Operations Management of Morrisons - Case Study Example

Running Header: Operations Management Student’s Name: Instructor’s Name: Course Name & Code: Date of Submission: Introduction According to Andrew, (1999, p. 45), operations management is the term that refers to the operation’s manager activities, decisions, and responsibilities in managing the manufacture and delivery of goods and services. Operations management can as well be seen as part of function’s responsibility that involves production of the internal services and products within the organization as opposed to the sternly technical decisions that they take within their functions. The essay will evaluate on how cost of the operation in Morrisons is determined by changing levels of performance objectives. They are five operations performance objectives that include speed, flexibility, cost, quality, and dependability. In this essay, we shall evaluate how cost of operations is determined or affected by speed, dependability, flexibility, and quality. Company Analysis Operations management plays a great role towards achieving the major objectives of performance In Morrisons retails in Aberdeen, Scotland. Morrisons is a high volume mass service food retail operation, which has medium process variety, and it specializes in the manufacturing and retailing of food. It is the 4th biggest supermarket chain in United Kingdom with over 400 stores and 300 staff. The cost of operation at Morrisons is affected by Quality, speed, dependability, and flexibility. Cost is the capability to produce at a lesser cost. All these factors play a great role in determining the cost of operations in Morrisons retail outlets (Stefan, 2003, p. 105). Quality Quality is the capability to produce in accordance with specification and without error in order to satisfy the customers. Quality in Morrisons refers to the quality of services and products offered to customers. Poor quality in Morrisons usually results to dissatisfaction of customers who move to other places. Quality is an important performance objective that can be seen on the display and cleanliness of the fresh food of the entire store. Quality levels offered at Morrisons is varied intentionally or unintentionally in order to balance the cost of operations. Food that is near its sell by date or food that is almost becoming damaged is sold at a lower cost. This is towards ensuring it is bought as fast as possible in order to avoid it being spoilt. Quality at Morrisons varies with level of customer service provided. The service quality of part time student is lower with that of full time adult staff being higher as illustrated by Hayes & Scholes, (2003, p. 125). At Morrisons, the cost of operations increases with decrease in quality. In order to reduce the total operating cost in Morrisons, there is strict reduce of wastage at all costs. Therefore, management at Morrisons ensures it gives out quality products and services. This is towards ensuring quick purchase of products by customers. This is due to higher attraction of customers because of excellent quality of products. The higher the number of consumers, the higher the buying of products offered. Eventually, this leads to reduced cost of operations. Poor quality of products and services has been seen to increase significantly the costs of operations. Speed Speed is the ability to do things quickly in response to the demands of the customer and thereafter offer short lead times between the time customer orders products or services and the time he receives them. Speed is determined by speed of response and accessibility of the products. Speed plays a key role in reducing the time for customer by giving the customer speed advantage. In general, people prefer faster delivery of products or services and they are even willing to pay more for it. Speed reduces inventories and risk. Speed also results to increased acceptability of products or services. Speed of delivery of products and customer care results to reduced cost of operations. This is through reducing the overall time spent in every customer that eventually results to reduced cost of operation. Increased speed also results to higher number of operations done in one moment with more customers being served within shortest time. This in the end leads to well-managed time resulting to reduced cost of operation. Unmanaged time results to high cost of operations (Stefan, 2003, p. 126). Dependability According to Mike (2000, p. 43), dependability is doing things for customers towards receiving their goods and services when they are promised. It is the ability to deliver products and services according to promises made to customers. Dependability ensures the services and products are delivered on time and keeping the customer updated. Morrisons has regular opening and closing times, this makes the customers become fully aware of the hours that they can shop. At Morrisons, dependability is also achieved through constant replenishment of goods on the shelves. This is mainly achieved due to high presence of stored inventory in back office. This allows for demand fluctuations accommodation as new inventory are awaited to arrive to the distribution center. Ineffective use of time usually results to extra cost. Dependability eliminates wasteful disruption allowing the other micro-operations within an organization to operate effectively with eventual savings on time required for the operations. Dependability plays a key role towards reliable delivery. Reliable delivery results to eventual reduced cost of operations within an organization. Therefore, dependability eliminates or reduces the operations costs in Morrisons. Flexibility Flexibility involves a clear result of responding to a dynamic environment by an organization to fit within the change with their products and services as the way it does its business as illustrated by Greasley, (2009, p. 67). Flexibility involves the capacity to change operations and comprises the capability to change the production volume, time required to produce, mix of different products and services produced, and capability to innovate and bring in new goods and services. Flexibility involves various aspects including the ability to handle variations of volume, ability to handle exceptions from customer requirements, ability of handling faster requirements and demands, and ability to handle the need for extra services. At Morrisons, customers are offered an option to customize food with self-serve salad bar that enables them to make their own salad with their own choice of ingredients. At Morrisons, flexibility also differs seasonally hence varying the products sold per season. They are some sections set aside for different products found in different seasons. Flexibility in Morrisons assists in adapting to changing circumstances quickly with little disruption to the operations. Flexibility also assists in changing over between tasks quickly with little or no wasting of time and capacity. It assists in coping up with seasonal fluctuations in demand of products at Morrisons. This leads towards keeping the operation on schedule when unanticipated events interrupt the operations planned. This result to reduce effects on the operating costs of Morrisons. Flexibility is known to save money as it speeds up responses. Failure by Morrisons to become flexible results to high operating costs as the firm is unable to become flexible to its operations. Inability to change the volume of production as customer demands increases results to increased cost of operations in Morrisons as it tries to adapt towards increasing demands. This is due to high wastage as the product as season becomes high for some products. Recommendations Reduction of operating cost should be the first priority of Morrisons and any other organizations. This is towards ensuring profit-making business that as well satisfies customers though its products. This can be achievable through good adoption of the four mentioned performance strategies of operations management including quality, speed, flexibility, and dependability. It is recommendable for Morrisons retailer to adapt a high flexibility towards its operations and products so as to decrease its cost of operation. This can be easily achieved by ensuring it sets aside a section that caters for products that varies with season. It is also recommendable for the Morrisons to put quality of its products and services among its first priorities. Speed of delivering the products and services to its customers will also be a major determinant of reducing the cost of operation. Speed is also a crucial aspect that should be put into consideration at Morrisons. This is terms of increasing unit flow with less delay and customer serving time. This will play a key role towards the reduction of operating costs significantly. Cost is increasingly crucial in today’s climate. Therefore, for the Morrisons to be able to increase sales at a lower operating cost, then it should lay a lot of emphasizes on the four performance objectives that include quality, speed, flexibility, and dependability Nigel, Stuart & Robert (2007, p. 87). Conclusion In conclusion, it is crucial for operating cost to be reduced as low as possible as a way of attaining good delivery of products and services. This will be achieved quickly because of maintaining high quality of products and services and fast delivery of services and products in terms of speed. It will also be attained though reliable delivery of products and services or dependability as well as flexibility in terms of wide range of products, changing products and service timing as well as changing the volume of products or services delivered to customers. Lowering the operation cost means lowering the overall cost of products hence making the organization to be in a better position that its competitors. This will enable Morrisons to draw and retain more customers as they maintain the quality, flexibility, dependability, and speed of their goods and services to their customers. All the operations managers should ensure they manage activities, decisions, and responsibilities of their operations towards ensuring reduce operations cost. Production and delivery of products and services should as well be managed towards ensuring reduced cost of operations. References Andrew, G 1999, Operations management in business, Nelson Thornes, Michigan. Greasley, A 2009, Operations Management, 2nd edition, Wiley, New York. Hayes, H & Scholes, J 2003, ‘Organization operation management strategies’, Journal of Operations Management, vol. 9, no 4, pp. 124-132. Mike, P 2000, Operations management, Pearson South Africa, Johannesburg. Nigel, S., Stuart, C & Robert, J 2007, Operations Management, Prentice Hall/Financial State University, London. Slack, N., Chambers, S & Johnston, R 2007, Operations Management, 5th edition, Prentice Hall, London. Stefan, A 2003, Strategy and organization in supply chains, Springer, California. Read More