Operations Management and Competencies of Northstar HyperMall - Case Study Example

Operations Management and Competencies of Northstar HyperMall Before presenting the solutions to the problems identified by General Manager, it is very important to analyse what have been the major competencies of Northstar HyperMall. Competencies of Northstar HyperMall Northstar HyperMall was operating successfully in business because of various reasons. The organisation has been given five star rating. The operations of Northstar HyperMall were different from other shopping centres because it has been providing security, car park facilities and food bar services around the complex. HyperMall had a nursery and crèche facilities managed by national organisation and the size of HyperMall was equal to the size of several football pitches. Furthermore, easily accessible location, excellent transport facilities, good pedestrian access and underground car park access were some other characteristics of HyperMall. Identification of Problems 1) Like other branches of Northstar HyperMall, the branch in the UK did not have any partnership with different suppliers or other organisations. The usual partners of company did not have their offices in the UK; therefore, company had to hire staff. 2) Since the usual partners did not have offices in the UK, therefore, hiring security staff was hired and managed by Northstar. 3) The company staff was also facing issues from other members of staff such as help staff, restaurant staff and suppliers. 4) Northstar did not have partnership with suppliers in the UK like its other branches, therefore, this branch in the UK was facing issues from supplier including poor quality of materials, quantities issues, late delivery and reliability concerns. Moreover, organisation staff was also complaining about the rudeness and unhelpful attitude of delivery and supplier agents. 5) Customer complaints about rudeness of service staff, facilities and security staff were also increasing. Theoretical Implications Before presenting the solutions to above-mentioned problems, it is very important for General Manager of Northstar to know how to go through the process of improvement. General Manager should follow PDCA model of Edwards Deming (Monks, 1996). This model can be used by Northstar for continuous improvement or Kaizen and its components are plan, do, check and act. The General Manager should develop an effective operations strategy. An appropriate operations strategy is the determinant of effective and efficient operations management (Galloway, 1993). Since, Northstar has the advantage over other shopping centres, therefore, before creating a strong operations strategy, alignment of operations to market requirements is very necessary (Nigel, n.d.). The second major aspect that General Manager should consider is that to achieve customers’ management all aspects of operations management should be taken into consideration. Operations Management does not only deal with production rather it deals with decision making related to manufacturing of goods according to their specifications, exact amount delivery as decided by schedule and incurring minimum costs (Shim & Siegel, 1999). The overall customer satisfaction can be only achieved, if quality of service is analysed at each stage of service layout. Chase (2006) has identified four major stages of value added services, through which an organisation can satisfy its internal and external customers. These sections include information, problem solving, sales support and field support. Information is the ability of a company to collect data regarding the company’s performance, process efficiencies etc. and then share it with external customers to improve the quality of services. Northstar has not been taking external customers in loop to reduce raised concerns. Through problem solving Northstar can reduce the quality concerns. The third section of sales support can help Northstar to enhance sales by putting more marketing efforts. Since, customers are complaining about sales staff attitude therefore, a special focus should be given at this side. Moreover, it is very important to enhance the performance of support staff such as suppliers. For this company should think about backward integration. Solutions Problem # 1 Since the financial position of the company has not been mentioned, therefore, at this point of time, I cannot suggest backward integration to company. However, Northstar can create cross-functional teams and cross-enterprise teams. The cross-functional teams will be responsible to coordinate the interaction between supply chain functions, whereas, cross-enterprise teams will be responsible to coordinate between supply chain organisations (Lowson, 2002). Problem # 2 Grand & Toy gives great consideration towards explicit services, including those that are readily observable. The company is promoting on-the-job training, weekly meetings and sales techniques (Donald & Waters, 1999). Northstar also needs to improve its explicit services by encouraging on-the-job training of security staff and sales staff. For trainings, the tasks should be grouped into jobs (Berman, 2007) and relevant trainings should be offered to employees, however, every employee should understand different job tasks. For example, sales technique should not be the duty of sales staff only but security staff is also responsible to please the customers. In this way, understanding to others’ task of company’s members would increase, thereby, increasing their considerations and understanding for each other. Four “Vs” of operations management are considered very important in managing the operations of a company (Slack, 2007). If Northstar is rated on the given chart, then ideal rating of Northstar will be as follows. Northstar can be high in Visibility, high in Variation, high in Varity and low in Volume. Problem # 3 Development of a quality service culture is very important for Northstar. Northstar can follow the qualities of a strong service culture defined by Bassett. These qualities include “responsiveness to customers, cost and quality sensitivity, volume insensitivity, ethical concerns, attuned to attuned to in-house heros as models, energetic & enthusiastic, open to experiment & change, goals/results focused, errors cannot be hidden, skills not capital intensive, invests heavily in training and sound service operations models applied (Bassett, 1992).” Each characteristic of this strong service culture model can help Northstar to improve the quality of its services. Problem # 4 The problems with suppliers can be categorised under procurement issues of operations management. Northstar HyperMall has two options of procurement including single source and multi-source (Chary, 2004). To solve procurement issues, Northstar should go for multi-sourcing because company has recently started its operations in the UK and it lacks trust in any one supplier. The economies of scale is not a problem for Northstar and the major issues are quality problems, delivery issues, order alternations etc. therefore, best suitable strategy is multi-sourcing, which will increase competition among suppliers, thereby, benefiting Northstar. The company should maintain a regular profile of each of its supplier. A sample supplier profile has been given. In this profile four criteria have been mentioned, based on which the company can select the best supplier and switch off from multi-sourcing strategy to single-source strategy. Source: EIPM 2004 Problem # 5 For meeting the expectations of customers, and to eliminate their complaints, organisation should do a perception-expectation gap analysis. A sample, perception-expectation gap analysis has been presented below. It highlights where the company needs improved by identifying the gap. Customer satisfaction can be attained by influencing their perceptions and expectations of service delivery (Johnston, n.d.). By identifying the gap and presenting strategies, Northstar can reduce its customers’ complaints. Perceptions-Expectations Gap Gap Actions required to ensure high perceived quality Main organisational responsibility Gap 1 Customers expect good facilities in the shopping centres Northstar should invest more towards the development of facilities Gap 2 Customers expect high support facilities from Northstar because of its existing-image Northstar should give focus towards training the security staff, service delivery staff Gap 3 Customers have high expectations regarding quality for the products of Northstar Northstar should give focus towards supply management concerns Finally, apart from the above-mentioned factors, Northstar should evaluate other factors that affect customer satisfaction. For example, if customers are facing waiting issues, then how to increase focus on providing fast services through technology and other means (Chase, 2004). Reference 1) Bassett, A. G. (1992) Operations Management for Service Industries: Competing in the Service Era. [Online] Greenwood Publishing Group. Available from: http://books.google.com.pk/books?id=Mr87YPNe5v4C&dq=operations+management%2Btraining&source=gbs_navlinks_s [Accessed 26 February 2010]. 2) Berman, (2007) Retail Management. [Online] Pearson Education India. Available from: http://books.google.com.pk/books?id=Tp9yPJF58A8C&dq=operations+management%2Bstaff+training&source=gbs_navlinks_s [Accessed 26 February 2010]. 3) Chary, (2004) Production and Operations Management. [Online] Tata McGraw-Hill. Available from: http://books.google.com.pk/books?id=qixN5rBGERUC&dq=multi+sourcing+in+operations+management&source=gbs_navlinks_s [Accessed 26 February 2010]. 4) Chase, B. R. (2004) Fundamentals of Operations Management. [Online] Available from: http://books.google.com.pk/books?id=PxqfFcvSbDcC&dq=operations+management%2Bcustomer+satisfaction&source=gbs_navlinks_s [Accessed 26 February 2010]. 5) Chase, (2006) Operations Management for Competitive Advantage. [Online] Tata McGraw-Hill. Available from: http://books.google.com.pk/books?id=kNRkTmMCXDsC&dq=operations+management%2Bcustomer+services&source=gbs_navlinks_s [Accessed 26 February 2010]. 6) Galloway, L. R. (1993) Principles of Operations Management. [Online] Routledge Publishers. Available from: http://books.google.com.pk/books?id=Y6QOAAAAQAAJ&dq=operation+management&source=gbs_navlinks_s [Accessed 26 February 2010]. 7) J. Donald, C. & Waters, D. (1999) Operations Management. [Online] Kogan Page Publishers. Available from: http://books.google.com.pk/books?id=pY9pMcACHjIC&dq=operations+management%2Bstaff+training&source=gbs_navlinks_s [Accessed 26 February 2010]. 8) EIPM. (2004) Supplier Selection Criteria. [Online] Available from: http://www.eipm.org/portal/intenda/post-learning/EIPMTools/Supplier%20Selection/Supplier%20Selection%20Criteria.pdf [Accessed 26 February 2010]. 9) Johnston, (n.d.) Service Operations Management [Online] Pearson Education india. Available from: http://books.google.com.pk/books?id=vNhBqNRgXlsC&dq=operations+management%2Bcustomer+satisfaction&source=gbs_navlinks_s [Accessed 26 February 2010]. 10) Lowson, H. R. (2002) Strategic Operations Management: The New Competitive Advantage [Online] Routledge Publishers. Available from: http://books.google.com.pk/books?id=2jSubx4T1pQC&dq=operation+management%2Bbackward+integration&source=gbs_navlinks_s [Accessed 26 February 2010]. 11) Monks, G. J. (1996) Schaum’s Outline of Theory and Problems of Operations Management. [Online] Mc-Graw-Hill Professional. Available from: http://books.google.com.pk/books?id=UlzzVhyBpK4C&dq=operation+management+theory&source=gbs_navlinks_s [Accessed 26 February 2010]. 12) Nigel, S. (2002) Operations Strategy [Online] Pearson Education India. Available from: http://books.google.com.pk/books?id=W 0IOqX0Kc8C&dq=develop+operations+strategy&source=gbs_navlinks_s [Accessed 26 February 2010]. 13) Shim, K. J. & Siegel, G. J (1999) Operations Management. [Online] Barron’s Educational Series. Available from: http://books.google.com.pk/books?id=AbFUpMcYPZUC&dq=operations+management+scope&source=gbs_navlinks_s [Accessed 26 February 2010]. 14) Slack, et. al (2007) Operations Management., 5th edn. Harlow, UK: Financial Times Prentice Hall. 15) Case Study Read More