Operations Management of an Organization
Operations management is referred to as the area of management that deals with overseeing, designing and controlling the procedure related to production and redesigning business operations while producing goods as well as services. Operations management deals with the design as well as management of products, processes, services and supply chain (Allen, Todd and Alting, 2009). The purpose of the present report is to analyse and describe operations process of the organization like Waitrose. Further it includes the ways through which operations can be enhanced from operational, technological and strategic perspective so that effectiveness, efficiency and customer satisfaction can be enhanced. This is to reach the optimal level and to attain the vision and mission of the company.
The scope of the particular study will concentrate on the different level of strategy. It includes development of operations strategy and identification of strength, weakness, opportunity and threat. It covers information technology, internet banking, and quality management as well as performs capacity plan and management of process even identification of KPI for the different division.
Waitrose has been founded in 1904 by Wallace Waite, Arthur Rose and David Taylor. The company began as a small grocery store. It is a chain of British supermarkets which forms the food retail division of British largest employee owned retailer that is John Lewis Partnership (Anand and Ward, 2004.). The firm has around 300 stores across UK as per 2011. Waitrose stores vary considerably in sizes. The company operates its own delivery service that exists in certain stores. This includes delivery of goods that are ordered through internet and are served from the local branch.
The vision and mission statement of the company like Waitrose is as follows:
The vision of the company is to become market leader in the supermarket industry. The company continues to dominate on product and wants to make differentiation in its services so as to achieve its long term targets. Further its vision is to strengthen the supply chain which would depend on availability, cost effectiveness, staff involvement and resilience.
Waitrose is British supermarket chain. The mission statement of the company is that it wants to become champion in British produce, treading lightly on the environment and to support responsible sourcing and to treat people in fair and equitable manner.
The structure of company consists of board of directors under which the company secretary and general managers operates. Under general manager various departments carries of different tasks. This includes production, purchase, marketing, human resource management, finance, services management as well as research and development.
Production department is defined as the functional area that is responsible for converting input into finished outputs through series of processes. The production manager of Waitrose is responsible for making sure about raw materials that are offered and transformed into finished goods in an effective manner (Anh and Matsui, 2011). It is the responsibility of the production head to ensure that work is carried in an effective manner. Further he needs to supervise the procedures for making task more effective, efficient and more enjoyable. There are various sub functions of the production department which are as follows:
The production and planning department: This department of the company will set standards and targets for each segment of the production process (Bellgran and Safsten, 2009). The quantity and quality of the products that are coming in production line will be monitored closely by particular department of Waitrose. The business that focuses on lean production quality is taken into account by different employees at every stage.
The purchasing department: This section has the responsibility to provide material, components and equipments that are essential for carrying out the process of production smoothly (Chary, 2009). It has major role in making sure that the stock arrives on time and in right quality within Waitrose.
The stores department: The role this department is critical in stocking up necessary tools, spares, raw material and equipments that are essential for servicing the manufacturing process. In case when sourcing is unreliable then buffer stock needs to be kept and computerised stock control systems are used by Waitrose in order to keep track on the stock without affecting the line of production.
The design and technical support department: This section of Waitrose has the responsibility to search for new products and bring modifications in the existing ones. It estimates the cost of producing various quantities by making use of different methods (Craighead and Meredith, 2008). Moreover it is responsible to design and test the new product processes and product types.
The works department: It is concerned with manufacturing of products. It also includes the maintenance of production line and other necessary repairs. This department has responsibility for quality control as well as inspection.
For the purpose defining and understanding the issue it is essential to recognize that each organization needs to consider three levels of strategy. These can be as follows:
Corporate strategy: The corporate strategy of the company is to provide high quality food product at low price to the customers (Fitsimmons, 2009). The corporate strategy of the business is to invest huge amount of money in advertisement and promotion so that it can create awareness of the product in the market place.
Business unit strategy: Waitrose is combining convenience of modern market with the expertise of specialist retailer. Thus strategies of various business unit is to develop strategic vision and direction that assist in achievement of overall organizational goal (Esper and et.al., 2010). With the achievement of business unit plan overall performance of the company is attained in an effective manner.
Operations strategy: This strategy of business is the company plan for the ways in which they can operate in order to achieve set targets. The operational strategy of the company is to make use of low inventory levels and prices in order to generate faster sales. By keeping low inventory company can keep the prices low for its customers (Jacobs, Chase and Chase, 2010). This results in increasing demand for Waitrose products. When high demand combines with low prices then it results in increasing sale of the business.
The main objectives of operations management are to assure quality of the products. Moreover it aims at making production of goods within specified duration of time.
The current operations in production are related to producing right goods and services that satisfy the need of the customers. Further this aim to maximize the output with minimum input of resources (Lin, Chen and Chiu, 2010). The current production department makes optimum utilization of manpower and machines so that capacity can be utilized in an effective manner. Operations in production are related to making selection of right kind of product that is crucial for the success of Waitrose.
The current operations of production department suffer with certain deficiencies. The major problem occurs in handling material. This results in increasing the cost of operations which creates impact on the overall cost of product (Mutch, 2008). Another major deficiency is related to the capacity planning. This means that availability does not match with the demand. Unclear description of job is another major issue in the production department.
For the purpose of developing operations strategy and process in order to meet corporate and business strategy in Waitrose it is important to determine the company’s production department internally as well as externally (Pileggi and et.al., 2007). In order to investigate it internally it is essential to determine the strength and weakness of Waitrose. Further for the external analysis it is significant to examine the opportunities and threats of business.
Strength: The Company has around 18000 products. Further the company promotes fresh and healthy products for its customers. The firm owns its farms and ensures in offering best standards in quality.
Weakness: The Company largely depends on its product range with majority of sales coming from its brand. The firm has major weakness in offering high priced products at higher quality.
Opportunity: The organization has major opportunity in diversifying its activities into other non food products.
Threat: Waitrose’s major threat is of the increasing cost of labour and rates of interest.
In accordance with the competitive strategies there are three main strategies. These are as such:
Cost leadership strategy: This strategy can be successful to the business. Under this, Waitrose can market its products at low cost so as to gain recognition in the market. This strategy would assist company in becoming market leader as it would attract large number of customers towards the company (Rosemann and vom Brocke, 2010). This can be gained by lowering the cost of operation. Under this Waitrose can be a low cost producer.
Differentiation strategy: The aim of such strategy is to offer products with unique features and characteristics so that it can stand differently within the market. Under this, firm can add new services so that it can achieve its aim in an effective manner. Moreover, this would assist in meeting the expectations of the customers.
Focus strategy: This strategy can be employed by the company wherein it can target different segment of population so that it can satisfy their needs.
The company like Waitrose can implement operations strategy such as cost leadership and focus so that it can attain its aim in an effective manner. The company can determine the potential suppliers who can make delivery of raw material in cost effective manner. By implementing such strategy the company can achieve huge profitability. This can be implemented by the business by identifying potential suppliers that can make delivery of quality raw material. Further focus strategy can be formulated by the firm in identifying the segment where it can make maximum sales. Such operations strategy would have huge impact on the overall performance of Waitrose.
The role of information technology is very huge within the cited organization. The Waitrose is active into the online shopping portal so it is highly required that they should manage their web page. With the help of this factor the organization can definitely get hold on their operations as well. Through developing the proper web page it could be possible to manage the traffic and the issues like hacking, attack, and server down, site crash could be avoided. The information technology is useful in retrieving the customer's information as well (Rotchanakitumnuai, 2013). It is to acknowledge that whenever the customer visits the web page they choose their preferences so with the help of advance IT solutions the preferences could be saved and the customers could be targeted accordingly. Waitrose can gather the information and could use in a well systematic manner. Currently the website of an organization is highly advanced and technically equipped. The navigation facility is highly excellent and it allows customers to find the category of product in better way (Schneider, 2003). Other than this, the operations management could be improved by using advanced and updated IT methods. E- Business is highly dependent on the internet and the Waitrose has to improve their connectivity as well. Overall the role of IT could be segregated into some categories which are:
Therefore, in this way the information technology and operations management can definitely help in satisfying customer, achieving organizational objectives and most importantly delivering the excellent services to customers.
It is to acknowledge that continuous improvement is the major integral success element for any organization. For the same purpose there is huge requirement of focusing upon the development of new services. In case of Waitrose the development of new services is related to the launch of new website where the company can introduce some different product range and can definitely cater large range of customers (Slack, Chambers and Johnston, 2010). It is clear that most importantly the organization need to design new services. It includes certain steps which are:
Identification of customer's expectations: It is most basic step which helps to understand the needs and wants of the customers. It might assist in developing new kind of services or product. The new website could be dedicated towards the introduction of those products only.
Dealing with suppliers: Once Company is clear with the product range then they need to deal with suppliers or manufacturers as per the target customers and as per the segmentation basis. It might helps in procuring the material or product that could be offered to the customers. The selection of manufacturers or suppliers should be based upon the quality related aspects.
Developing marketing mix: in this case the company has to focus on different element of marketing mix. Above the product and place related solutions has been discovered appropriately (Stonehouse and et.al., 2009). At this stage there is need of setting prices and mainly focusing upon the promotion related aspects. Through effective promotion the new services could be promoted very easily.
Meanwhile all these activities the organization is required to make integration with the technological developments and other financial institution so that the technological and payment related issues could be avoided. Thus these are certain stages of development of new services. Ahead the process is the extended service related marketing mix which should be taken into special consideration by Wait rose.
The process management includes the step of various activities to be done in particular sequence to accomplish the task in a well organized and systematic manner. Here in once the company is clear with their operations and IT related aspects they need to concentrate on the process management. Every activity should be well connected and followed by some logic. It indicates towards the proper time management as well as optimum utilization of resources. Here the organization should commence their process from introducing the product on the web page along with the price tag or information related to any other offer. The product details should be available in detailed way so that customers can gather the information (Trkman and et.al., 2010). Afterwards the organization is required to promote their brand name and need to educate customers about the introduction of new products or items on their web page. It is related to marketing related aspects. Once customers get the information they will visit the web page so company is required to provide easy payment facilities, navigation facilities, the selection process must be proper (Cost minimization and value maximization from an operations management perspective, 2009). Further in case of queries or any feedback the organization is required to address those issues with immediate effect. At last, once the order is placed, the payment has been done then order processing time, shipping time and delivery time needs to be minimized up to highest extent. Therefore it is a complete process which involves the integration of all departments starting from operations (supply chain, procuring the material) to financial (allocating the money to procure material) to marketing (making people aware). In the middle of all these activities HR department and IT department works with full dedication and commitment for the implementation of organizational strategies.
Quality is one of the important aspects of process management. This is referred to as meeting and exceeding the requirement of customers in present and in future. Quality management is considered as recent phenomenon. Under this Waitrose can focus on achieving quality policy and quality objectives to meet customers’ requirements. It is important for Waitrose to manage the quality of food products so that it can make delivery of products as per the specifications of the customers. The role of quality management is essential for making delivery of desired output. The foremost aim of company is to achieve customer satisfaction. There are various dimensions as to product quality. These include performance, features, reliability, durability, conformance, serviceability, perceived quality as well as aesthetics.
In order to manage quality certain framework are designed. These frameworks assist Waitrose in ensuring that product quality are maintained in an effective manner. These frameworks are as follows:
Six sigma: It is one of the major quality frameworks that assist business in reducing the number of defects from the products. It is a technique that is used for the purpose of improving process (Manufacturing, 2015). This quality frame work would assist Waitrose in maintaining the standard of the product and making delivery of the products that are superior in quality.
ISO 9000: It is series of standard that has been developed by International Organization for Standardization. It is effective quality control framework that ensures maintaining of quality in an effective manner.
ISO 14000: It is another quality framework that is similar to that of ISO 9000. It focuses on the manufacturing process as well as product.
Forecasting and capacity planning are the most important aspects that assist business in achieving the goals within specific time duration. With this company can achieve success in future time period. With the assistance of forecasting the company can determine the demand for its products. The concept of forecasting and capacity planning is linked with each other. This is because after forecasting of the demand Waitrose will make plan regarding the volume of products it needs to produce so as to meet the expectations of the customers. Forecasting can be done by business by adopting different techniques such as Delphi and times series forecasting. By evaluating the previous year demand the company can determine volume of products it is desired to produce in future time period (Operations Management, 2015). Forecasting the role of capacity planning is critical. This is because with this company can plan the amount of resources needed to carry of different activities related to production. As per the demand of the products Waitrose has to plan its capacity so that it can meet the expectations of customers in an effective manner. The maximum output rate has to be planned in advance so that Waitrose can achieve its sales targets with effectiveness.
For the purpose of enhancing the operational efficiency of the production department of Waitrose the following recommendations are provided which would assist firm in meeting its targets within specified time duration and ensuring effectiveness.
It is recommended to company to adopt quality frame work such as ISO 9000, ISO 14000 as well as six sigma in order to produce superior quality product. While making production these standards needs to be considered so as to ensure that products manufactured are free from defects.
Further in order to make work flow smooth the management of Waitrose should describe the job in an appropriate manner so that no confusions can emerge while carrying out the actual productions of products.
The company should create various key performance indicators so that it can measure its performance appropriately (Understanding operations management, 2013). In addition to this it would assist the firm in making continuous improvement at regular time interval. This has impacted on the overall performance of the organization.
It is recommended to organization to make forecast of demand so that it can satisfy the needs of customers. This is because this would assist the business in making capacity planning accordingly which would act as an aid in meeting the needs of the clients in an effective manner.
The company should make purchase material; that is less expensive. Further it should also ensure quality. This is important for the business to make production of quality products that are free from defects. This later has impacted on the overall sales and profitability of the business.
It can be concluded from the study that role of operations management is critical for business in planning its strategies in an effective manner. Information technology has imperative role in carrying out the operations of Waitrose smoothly. It has been inferred from the study that quality management is an important aspect that makes sure that product is free from any defects. Thus it becomes important for the organization to adopt various quality frame work as these would assist in formulating products as per the standards. By adopting these, Waitrose can develop products as per the specifications of customers and can meet their expectations effectively.
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