The Layout and Flow of an Operation in Tesco PLC - Case Study Example

Name Course Tutor Date TESCO Layout and Flow Introduction The layout and flow of an operation is describes the physical location of its transformation of the available resources. In simple terms layout is deciding where to utilize the resources including the facilities, machines, equipments and employees or staff members in the execution of a project or operation. Layout is one of the most distinct feature or element of an operation. It is the element that almost everyone would first identify on an ongoing operation at first instance because it the form and appearance of an operation. It also determines the means in which the transformed resources including the materials, information and the clients flow in the intended operation (Slack et al 674). Tesco PLC is a firm based in Britain which deals with grocery and general merchandise on an international scale in form of a retail chain. The firm is the biggest in Britain retail market at least in the grocery sector in consideration to both local market share as well as global sales with profits exceeding £2 billion. Tesco climbed to the fourth place as the largest retailer in 2008. Although the firm initially dealt with food and drink, it has since expanded and invested in other fields such as clothing, electronics, telecoms, dental processes, retailing and general trading in DVDs, Internet services, software, financial operations, home services, health care services car services and several other areas related to the above mentioned (Walker 6). Operations management plays an important role in ensuring that the core performance objectives of TESCO are realized. In all of its operations, whether to improve on its current operations or to venture into other areas, the manner in which the firm utilizes and allocates its resources in various programs will have a great impact in the success of the activities. This will determine whether the firm succeeds in delivering quality customer services towards enhancement of its profitability levels. As a result there has been several innovative development projects at the firm in the operation management all geared towards appropriate allocation of resources for maximum profitability. The projects are aimed at enhancing the utilization of TESCO resources for the purpose of transforming the organization’s performance (Slack et al 674). In the operations management of TESCO, the following layouts are exhibited: Functional layouts Functional layouts also known as process layouts are basically found in job shops or organizations that produce tailored, low volume commodities that may need diverse processing requirements and series of operations. Functional layouts are facility configurations in which projects with a similar function are categorized together. Their function is to process products or offer services that involve diverse processing requirements. For instance, in the Tesco superstores and supermarkets, the groceries sold require a series of processing requirements in order to fit the customer requirements (Stevenson 340). Product Layout Product layouts are exhibited by flow shops. Flow shops manufacture large volume, highly standardized goods that need highly standardized, recurring processes. In a product layout, resources are organized sequentially depending on the steering of the commodities. In theory, this chronological layout allow the whole process to be analyzed in a straight line, which sometimes may be totally devoted to the creation of only one merchandise or product version. Tesco for instance requires an appropriate product layout to ensure that it meets all the customer requirements in the express stores. The flow of the line can then be partitioned in such a way that labor and equipment are appropriately used throughout the process. Product layout competence is often improved through the application of line balancing. Line balancing is the allocation of tasks to workstations in a manner that workstations have roughly equal time needs (Stevenson 340). Advantages of product layouts include: Output. Product layouts can produce a big volume of goods in a short time. Cost. Unit cost is lowered due to large scale production. Utilization. There is an elevated level of labor and apparatus utilization. Disadvantages of product layouts include: Motivation. Division of labor ultimately leads to de-motivation. Flexibility. Product layouts are rigid and cannot simply respond to required scheme changes—particularly transformation in product or process design. System protection. The system is threatened by equipment breakdown, absenteeism, and downtime as a result of operational expenses. Fixed-position layout A fixed-position layout is suitable for a produce that is too big or too heavy to move. An example of fixed position layout is the construction of Tesco extra stores in various parts in Europe. Cellular layout Cellular manufacturing is a kind of layout where equipments are grouped on the basis of process necessities for a set of related items (part families) that need similar processing. The construction of various Tesco stores is an example of a cellular layout. These classifications are known as cells. Therefore, a cellular layout is an apparatus layout customized to facilitate cellular manufacturing. Processes are assembled into cells using a method called group technology (GT). Group technology entails locating parts with like design features (size, shape, and function) and like process features (type of processing required, available equipment that executes this type of procedure, and processing cycle) (Stevenson 340). Some of the benefits of cellular manufacturing include: Cost. Cellular production offers for faster processing time, less resource handling, less work-in-process stock, and minimized setup time, all of which cut down on costs. Flexibility. Cellular production facilitates the production of small batches, which offer some level of amplified flexibility. The layout and flow in the firm will be analyzed in the four types of TESCOs since each will have a different layout. The four types of TESCO stores that will be analyzed in the layout flow include: Tesco Superstore & Supermarket - well-known large superstores and local surroundings supermarkets. This store deals with significantly large quantities of merchandise. Tesco Metro - these types of stores are located in city and town centers Tesco Extra - The new Tesco initiative merging the qualities of a superstore collectively with new non food departments Tesco Express –these include Petrol stations and convenience stores jointly. The analysis starts with the: Tesco Superstore and supermarket Tesco superstores and supermarket are standard sized stores dealing with goods such as groceries and to some extent a smaller quantity of non-food goods compared to the extra stores. The stores have originally been known or have carried the trade name ‘TESCO’ but are now changing to include the names Superstore or supermarket. This is evidence by the new store operating in Liverpool which carries the name ‘TESCO Superstore on its door. The firm has appropriately allocated in its resources to the operations of the supermarkets and superstores. Both human as well as material resources have been allotted to individual stores to ensure that its operations run normally. Every branch or store has an operations manager who ensures that adequate resources are available fir the store to run normally. In order to ensure that the stores command a substantial share of the market, TESCO operates stores in various locations. The stores stock the kind of commodities preferred by customers in particular areas of the world. This is ensured through market research strategies aimed at identifying good and services preferred by customers. As a result, TESCO supermarkets and superstores have wined customer loyalty enabling it to remaining a leading firm in groceries sector (Walker 6). Tesco Metro These types of Tesco stores are located in city and town centers. They are intended to provide groceries to customers within the town and town centers. In fact their mission statement is ‘Metro brings grocery shopping back to the high street’. They can be considered as the modern day version of the expediency stores offering modern and quality services to its customers. They bring the grocery services nearer to the customers. At the moment there are more than 40 Tesco metro stores and more developments are under way. The stores target dedicated retailers in need of huge company benefits while preferring to trade in small-store business environments. This is particularly advantageous in that retailers can establish a close customer relationship which is key to customer satisfaction and hence customer loyalty and sustenance. The stores create opportunities within the setting to assist small scale traders in surviving the stiff competitive business world. As mentioned, the firms are strategically located to ensure that all of their operations are successful. The parent firm ensures that they are adequately stocked as a way of winning customer trust. It also assists the retailers running the stores in decision making in regard to the operations of the firm and also provides valuable information in regard to customer preferences and needs in the town and city centers (Walker 6). Tesco extra This is the most recent of the TESCO business format currently operating in Malaysia where the first Tesco extra store started operating in April 2010 at Seremban with the translation and refurbishment of the business unit previously known as Makro Cash & Carry Seremban. At the moment more than 7 Tesco extra stores are in operation while the recently opened is the Extra Seb Jaya- the last one to be transformed and open to customers on Oct 2008. There are 3 Extra stores situated in Klang Valley and these are Extra Cheras, Extra shah Alam & Extra Selayang.The other Extra Stores are situated in Ipoh, Plentong JB & Extra Sg Dua in Penang. It can be noted that the stores are positioned in variously localities in an effort to have customer diversity and transverse the market. This is part of TESCO’s operations management program. Most of the stores are an expansion of Makro business which implies that they do not start from scratch as they already have a substantial volume of the customers previously loyal to Makro. These new types of stores integrate the best practices of both Tesco and Makro businesses to ensure that all their customer needs are adequately met (Business….24). Tesco Extra offers a comprehensive assortment of goods and services targeting the small businesses. The product assortment includes large sized packs, special trolleys and checkouts as well as devoted business development team to support new business operates with ideas about running business activities through the Biz Development Center. In addition, Tesco Extra stores furnishes all the requirements of individual clients and families through its services and extra assortment of food and non-food commodities as well as the matchless prices that have become the characteristic of Tesco in Malaysia. Tesco Extra has also improved facilities in the outlets to include services for the disabled and special groups of individuals. Such include parking lots, toilet facilities, parent and baby parking, customer loading facilities, and various types of trolleys and checkouts to furnish the diversified customer profile. To improve the payment methods, all credit cards are accepted (Business….24). Tesco express Tesco Express is one of the most successful business formats in the recent years. Tesco stores handles Petrol stations and convenience stores jointly. In general they have a floor space of up to 3,000 square feet and provide to their customers of an assortment of other products such as fresh produce, wines and spirits, and in-store bakery. The stores have an average of over 7 million customers shopping in the more than 650 stores every week. They have a royal customer base as a result of the wide assortment of products that they provide and the appropriate locations hence winning and sustaining a wide customer profile. The management of new construct and renovation process has been prioritized by the firm. Several stores are new sites but more so as a result the diversified conversion strategies that Tesco Express is running after several major successful acquisitions. This is in addition to its ongoing design and construction plans. Tesco express has also taken into account the significance of being responsible and considerate to the neighbors or the surrounding community. As a result, the firm ensures that the operations of individual express stores blend with the surroundings of their location through various development programs (Walker, 6). The Shop fronts are being considerately changed or restored in a flexible manner, varying from a fashionable look to a much more conventional, classic appearance. With more than six million dealings every week, and almost two thirds of customers shopping at least twice in the course of every week, it is essential to Tesco Express that new construct and refurbishments are conducted in a timely and cost-considerate way. Tesco Express employed the 4Projects solution in August 2003, in order to handle numerous projects through one reliable boundary (Technology helps…1). Project statistics are recorded per period or analyzed by groups of projects to enable Contract and Project Managers to get constant project progress. All of Tesco Express’ associates normally get the same information. Project drawings are accessible within seconds of being concluded and approved, and can be analyzed on-screen the Internet. Since 2003, over 150 firms within this Supply Chain have adopted the 4Projects. The 4Projects allow multiple handling of projects. Conclusion Tesco has been growing rapidly an evidence of success in its operations management systems. It has exhibited its global presence not only in retail trading but also in outsourcing. As part of its logistic strategy, the firm trades in the right products and sustains a suitable supplier relationship. It also gets goods to store in time. Due to the ever and rapidly changing customer profile, the firm responds customer demands as fast as possible (Lewis & Slack 654). Works cited Lewis, Michael & Slack Nigel. Operations Management: Critical Perspectives on Business and Management. London: Routledge, 2003 Business as usual for Sir Terry after 10 years in charge". Birmingham Post (Midland Independent Newspapers): p. 24. Slack Nigel, Chambers Stuart & Johnston Robert. Operations management. London: Prentice Hall, 2007. Stevenson, William J. Operations Management. 8th ed., Boston: McGraw-Hill/Irwin, 2005 "Technology helps Tesco beat crunch". Cio.co.uk. Retrieved on 8th June 2010 from . Walker, Gaelle (2006-11-11). "Online failing todeliver". The Grocer (William Reed Publications): p. 6. Read More