Tesco Operations Management Issues - Case Study Example

Table of Contents Executive Summary 2 Analysis of the 4 V’s 3 The Layout, Flow and Use of Process Technologies 4 Evaluation of performance objectives5 Conclusion 7 Reference 8 Executive Summary Operations management deals with the core processes of a business. It involves the monitoring, control and implementation of job flows that would help the entire business to be executed smoothly. In today’s complex business environment, efficient operations management will alone decide the fate of a business. In order to understand the importance of an operations management in a business, a live survey was conducted in a Tesco superstore. The objective of the visit was to visualize the real life execution of work flow and job process in the store. It was found that most of the activities had predefined work flow. Signboards with directional arrows were found to hang from the ceiling. Commodities were segregated on the basis of different parameters, each type being found at one place. The positioning of items was so done as to optimise space and also allow easy access to the customers. An interesting feature of the store is the open space that facilitates movement of products as well as customers. The entire arrangement has been designed in a way that ensures minimum collision between people moving inside the store. Surveillance cameras are installed at strategic points that keep an eagle eye on possible shop lifters. Analysis of the 4 V’s In operations management, the 4 V’s are commonly defined as volume, variety, variation and visibility. In a large supermarket like that of Tesco’s, all of them could be sensed, though in varying proportion. (Slack N., et al, 2007) The supermarket offers only one service that being providing commodities to customers. However, this is not the all. The uniqueness of the super market lies in the fact that it provides a plethora of goods and other necessary items for sale. It allows the customers the freedom to shop groceries, garments, accessories, cosmetic products, beverages and toiletries all at the same place. In addition to this, customers can also enjoy free home delivery services in case their purchase bills exceed certain pre determined limits. The volume of operations is thus, very high. Continuing from the volume analysis, the variety of services that a customer receives from the supermarket is high. It also needs to be mentioned that it depends on the customer whether she would like to enjoy the whole range of services provided. For example, many people were seen to visit the garments and electronics goods section but none of them purchased from there. In the strictest sense of the term the variety is very high. The store which was visited had maximum number of customers purchasing grocery and food items. Variation in sales happens depending on the product. Generally, food items have a moderate level of demand. Garments are in high demand only in certain seasons. However, variation in sales was also experienced throughout the day. Towards the evening, there was a rise in the number of customers purchasing hard drinks, beer and fruit shakes. Visibility, as defined in theories of operation management, is very low. Customers seldom can see how the shelves are getting filled up or the source from where frozen foods are obtained. Most of the rearrangement is done during the early morning or late night after the store gets closed for customers. The Layout, Flow and Use of Process Technologies In a supermarket, the layout and flow of various products are of paramount importance. It has to be borne in mind that placing of the products plays an important role both for the customers as well as the service provider. In the visited store, the layout was more like a process layout. Items of same kind were placed at one place. Among the items of same kind, the heavier ones were placed in a manner that would make it easy for the customer to carry it. Personal items and toiletries were found to be arranged in columns, the bigger packets forming the base and the smaller ones towards the apex. In any case, there was enough space for a trolley accompanied by a person to move around without any hindrance. To provide flexibility to vendors, bulk products were arranged near the exit gates. This was done presumably to reduce time and resources needed for bringing in the products. Frozen foods like chicken and beef are treated specially. They are procured at temperatures that are same like that of the store refrigerator. The lighting and air circulation was maintained scientifically so that the atmosphere remained odour free. Consumption of beverages inside the premises of the store is strictly prohibited. The theoretical terminology defines process technologies as the method used to deliver services. Usage of Information Management techniques have been the most prominent type of processes used in the supermarket. The procurement of a particular good is only done when it reaches the minimum levels of inventory. There are systems that ensure that orders for replacement are met just in time. This saves the company from costs of storage. In case of perishable commodities, special care is taken to ensure that the commodities remain farm fresh all throughout the day. In case of consumer durables and garments, demand fluctuates and so they are treated somewhat casually. The company uses its collaboration with a local transport company to provide customers with free home delivery. Evaluation of performance objectives The five performance objectives on which the efficiency of any operations system is measured are dependability, quality, speed and flexibility and cost. The aspect of quality has two bearings. Externally, it will influence the customer’s choice to continue buying; internally it will reduce rework and costs for the company. In the super store, the quality of service was laudable. Consumers could easily reach for what they wanted. They did not have to stand in long queue for payment. The company also had armed personnel to prevent people from behaving indecently. There were cameras and anti theft devices that took care of shop lifters. The dependability in the case of the store can be analyzed through their stock of goods. Most of the products were available sufficiently in all type of size and prices. Vegetables were fresh and so were the sea foods. Beverages, yogurt and juices were chilled. The huge footfall at the store was another measure of the dependability the store enjoyed. Flexibility in the true sense of term was not witnessed in the store. It was learnt that that since the store follows a fixed format of layout, changing their system quite often might invite unnecessary complications. However, the range of products was always updated as any other market. The speed of operations was found to be consistent with the volume of business. Large entry and exit gates ensured that there were no bottlenecks at these strategic points. Products that are always in demand like food items are arranged to allow access from all sides. This avoids creation of queue. The payment counters are all well equipped with required staff and credit card readers. As already discussed, there is enough space which makes customers with huge purchases to move to the payment counters smoothly. The cost component of the performance could not be analysed due to unavoidable circumstances. However, the general belief has been that cost is the manifestation of the performance of other variables. The company can reduce costs by keeping a tab on the inventory levels. It will also benefit if customers are delighted by the service. Utilization of available space to the fullest extent will contribute effectively in earning value for the cost of space incurred. Conclusion The entire operational aspect was made to seem very complex though considerable planning and monitoring has gone into the process. Overall, the pace of business was a certification of the satisfaction customers probably derived from the services of the store. The only suggestion could be an improved medical outlet. The current one though serves effectively, lacks in stock of medicines. Reference Slack N., et al, 2007, Operations Management, Edition: 5, illustrated, Published by Prentice Hall/Financial Times, ISBN 0273708473, 9780273708476 Read More