Operations Management - Tesco
Introduction
Tesco is a leading company in the retail industry and its main products entail consumer goods, groceries, telecoms and financial services in United Kingdom established in 1920s. It is one among the largest retailers of British both in terms of global sales and domestic market share. It is the third largest retailer in the world following the Wal-Mart of United State and Carrefour of France. It employs more than two lakhs people and operates 923 stores. The company mainly focuses on providing food products round the world. Additionally, it has slotted its presence of selling electronic items, cloths, insurance services, and financial services, sale of houses and internet services as its new business project (Tesco 2007). I was involved in the procurement department of Tesco’s various departments. Main objective of this department is to make sure that there are sufficient products in the shop in order to meet the necessities of customers visiting at anytime. Significant role of function procurement department is to work as a mediator among the suppliers and process of selling at the stores. The procurement section has to find out whether there is backup stock if there are any possibilities that occur during supply chain. Apart from this, it has to determine the whether there are overstocking of products. It is mainly because of the fact that accumulation of too many products would loss the organization. Hence main operation of this section is to attain customer satisfaction and ensure that they meet the necessities of customers.
Customers and their necessities from the organization
Any organization possesses two types of customers they are domestic customers and outside customers. According to slack et al (2007) domestic customers are the customers who are contained by the organization. According to the customer types there are various departments that operate under their considerations. Such operations comes from the perception of treating organization’s other de partments as separate organizations or entities. enti ties. It can be b e said that the organization has to effectively converse with the domestic customer so as to increase their productivity. Under the procurement section there are some domestic customers where the Tesco has to take care of entail supply section, accounting section, financial section and personnel section. These domestic customers are examined as below: In Tesco Marking can be considered as significant department as it belongs to domestic customers. These departments main objective is to promote the products as well as augment
the Tesco’s sales. Fundamentally, they are believed to draw the attention of the customers who come up with various approaches helping them to visit the store again and again. In any organization the marketing department is expected to output following four things:
Checking the products is not below the optimum level as these services or products are adequate to meet the demands of customers.
Availability of products in the stores so that the customers need to wait for longer duration and access them
Various products available in stores must be in good condition i.e. with reasonable quality
Products must be displayed in an attractive manner so that the customers automatically pickup them.
If all these requirements are met by the operations department of Tesco then the sellers can manage both promotion and delivery of the products. According to Ruffian et al (200), it is critical for the sellers to advertise the products the company delivers or else their operations are considered to be unsuccessful. Other is personnel section with respect to the output. This section mainly manages the human resources in order to make sure that all the organization’s employees function effectively. Therefore this will result in achieving the objectives and goals of an organization. The personnel section looks forward that the result is adequate in terms of both quantity and quality. Main aim of this section is to make sure that each and everybody performs well and this also pertains to the output department. The output section which depends on other departments is the accounting or finance section. This section Tesco helps to manage all the inflows and outflows of cash. Production department is one among the significant finance generators in Tesco. The finance department helps to attain a direct proportionality among the input and output so that the production process falls in the expectations of accounting. At the same time the products must come under the return on investment and no ambiguities in product or else it may cause unexplainable failure of organization’s capital (Tesco, 2007). Apart from the domestic customers Tesco has to consider the outside customers i.e. the customers who directly visit the store to buy goods or products from Tesco. The outside customer also includes who employ online services to order the products or engage a deal with Tesco to deliver the products personally (Upendra, 2009). According to Ruffain et al (2000) these customers mainly expect to discover the product in the stores that they require
promptly and also they expect various products in the store. From this it can be said that Tesco requires offering various branded products with good quality to customers so that they can select their required ones. As Tesco provides various groceries it is the duty of production department to take care that groceries are not rotten, poorly packaged, under ripe, squashed or overripe. Also the production department must ensure that there are various sizes as well as maintain quality. From the output section these can be considered as some of the examples that the outside customers expect from the organizations like Tesco.
Slack et al models employed to attain Operation’s Objectives
Following are the performance objectives set by Tesco as per different perceptions of people: customers fall under first category as they are the main people who help to attain revenue to the company. Secondly the suppliers who come under the operations department and these are expected to perform in groups. Third are the employees as they are the people who perform as per the operations and the working environments in the operations departments must consider them as significant. This community can be influenced by the processes of operation department when the goods get disseminated hence affecting the working environment. Finally, the shareholders from the operations department are expected to be effective only when they produce higher return on investments. To a large extent all these groups come under the Tesco’s performance objectives. According to Slack et al (2007) following are the performance objectives. Speed : In operation objectives Tesco finds speed as a significant operation. In this case, speed is considered in terms of time which is determined between the specific item’s request by customer and the time of delivery. It is valuable for the company as the customers attain the required product in expected time. This is significant as it make a good record which makes the customers to visit the store again and again. Quality: In production department this operation objective takes a higher priority compares to other objectives. In fact, quality means the company which confirm the products or services to local or global standards. This factor is significant for Tesco mainly because (Slack et al 2007):
Firstly, when the goods fall under the expectations of customers, hence the company attains the customer satisfaction and will draw their attention to visit their store for the same product. It implies that this factor helps to generate more profits or revenue.
Secondly, the quality is considered as significant objective as it assists the organization to attain success by means of increasing speed, dependability and cost reduction on products. This can be achieved only when the products are of excellent quality and the organization need not waste time on correcting mistakes but can spend time on other production aspects.
Flexibility: For effective operations in an organization this can be considered as another essential performance objective. It means that an organization which has the capability to get accustomed with the external changes that considers different features of the product. Additionally, flexibility can be considered in different forms. It may include amounts of changes to dispensed products that occur when the products are driven to increase or reduction in quantity because of some external reasons. It can be applied that manner which the products are carried out to the customers. It can be different ways such as payment changes or courier/ delivery systems that are employed by the organization. Such changes are generally affected by the advancements in both competitors and technological aspects. It also means the variety of provided services or products. Hence this results in the creation of innovative products with respect to the changing preferences of the customers (Steve, John, & Richard, 2013). To find out the flow of internal factors this performance objective is required. With a flexible operation system an organization can attain fast responses and the functions with more effectiveness. It also improves the organization’s dependability as speed is also improved at a time. Finally it can be said that flexibility influences the time which in turn affects the company’s revenue. Cost : This performance objective mainly depends in other objectives. This is significant when the operation processes are flexible, dependable, speed in time and products with quality will help the company to spend less time and resources to minimize the mistakes. Hence this affects the required amounts of finance and processing costs. As a result cost can be considered among the four performance objective and is best when not considered separately (Slack et al 2007). Operational Strategies The process through which Tesco has used these operational objectives for the performance of organization:
From the above discussion the performance objectives are Speed, Quality, Cost, Dependability and Flexibility. These are here discussed on how they have helped in the performance of organization. Speed: In today's business attracting customers has become an important part, as this is super market there will be more customers and Tesco has various products and they have used this objective for their day to day job by helping their customers at the time of purchasing the products. For this process the organization has kept few attendants to handle and they have trained well. Tesco has also started online service through which customers can buy products online and can also do transactions through internet. This makes easy for customer instead of waiting too long time for search of products from one corner to another and also saves time by not wasting through standing in line for payments.
When considered with internal
customers this performance objective is also with the performance objective. This say that Tesco doesn't known the consequences of using speed at one department will affect the other departments. This show that as soon as the products are made the sales will start so due to this reason it is important to hide mistakes which rise the poor record keeping. This can be easily achieved by installing information network inside the organization and which helps the complete organization in the aspects through which organizational success is made (Slack, N., Chambers. S., and Johnston, R., 2004). Quality: In this aspect Tesco has taken strict decisions through making sure of all the products mainly food related are in top quality. This is main done by the companies effective selection staff of suppliers. Apart from this the company must make sure that the products are not taking long time in their go downs and must check the expiry dates frequently so as to prevent the sale of goods that are substandard. There are few issues which Tesco frequently checks and they are
Companies capability
Organizations Suppliers quality management system
Supply chain management
Considering hygiene conditions at the time of preparing food.
These are the few conditions which if any organization fulfils the Tesco is ready to do business with them and allows their products to be in the store of Tesco. which is clear that
Tesco wants only fresh and good quality products for its organization (Martin K. Starr , 1996). Cost: This is one of the specific and important objective which Tesco wants to incorporate with and this also makes sure that every other objective is spending less for correcting on the issues and more concentrating on the efficiency process. Dependability: Tesco gives an excellent example for its dependability, Tesco offers home delivery to their customers and shows its dependability within the company and this says that Tesco delivers products or consignments to their customers on time. They have also proved dependability in financial services for example provision of insurance. The organization always makes sure that customers doesn't need to wait for more time and if the applicants are not workable then it immediately informs them so that their time doesn't get waste by waiting in line (Johnston, R., and Clarke, G., 2008). Flexibility: By introducing novel services and products every time through incorporating Flexibility performance and all these are done based on the preferences of the customers. For example we can consider an organization who sold Irish Yoghurt this company has started producing and selling this product when they realised that presently everyone are interested and moving towards products that are natural and this Irish Yoghurt is made completely from natural products such as whole milk, natural milk solids and cultures that have taken milk itself. This shows that company is more flexible and concentrates on the customer's needs and interests and moves towards latest trend. Let us consider another example of the Tesco products and the product which this company has introduced in Beer and this was named as Tesco and there are few other products which Tesco has introduced and that is Jam, Bread, milk, biscuits, pizzas etc. Based on this Tesco also makes few changes in the amount of the products that need to be manufactured at certain time in a year. For this Ice Cream is a perfect example, Tesco manufactures Ice Creams and there will be minimal availability in season like winter where as in summer season the availability will be more. This say that Tesco shows flexibility and this also engages in various programs of merging and expansion of its business. This is significant reason why there are various stores or branches are available in UK and also in the areas outside UK. The organization has announced that the company is more flexible and that is the reason why it is available in different locations. The idea behind increasing the stores is globalization and advancements in technologies (Hogan, K, 1998).
Recommendations for the changes that can be implemented and how it can be implemented
Few changes can be made in Tesco by the operations manager which can make a perfect measurement and this must be the first change to be made in Tesco. The main advantage in this will be for the operations management for being flexible and make changes according to that and this also helps in detecting the changes which are important for success. This can be best idea in terms of flexibility for Tesco, this is because for every store the scanning of performance measurement is important. By considering all the significant performance objectives for Tesco the changes can be implemented. According to my view the best performance in which they can makes changes and implement them will be Quality because this is the one which can be changed by the review and requirements of the customers which can also be called as survey through it will be easy to know what customer wants and what kind of quality they are expecting. with this information then the considered products can be reviewed. The next changes which can be made for Tesco is encouraging creativity in employees this is essential because the staff are the only members who can process and also the one those understand the requirements for the organization. This can be done by saying that not only research department and marketing department are responsible for creative ideas every are welcome and every one are important in sharing their ideas with the organization. This gives equal importance to every staff member in organization so that everyone shows interest in expressing their ideas (Ruffian, F et al, 2000). The last recommendation is to be in concentration with the competitors as Tesco has many competitors right round both internationally and nationally. The best competitors of Tes co are Adsa and Wal-mart this change can be a bench mark for Tesco. organization must initially measure the performance management of competitors and then based on the process it must compare its performance management process and next check out what competitors have and how they can doing if they have any drawbacks and based on that Tesco must use that make necessary improvements.
Conclusions
This paper gives information on the operations strategy of Tesco. This organization is a leading company in the retail industry and its main products entail consumer goods, groceries, telecoms and financial services in UK. The procurement section has to find out whether there is backup stock if there are any possibilities that occur during supply chain. Apart from this, it has to determine the whether there are overstocking of products. It is mainly because of the fact that accumulation of too many products would loss the organization. In Tesco Marking can be considered as significant department as it belongs to domestic customers. These departments main objective is to promote the products as well as augment the Tesco’s sales. If all these requirements are met by the operations department of Tesco then the sellers can manage both promotion and delivery of the products. The finance department helps to attain a direct proportionality among the input and output so that the production process falls in the expectations of accounting. There are different models of Slack et al and all these are discussed and complete information is given. The performance objectives are speed, quality, dependability, flexibility and cost and how these are used by Tesco and what kind of changes can be made so as to improve Tesco's performance. Recommendations are also discussed so as to improve the performance in UK market. organization must initially measure the performance management of competitors and then based on the process it must compare its performance management process and next check out what competitors have and how they can doing if they have any drawbacks and based on that Tesco must use that make necessary improvements.
References
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Steve, B., John, B. & Richard, L. (2013), “Strategic Operations Management”, Business & Economics., Routledge Publications.
Tesco (2007), “Our History”, [Available at Internet] URL: www.tescocorporate.co, [Accessed on 20th October 2013].
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