Evaluation of Process Design and Facility Layout in a Service Operation (Marks and Spencer) - Coursework Example

Evaluation of Process Design and Facility Layout in a Service Operation (Marks and Spencer) (words 2457) Table of Contents Executive Summary Introduction 2. Marks and Spencer – analysis of operation strategy 2.1 Key characteristics of the store’s operational activity 2.2 Layout of existing facilities 2.3 Customer retention strategies 3. Conclusions and Recommendations References Appendices Executive Summary When operating within the modern market, firms need to ensure that they take all measures in order to face effectively their competitors. Otherwise, it is very likely that they will not manage to survive in the long term. On the other hand, the development of technology has resulted to the increase in the customers’ demands and as a result all firms internationally are called to improve their facilities and their services offered to the customers in order to keep their performance at high levels. In this context, the development of a strategy that will regulate all issues related with the design and the application of the firm’s operational plan is necessary. However, appropriate measures should be taken in order for the plan described above to be effective towards the targets set by the firm’s managers. Regarding this issue it is noticed by Parnell (2003, 16) that “in many respects, the evidence for the existence of a strategy can permeate an organization; sharing strategic information with lower-level managers and employees may enhance both job comprehension and organizational commitment; hence, the arguments for a "public" strategy are intuitively obvious”. In other words, the operation strategy of any firm within the international market is closely related with the communication and the cooperation developed in the internal environment. In the case of Marks and Spencer examined in current paper, it seems that appropriate coordination strategy has been developed within the company (all aspects of operations strategy actually are considered to be effective) and thus the firm has managed to meet the customers’ demands (as it can be proved by the testimonials of its customers used throughout this report). 1. Introduction As already stated above, in order for firms to be successful within their market, they need to develop the appropriate operation strategies. This is a task that is normally delegated to the corporate managers. However, there are times that the latter fail to meet the demands of the customers mostly because they cannot understand the needs of the particular market and their firm’s strength to respond to these needs. Indeed, the study of Rand (1999, 97) proved that “businesses fail because management does not have effective control of the business as management is too far removed from revenue-producing processes; visibility is nonexistent or, at best, extremely limited”. Because of the lack of appropriate managerial skills, corporate performance can be significantly reduced with all the consequences that this event will have to firm’s profits and its survival in the long term. For this reason, it is necessary that the development of the firm’s operation strategy is taking place gradually ensuring that all the relevant requirements are met throughout the progress (from the initial phase of the plan till its application). Moreover, the constant monitoring of the project will ensure that the targets of the firms’ managers will be met and that no unexpected problems will become obstacles towards the realization of the firm’s vision. Towards this direction, Gomez et al. (2002, Ch.15) noticed that “the following ‘stages’ of the firm’s operation management should be examined: inputs (materials, energy, information, management, technology, facilities and labor), transformation (or conversion process) and disposition (marketing and sales)”. However, it is possible that other aspects of the firm’s operational activities are going to be examined when designing a specific operational plan – it depends on the firm’s position in the market, its needs, the demands of the customer and the ability/ strengths of the firm to respond to these demands. Specifically referring to the most appropriate marketing strategy followed by firms operating within the modern market, Aufreiter et al . (2000) suggested that the firms’ marketing strategy should refer mostly to: “the distinct product, channel, and customer groups focusing on specific functional tasks” (Aufreiter et al., 2000, 53). Of course, marketing is just part of the corporate strategy. From the scope of operation management, a firm should focus on the development of appropriate environment, the improvement of communication with customers and the limitation of cost involved. However, necessary expenses should be made at the level that they could help towards the increase of the firm’s profitability. 2. Marks and Spencer – analysis of operation strategy In order to effectively examine and evaluate the operation strategies (and specifically the process design and the facilities layout in Marks and Spencer, the view of its customers (approximate 20) have been gathered, compared and analyzed. These views are presented below into two separate sections: one referring to the process design and the other one to the store’s facilities layout. The store under examination is Marks and Spencer’s central store in Oxford Street. 2.1 Key characteristics of the store’s operational activity (process design) All customers asked regarding the process design applied in Marks and Spencer were almost equally satisfied. The following comments were made regarding the quality and availability of goods: ‘the goods are of a great range’ (65%), ‘almost all sizes of goods are available’ (70%) and that ‘there are significant sales regarding specific goods’ (45%). It seems that the products of the firm are appropriately controlled as of their quality while the stock of the particular store is regularly controlled in order to avoid possible lack of products requested by the customers. On the other hand, there is a particular provision made for specific parts of population, like those who wear sizes higher than the normal and for this reason a special collection, the Plus-collection, has been placed in a specific place in the women’s wear section. There are also many products related with sports (in a special place within the store) as well as with women in pregnancy (in women’s wear section). Customers had been also satisfied with the management of the store. More specifically, the store operates for many hours continuously on a daily basis (except Sunday), a fact that helps customers to have a more convenient plan regarding their shopping (an issue that was considered to be extremely positive for all of 20 of the participants in current research). However, the hours of operation are not the only positive aspect of management (along with the stock management and the quality control); in fact there are other issues that should be considered to be an achievement of the firm’s leaders and especially of the store’s management. More specifically, the store includes apart from the retail department, a supermarket and a café. Both of these departments are considered to be extremely helpful towards the development of the store’s performance. Also, the existence of these departments is extremely valuable for the customers who can combine their shopping in the store’s retail section with the shopping of food and beverages. In fact, approximately 18 of the 20 participants found the co-existence of retail store with the supermarket as an innovative practice that it has been proved to be extremely helpful for most of the store’s customers. On the other hand, 16 out of 20 customers noticed that the goods are appropriately placed, clearly distinguished as of their sizes and their quality. Moreover, the store’s customers have the option to change the goods bought within a specific period of time but with no extra cost. Other advantages of the store’s operational structure are the following ones: many employees in each floor help the customer with their requests, various methods of payment are available to customers, the environment within the store is clear and the whole area is appropriately air-conditioned. All the above advantages of the firm’s operational structure were highlighted by the majority of the customers participated in the survey. However, there were 2 of them that supported that because of the crowd gathered within the store the customer service is not of the appropriate level. But such a view could be considered as rather unclear since the number of customers within the store could be expected to be increased during specific periods (like Christmas etc) and specific hours (early afternoon). It should be noticed here that the survey was conducted during the early afternoon hours of last Friday. 2.2 Layout of existing facilities The layout of existing facilities should be considered as absolutely successful. More specifically as all the customers interviewed supported facilities are appropriate placed at each floor while there are even facilities available for mothers with babies. On the other hand, there are fitting rooms in all departments allowing the customers to check the size of the clothes before buying them. Other facilities included (as mentioned above) a café – next to the supermarket. The access to these facilities is easy while clear signs guide the customers to the facilities placed at each floor. It should be noticed that the facilities have been made in order to service many people simultaneously so there are just few chances for someone to wait when entering the relevant sections. 2.7 Customer retention strategies As it is proved by all issues developed above, the firm applies an effective operation management technique trying to focus on the customers’ needs. The role of the firm’s leaders towards the successful communication between the firm and the customer is significant. In this context, O’Neill (2002) stated that leaders should deal with the following problems: “a) what were the critical success factors in previous successful change efforts? b) what caused other efforts to fail? Are you prepared to take on the obstacles? c) who can veto? Can anyone say yes? d) what is the organizations risk profile? e) what has created a window of opportunity? How long might it last? f) what is the up side for stakeholders? g) what Have We Learned?” (O’Neill, 2002, 15). In other words, leader has a primary role in the development of corporate activities including the initiatives related with the operation management. If these initiatives are innovative, then it is very likely that customers’ interest on the firm’s product will be kept at high levels. Regarding this issue, it is mentioned by Kesler (2000) that innovation can have a significant role in the improvement of corporate performance, but it would be necessary to be expanded at the following sectors: “1. Finance, 2. Process, 3. Offering and 4. Delivery” (Kesler, 2000, 26). In the case of Marks and Spencer, the firm’s leaders have focused on the development of an innovative operational scheme (under the conditions explained above) and for this reason the performance of the firm is effectively supported. Particular interest should be also paid to the whole structure of supply chain management in the specific company. The importance of supply chain management as a primary tool for the development of the firm’s performance has been extensively highlighted in the literature. In this context, it is noticed that ‘supply chain management has become an important part of strategic planning in both large and small businesses since the 1990s as firms increasingly choose outsourcing as an externally-driven strategic growth path’ (Krishnan et al., 2001, 259). The appropriate supply chain management leads to the satisfaction of customers’ demands and in this way the firm’s performance is improved. Because of the above, Krishnan et al. (2001, 159) found that ‘supply chain management has become an important part of strategic planning in both large and small businesses since the 1990s as firms increasingly choose outsourcing as an externally-driven strategic growth path’. Indeed, in the case of Marks and Spencer a significant part of corporate initiatives are related with the appropriate cooperation with suppliers, in terms that the products to be available on time across the firm’s stores. In other words, all potential strategies for keeping customers satisfied have been applied by Marks and Spencer (leaders’ initiatives that are characterized by innovation and appropriate communication with suppliers). Other managerial techniques have been also incorporated within the firm’s operation strategies in order to keep customers satisfied. These techniques are best represented by the study of Cook et al. (2001) who referred to the following tools of operations management: ‘making and keeping relationships, implementing new technology in the supply channel, the use of forecasting to increase supply chain effectiveness, outsourcing to increase efficiency, and cost management as a strategic weapon’ (Cook et al., 2001, 14). All the above techniques contribute towards the increase of firm’s performance and the appropriate handling of all customers’ requirements. 3. Conclusions and Recommendations In order to understand the operations strategies followed by Marks and Spencer we should refer primarily to the factors that influence the effectiveness of firm’s operation strategies. At a first level, it is stated by Robertson et al. (1995, 547) that “because private sector organizations are driven primarily by market or consumer preferences, organizational effectiveness is more readily measured in terms of efficiency and profitability”. In practice, the effectiveness of operations management can be measured used a series of frameworks, one of which is the Performance Reference Model in Figure 1 (Appendices Section) which follows a specific path in order to evaluate the performance of corporate initiatives. More specifically, the particular Model “begins with strategic analysis to determine what must be done, and with what priority; business activities are identified, based on strategic goals and business drivers from the vision and mission of each organization” [2]. Other similar Models could be used in order to examine and evaluate the effectiveness of the various corporate decisions. The use of the appropriate model will be based on the firm’s characteristics and culture and the structure of the operational network. In any case, the relevant decision will be taken by the firm’s managers. Regarding this issue, it is mentioned by Neely (2002, 295) that “the key benefit in the process of deciding what to measure appears to lie in the fact that the process forces management teams to be explicit about their priorities; without precise definitions and targets it is impossible to establish appropriate measures for customer satisfaction”. The operations strategy followed by a specific firm must be in accordance with the firm’s targets and its mission in the long term. As Chase et al. (2006, Ch 5, 2) supported: ‘a process that does not match the needs of the firm will punish the firm every minute that the firms operate’. In the case of Marks and Spencer the facilities available to the customers, the structure of the store, the availability of products and the communication with customers prove that the firm’s operations strategy has been appropriately designed taking into account the long history of the firm in the retail sector and the customers’ demands in accordance with the continuous developments taking place within the international market (also in the local one) like the appearance of new competitors, the development of technology and the increase of substitute products. Especially regarding the process design and the facilities layout as described above, the strategy followed by the managers of the specific store should be considered as absolutely successful. Currently the firm’s managers have to face a significant challenge: to respond to the needs of Plan A, a 5 – year corporate plan that aims ‘to tackle some of the biggest challenges facing our business and our world. It will see us working with our customers and our suppliers to combat climate change, reduce waste, safeguard natural resources, trade ethically and build a healthier nation’ (see corporate website, [1]). It seems that the above target will be achieved in accordance with the terms set in the relevant plan. References Aufreiter, N., Lawyer, T., Lun, C. (2000). A New Way to Market. The McKinsey Quarterly, 53-58 Chase, R., Jacobs, R., Aquilano, N. (2006) Operations Management for Competitive Advantage, 11e. The McGraw-Hill Companies Cook, J. S., Debree, K., Feroleto, A. (2001). From Raw Materials to Customers: Supply Chain Management in the Service Industry. SAM Advanced Management Journal, 66(4): 14-23 Gomez-Mejia, L., Balkin, D. (2002). Management, 1e. The McGraw-Hill Companies Kesler, G. (2000). Four Steps to Building an HR Agenda for Growth: HR Strategy Revisited. Human Resource Planning, 23(3): 24-38 Krishnan, H., Park, D. (2001). Supplier Selection Practices among Small Firms in the United States: Testing Three Models. Journal of Small Business Management, 39(3): 259-269 Neely, A. (2002). Business Performance Measurement: Theory and Practice. Cambridge University Press, Cambridge O’Neill, R. J. (2002). Governments Change-Management Challenge: Key Questions to Which Government Leaders Should Find Answers as They Embark on Systemwide Reform. The Public Manager, 31(1): 15 Rand, T. (1999). Why Businesses Fail: an Organizational Perspective. Emergence, 1(4): 97 Robertson, P. J., Seneviratne, S. J. (1995). Outcomes of Planned Organizational Change in the Public Sector: A Meta-Analytic Comparison to the Private Sector. Public Administration Review, 55(6): 547-558 Websites http://www.marksandspencer.com/gp/node/n/42966030?ie=UTF8&mnSBrand=core [1] http://www.balancedscorecard.org/bscit/prm.html [2] Appendices Figure 1 – Performance Reference Model [2] Read More