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Operations management

Introduction

Operation management is the practice of creating highest level of efficacy possible within the organisation where the leader is concerned with converting the material and labour into final goods and services through adopting a cost effective and efficient way to maximise profitability and sales volume of the firm (Hart et al., 2020). The study helps to evaluate the models and strategies of operation management where the business firms try to expand their activities and run their operational functions strategically. Through this study, it is possible to evaluate the Transformation model, operation’s performance as well as the process design and layout and flow which are mandatory in today’s business firms to run their operations in a systematic way. The company Sainsbury’s strategy will be evaluated to identify and analyse the operation management tactics of the firm in order to fulfil the aim and objectives of Sainsbury’s. The company Sainsbury’s is the second largest chain of supermarket in the UK with 16% share in the retail market of the country, the organisation is successful to stabilise their financial position in the market and grab the customers base by delivering high quality hypermarket, super market, discount and convenient shop products as well as efficient services to all the customers. Total employees in the firm are about 116400 and the company is also efficient to expand their business across the UK and the revenue in the last year was £29.007 billion. The leader of the company is also efficient to manage their operational activities and it is mandatory for the management team to analyse the operational process in order to manage their activities and achieve the objective of maximising organisational profitability by strengthening the customers base, where the firm aims at delivering the highest quality products at affordable price to the customers (Sainsbury’s, 2020a).

Transformation model

The transformation model is effective to understand the ways of transforming the input, machineries, and raw materials and labour into the final output, where the firms are able to deliver high quality organisational products and services to the ultimate customers (Hart et al., 2020). In order to manage strong consumer base and maximise the satisfaction among the customers, it is mandatory to develop operational tactics through which the brand can fulfil, their objectives, transformational model is good where the major inputs of the firm are the raw materials, labour, capital, equipment, land, buildings, materials and information and on the other hand the output of the firm are the goods and services which added the values to the customers. As per the model of transformation, the business environment is mandatory to be analysed and in this regard the factors such as customers, regulations, suppliers, competitors, economy and technology are the major factors which have crucial impacts on the business operations. For example, the external environment in the UK such as political stability, economic growth, moderate inflation rate as well as social development with highest literature rate are the contributing factors for the company Sainsbury’s, where the firm is able to expand the business successfully. The government of the UK is also cooperative and provide suitable environment with technological advancement and legal framework to run the business sustainably.

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Accordingly, the customer’s base is also another major factor where the company can target the right and potential buyers in the market and in this regard, the customers demand for the grocery products and convenient shop products is increasing over the period of time and it further influence the company to restructure their business and grab the market share successfully. Strong supply chain and distribution network across the UK further provide a scope to the company to run their operations and grab the market opportunity in long run (Teller et al., 2018). Technological advancement is another major factor which boosts the performance efficiency of the firm and it has direct impacts on the company’s operations. The latest technology such as CRM and ERP are the major contributing factors to run the business sustainably by managing their operations. The integrated computer system and software are beneficial for the brands like Sainsbury’s to manage their operations and run their operations successfully.

As per the transformational model, the inputs of the organisation are such as capital, raw materials, equipments, facilities, time and knowledge, labour and suppliers. It is mandatory for the organisational leader to invest adequate capital for the business activities. After that, the raw materials and strengthening the supply chain for supplying the raw materials and other necessary equipments are also mandatory (Ying et al., 2020). In this regard, for example there is strong supply chain of Sainsbury’s where the company is able to control their stock of the raw materials and manage the equipment related to the production and manufacturing of the products in the company. The labour forces and the knowledge are also the major input in the company, where the efficacy of the employees and the knowledge further help to produce the high quality products and retain the customers for their products and services. Sainsbury’s is also successful to manage their strong employee base and retain them by creating values for the staff and satisfying them by providing high return on investment. The employees are efficient to maximise performance and productivity of the firm and provide high quality goods and services to the customers to meet the expectations of the customers (Sainsbury’s, 2020a).

Apart from that, the transformation system is crucial where the transportation, storage and inspection are mandatory for the company to manage their operations. In this regard, monitoring and control as well as the technological creativity in the workplace support the operational activities of the business firm. For example, Sainsbury’s is also able to manage their transportation system and storage through the manual handling as well as the computerised system handling, the ERP or enterprise resource planning system and software is good for the organisation to maintain the stick of the products as well as manage the warehouse successfully through continuous monitoring and control. On the other hand, the inspection, storage capability management, restock of the goods at the physical store of Sainsbury’s is managed well through transportation system (Majukwa and Haddud, 2016). The distribution channel in this regard is also playing a crucial role for distributing the final goods to the customers safely which also helps the firm to improve brand image and run their business efficiently in the market across the UK. This transformational model is hereby effective fir facilitating the business growth and achieves the ultimate output of the system. The firm is able to provide high quality final output including all the necessities of the customers, convenient shop goods and efficient services so that it would be possible for the business to satisfy the customers and manage their operations successfully (Sainsbury’s, 2020b).

Operation’s performance

The operational performance must be managed well and it should be monitored through continuous inspection and control system (Majukwa and Haddud, 2016). The organisation Sainsbury’s is a good retail firm, which is reputed for the quality good and efficient services for the customers where the brand is also trying to deliver the goods at affordable price so that it would be able to satisfy the consumers and strengthen their customer base in long run. The firm’s performance can be measured through the cycle time, productivity, waste management activities, reduction of greenhouse gas emission and regulatory compliance. In this regard, for example, Sainsbury’s tries to manage their operational performance by maintaining their production units and minimising the waste from production and distribution of the goods. The company tries to manage their values where the values are such as,

  • Respect and integrity
  • Delivery of good quality products and services
  • Setting affordable price for their goods
  • Creating values for the colleagues and suppliers
  • Maximising customer satisfaction
  • Managing stakeholders values through providing high return on investment
  • Managing corporate social responsibility

These are the major values, where the firm Sainsbury’s focuses on fulfilling its vision of grabbing the market opportunities and gaining the high competitive advantage for the benefits of the firm (Sainsbury’s, 2020c). The major key performance indicators or KPIs of Sainsbury’s are such as,

  • Employee’s satisfaction
  • Consumer satisfaction
  • Employee performance and productivity
  • Teamwork and colleague engagement
  • Community investment
  • Reduction of greenhouse gas emission
  • Profitability and retail sales growth
  • Cost saving and high economies of scale

The above mention factors are the key performance indicators, through which the company evaluate their growth and operational excellence over the period of time (Teller et al., 2018). The earnings per share of the company as well as the profit before taxation are growing rapidly which are considered as a positive indicator of business growth and operational excellence. Additionally, the dividend per share and retail cash flows are also increasing over the period of time which further boosts the capital asset as well as the profitability of the firm. The company is also successful to maximise their profitability and increase sales volume and it is also another indicator of business growth where Sainsbury’s becomes successful to manage their operations and gain market share over the period of time (Sainsbury’s, 2020c).

Process design and layout and flow

It is mandatory for the organisation to develop design to run the internal process and manage the operational functions in a systematic ways (Ivanov, Tsipoulanidis and Schönberger, 2017). The layout and flow in the store of the company are also necessary to be designed efficiently, where it would be possible for the business to manage the operational process and create a systematic approach for further expansion of the business.

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As per the process design, it is necessary to create planning about the required input and the output of the company (Ivanov, Tsipoulanidis and Schönberger, 2017). After that, the whole process is designed which is related to creating supply chain network, layout and flow of the goods and services, managing people, jobs and organisational internal process, designing the product category and implementing the technology in order to produce the high quality products and services successfully. This process design provides a scope to Sainsbury’s to manage their operations and handle the internal process in a systematic way. The internal system of handling the individuals as well as the technological advancement through implementing the latest Information Technology, ERP system and database management system are effective for the firm to manage their operations and create values for the customers as well as other stakeholders.

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The layout of the store and internal flow are also necessary to be deigned efficiently as it provides a systematic approach to manage the organisational operations efficiently (Panigrahi et al., 2018). Sainsbury’s also handle their store through managing their internal stakeholders such as suppliers, employees, managers and other staff, who are efficient to manage different layout of the store as per the diverse product ranges such as health and beauty, grocery, automotive, sport goods, home electronics and decorations, stationary and clothing. This is a synchronised way, through which the brand can expand their business as well as manage their operations in a systematic manner.

Conclusion

It can be concluded that, operation management is effective for the organisations, which provides a systematic ways to manage their operations to transform the inputs into ultimate output so that the brand can satisfy the customers by delivering high quality products and services at affordable price. The organisation Sainsbury’s is also one of the successful retail business, which focuses on transformational model and operational principle to create values for the stakeholders and manage their operations successfully for distributing their final goods and services in the market as per the market demand and customers’ needs. The operational activities and principles further boost the performance of the company, where Sainsbury’s is able to maximise their profitability and sales volume by strengthening their consumer base through managing their operations efficiently, handling he production process, adopting the latest technology for the business to manage manufacturing the goods and handling the stakeholders through the integrated computerised system, which ensure excellence operational system at Sainsbury’s.

Reference List

Hart, M., Austin, W., Acha, S., Le Brun, N., Markides, C.N. and Shah, N., 2020. A roadmap investment strategy to reduce carbon intensive refrigerants in the food retail industry. Journal of Cleaner Production, 275, p.123039.

Ivanov, D., Tsipoulanidis, A. and Schönberger, J., 2017. Global supply chain and operations management. A decision-oriented introduction to the creation of value, 2.

Majukwa, D. and Haddud, A., 2016. Operations management impact on achieving strategic fit: A case from the retail sector in Zimbabwe. Cogent Business & Management, 3(1), p.1189478.

Panigrahi, S.K., Kar, F.W., Fen, T.A., Hoe, L.K. and Wong, M., 2018. A strategic initiative for successful reverse logistics management in retail industry. Global Business Review, 19(3_suppl), pp.S151-S175.

Sainsbury’s, 2020a. Our purpose. [online] Available at: https://www.about.sainsburys.co.uk/about-us/our-purpose [Accessed on 8 October 2020].

Sainsbury’s, 2020b. Our business strategy. [online] Available at: https://www.about.sainsburys.co.uk/about-us/our-business-strategy [Accessed on 8 October 2020].

Sainsbury’s, 2020c. Our KPIs. [online] Available at: https://www.about.sainsburys.co.uk/~/media/Files/S/Sainsburys/documents/reports-and-presentations/2019/ar-docs/sainsburys-ar2019-financialkpis.pdf [Accessed on 8 October 2020].

Teller, C., Holweg, C., Reiner, G. and Kotzab, H., 2018. Retail store operations and food waste. Journal of Cleaner Production, 185, pp.981-997.

Ying, S., Sindakis, S., Aggarwal, S., Chen, C. and Su, J., 2020. Managing big data in the retail industry of Singapore: Examining the impact on customer satisfaction and organizational performance. European Management Journal.


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