Solomon, 2008). The stages of the framework are provided in detail hereunder along with depicting the potential issues for Aldi in its transition to the online retailing. Stage1. Problem Situation: Unstructured This is a particular stage of the framework, which depicts about the scenarios where Aldi is expected face the problems in the domain of online retailing. This stage will also show the strategies adopted by Aldi to deal with the challenges in the overall business operations. Stage2. The Problem Situation: Expressed In the stage two of the framework, the projected challenges and problems that might be faced by Aldi will be presented in the domain of online retailing in the UK market. Stage3. Root Definition of Relevant Systems In the third stage of the framework, systematic recommendations would be entered regarding the aspect of effective decision making while Aldi deals with challenges in the online retailing sector of the UK market. This particular stage is one of the most vital in the framework, as it will seek to present the root classification of the challenges identified in the previous stages. The significance of this particular stage is also enhanced from aspect that it will also intend to determine the measures that can be effective in dealing with the previously identified issues or challenges. Stage4. Formulating Conceptual Models In the fourth stage of the framework, conceptual models will be framed for the retail giant with regard to the challenges that the company might face while operating in the online retailing sector. Stage5. Comparison of Stage4 with Stage2 In the fifth stage of the process, the selected conceptual model for the company will further be compared with the selected business strategies of Aldi in the past in the UK market. This will also depict the challenges that the company might face while entering the online market of retailing. Stage6. Feasible and Desirable Changes Again, in order to counter the potential challenges this particular stage would enable the company i.e. Aldi to be able to attain a desirable level management efficacy within the business. Stage7. Action to Improve the Problem Situation In this stage of the SSM, the risk management team of the company will intend to explore the possible steps that can be adopted to deal with the challenges with regard to its approach of online retailing (Solomon, 2008). Operation Strategy Priorities Model In the aforesaid stages, focus was mainly towards depicting the possible issue that might emerge in the operations of Aldi when the company introduce itself in the UK online retail market. The stages suggested above reflect the steps that are involved while ascertaining the possible (might be positive or negative) situations that might arise while the company operates in the online retailing sector. In consideration to the above-mentioned issues, the Operation Strategy Priorities Model can be used to ensure effective mitigation of the challenges that Aldi might need to deal with in the online retailing operations. Comparing and Contrasting the Different Models Used by Online Retailing Business Industry With regard to the emergence of the online retailing sector, there are certain notable issues and challenges that accompanied with the same for the companies operating in this particular sector. Some of the most notable issues for the companies in this particular sector include inventory management, supply chain management and cost management among others. However, with the adoption of effective strategies, the company could be able to mitigate the challenges in their respective online business sector (The Open University, 2011). Contextually, some of the notable strategies or measures that can be practiced by Aldi to mitigate the issues relevant to online business are highlighted below. Notably, Aldi mainly face problems in the domain of delivery channels or network in the UK market. Contextually, in order to enhance its online business performance, the company will need to emerge with strategies that can enhance its delivery time windows of its operations. This particular aspect of delivery and supply chain problems, the company has been facing inventory as well as delivery management threats in the online retailing operations. Towards addressing this particular issue, Aldi will need to be dynamic with regard to its products delivery timings for the customer along with enhancing its approach in order procurement stage. (Hays & et. al., 2004). In addition to that, the management of the business will also need to emerge with plans where it can execute its delivery plans in accordance to the purchase orders of the customers further affecting the inventory management positively. This might overcome the delivery and supply chain challenges for the business within the online sector. Furthermore, the management of the company should also focus on segregating the operations for diverse range of products so that overall efficacy could be achieved. Notably, this particular step will enable the company to adjust its operations and ensure appropriate operations in the delivery systems up to a certain extent. The company will also need to work towards developing its transportation facilities. This has also been seen as a major challenge for the company in the UK market. Recommended Delivery to the Customer Conundrum Towards reducing the risk emerged from the aspect of customer conundrum, the management of Aldi will need to emerge with dynamic delivery strategy to deliver the products to the final customers. Contextually, the company will need to develop strategies of delivering products in the least possible time. Again, the company will also need to reduce its negative impact on the environment by reducing emission of CO2 while delivering products through short routes. The use of navigational tools will allow the company to depict exact locations of customer further ensuring more efficient products delivery with minimum possible traveling. This approach of the company will affect the environment positively (Bomford, 2012). Part 2 Root Definition, CATWOE and Detailed Rich Picture Illustration Root Definition The SSM system will enable the company to enhance its operational efficacy in each of the business domains especially in online retailing. With the help of the system, the company could be able to emerge with systematic and conceptual framework in the domains of supply chain, value chain and delivery system within the online operations. Additionally, the system of SSM would strengthen the approach and process of inventory management including both inward and outward. Enhancing appropriateness of the products delivery to the customers will also serve as a potential advantage of the SSM system. CATWOE Definitions CATWOE stands for customers, actors, transformation, weltanschauung, owners and environment, which are explained in detail hereunder. Customer (C): With the approach of direct delivery within the online retailing, the customers will be majorly benefitted, as they will receive the final products in a convenient and time efficient manner. Actor (A): The implementation of proper online ordering as well as delivery system will further enhance the efficiency of the supply chain team of the business within the UK retail sector. Transformation (T): The transformation of the online business of Aldi from traditional approach to the systematic delivery and customer tracking approach will further enhance the overall buying experience of the customers from the company. Weltanschauung (World View/W): Proper execution of the integrated ordering along with delivery process will enhance the overall online operations of the company. It is widely accepted amid the experts in the business domain in the present day context. Owners (O): The system and process of ordering and delivery proposed in the above sections of the paper will enable the company i.e. Aldi to enhance its operations in the online retailing sector. Environment (E): Notably, when the company implements the online delivery and ordering concept, it will be able to deliver goods to short distances and routes to the customers as the latter would be traced more accurately. Rich Picture Figure: Rich Picture Illustration of Changes in the Business Process Plan including “AS IS” and “TO BE” As per the SSM system, certain changes can be seen in the operations of the business of Aldi that are explained in the table below. AS IS A F T E R TRANSFORMATION TO BE The online operations of the company has currently is seen to be conducted in a smaller The online operations will be conducted on a larger scale and platform attracting maximum number of customers Products are delivered to the customers consuming maximum time Products will be delivered to the customers with utmost time efficacy The company lacks online stores which impacts its customer base Online services will be conducted on a vast scale where maximum number of customers can purchase their products Inventory management of the company is conducted in traditional method Inventory management will be executed via online Part 3 Strategy to Turn Performance Objectives into Operations Priority and Resources With regard to develop a strong reputation for the company in the online retail market of UK, Aldi needs to formulate strategies relevant to performances of the workforce. Contextually, Aldi will need to identify effective strategy in the domain of online ordering and delivery of products to the customers within its online retail operations. In this context, proper and optimum use of the resources towards attaining the goals of the business is of highest priority. Therefore, certain factors will need to be taken into consideration by the company, which are given in detail hereunder. Customer Interaction Notably, customers are most vital stakeholders of any form of business and their satisfaction is vital to attain utmost organizational success. In the online industry of UK, Aldi is quite a new player and hence it will need to develop proper communication and relationship with the targeted or potential customers. A strong communication channel and process is highly needed in this regard. The company must need to use the aspect of social media to develop communication with the customers in the online sector (Mishra & Mishra, 2009). These approaches will enable the company to comprehend about the needs, demands and choices of customers and work in accordance to the same. This can be again recognized as a potential boost for the overall online retailing of the company in the long run (Solomon & Kim, 2011). Online Order Taking It is quite evident that effective delivery of products to the customers is highly dependent on the order procurement process. In this context, Aldi will need to enhance their order procurement process in its online retailing business. The company could be able to adopt the approach of online order procurement, which saves both time and cost. It will be vital to mention that the company will need ensure utmost assistance for the customers while they place their order so that any sort of miscommunication and misunderstandings could be prevented. In this regard, the company can categorize its products into numerous sections to ensure convenience for the customers while placing the orders. Aldi must also provide shopping cart facilities and catalogue display to enhance the level of convenience for the customers. Modes of payment are another domain that the organization should work on with highest priority (Williams, 2000). Online Inventory Management Inventory management is deemed to be one of the most vital aspects that directly impact the operations of any business. Contextually, the management of Aldi will also need to take stern steps to enhance its inventory management especially in the domain of online retailing in UK market. Contextually, the company may manage its inventories online to accomplish its objectives of enhancing online retailing operations. Online inventory management approach of the company will include both the inward and outward inventory management. This will also enhance the overall efficacy of the SSM system that is proposed earlier. It is also crucial to note that the inventory management of the company should directly align with the order pattern of customers to attain higher success (Belew & Elad, 2011). Time Management Time efficacy is highly required in operations any business in each and every business function. In this regard, the need of proper time management policies is widely accepted. Time management in the operations of Aldi ensures smooth deliverance of the products to the customers within the specific deadline. Time management policies should be implemented in each of the functions of the online operations of the company (Holden, 2013). Employee Training and Development Employees are among the key assets of any business and their approach in the workplace directly affects the overall operations of the business. Therefore, it is important that companies emerge with proper employee development and training program to enhance the competencies and skills of the employees so that they can attain the goals and objectives of the business. Aldi will also need to ensure proper training and development of the employees so that they can serve the company positively in the online retailing operations of the company (Noe, 2007). Measuring Business Performance of Aldi during the Post Implementation of SSM Sustainability in business is one of the major components that companies seek in the present day business context. This particular need is also prevalent in the operations of Aldi when it operates in the UK market. Contextually, it is probable that the implementation of the SSM system will enhance the operations of Aldi in its online operations. This aspect can be better evaluated with the help of the balance scorecard technique (Grembergen & Amelinckx, 2002). Factors for E-commerce Balanced Scorecard for Aldi Customer Orientation The method of customer orientation will mainly predict and comprehend the performance efficacy of Aldi. This approach will also depict the extent up to which the company has attained customer satisfaction. This particular factor will also enable the company to depict the number of retained customers within its online operations (Grembergen & Amelinckx, 2002). Business Contribution The aspect of business contribution facilitates the company to illustrate whether the objective of the business has been ascertained. This aspect will provide the overall performance of the online retailing operations of the company (Grembergen & Amelinckx, 2002). Operational Excellence It is also important to measure the overall excellence of the business to understand the extent of its popularity amid the buyers. Contextually, depicting the operational efficacy of the company will include analysing the user name as well as password of the customers and study about the number of times they have purchased from the company. This will further depict the loyalty of the customers towards the company (Grembergen & Amelinckx, 2002). Future Orientation This particular facet will reveal the prospect of future development in the e-commerce retailing of the company. This will include analysing the past performances of the company, the level of satisfaction of the customers and the availability of new technology that can used in business among others (Grembergen & Amelinckx, 2002). References Aldi, No Date. Competitive Advantage through Efficiency. Operations, pp. 1-4. Belew, S. & Elad, J., 2011. Starting an Online Business All-in-One for Dummies. John Wiley & Sons. Bomford, A., 2012. The Parcel Conundrum. The BBC News Magazine. 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Kumar, S. A. & Suresh, N., 2009. Operations Management. New Age International (P) Ltd. Mishra, A. & Mishra, D., 2009. Customer Relationship Management: Implementation Process Perspective. Acta Polytechnica Hungarica, Vol. 6, No. 4, pp. 83-99. Noe, R. A., 2007. Human Resource Management (Sie) 5E. Tata McGraw-Hill Education. Solomon, S. S., 2008. Systems Thinking in the Workplace - An Action Research Approach. University of Missouri-St. Louis. [Online] Available at: http://www.umsl.edu/~sauterv/analysis/F08papers/Simon_Solomon_Systems_Thinking_in_the_Workplace.html [Accessed June 30, 2014]. Solomon, M. G. & Kim, D., 2011. Fundamentals of Communications and Networking. Jones & Bartlett Publishers. The Open University, 2011. Understanding Operations Management. The Transformation Model. [Online] Available at: http://www.saylor.org/site/wp-content/uploads/2013/04/BUS300-1.3_Understanding-Operations-Management-The-Transformation-Model.pdf [Accessed June 30, 2014]. Williams, M. C., 2000. A Soft System Case Study Investigating the Information System of a Small Business and Demonstrating the Usefulness of Rich Pictures. 1st International Conference on Systems Thinking in Management, Vol. 72, pp. 643-648. Read More