Operation Management- Assignment

Operation
Management
Independent Grocers of Australia
Tushar Mokani (S276871)

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Executive Summary
In Australia, IGA has been always the largest supermarket chain and ranked third.
Metcash, which is an Australian company that deals with grocery and food, owns IGA. The
main role of Metcash is to supply products to their customers. The main aim of IGA is to be
independent and successful retailers. In order to achieve the objective, IGA has a close
operating model with their main supplier being Metcash and are required to deliver products
to their customers. The aim of this paper is to analyse the operation system of IGA and later
giving some advice regarding the improvement of IGA’s working efficiency.

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Contents
Executive Summary...................................................................................................................2
Introduction................................................................................................................................4
Changing Technologies..............................................................................................................4
Continued Globalization of markets including 1st and 2nd world entrants..............................5
Changing job designs ...............................................................................................................6
Changing customer expectations ...............................................................................................6
Quality management..................................................................................................................7
Global manufacturing................................................................................................................8
Process Selection, Design and Analysis ...................................................................................9
Goods and Service design.......................................................................................................10
Supply Chain Design ..............................................................................................................14
Conclusion................................................................................................................................18
References................................................................................................................................19
Appendices...............................................................................................................................22

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Introduction
The grocery market of Australia is one of the most organized systems on planet earth.
There are two main competitors in the market namely; West farmers and Woolworths who
are Coles proprietors and they take 80% of shares in the supermarket, 60% of liquor’s retail
and half the petrol’s retail. In addition, groceries and supermarkets of Australia face stiff
competition (Ramanujan College of Management, 2011). The sales of the company are
predicted to be selling at a rate of 2.2% per year in the coming years in order to reach $98.1
billion, which is the market value according to IBIS of 2016. In challenging situations like
hard economic environment, management operation is of vital importance in order to help
reduce cost and increase efficiency (IGA, 2017). Analysing the following challenges and
how they will influence the future of IGA supermarket will identify operation strategies for
IGA. These challenges include:
 Changing Technologies
 Continued Globalization of markets including 1st and 2nd world entrants
 Changing customer expectations
 Changing job designs
 Quality management
 Global manufacturing
Changing technologies
Adoption of new systems of technology will ensure that buyers advance to new ways
of buying items such as using of online systems to buy goods and then free or paid home
delivery will be done by the IGA chain of supermarkets (IGA News, 2013). These

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customers will also get to enjoy fresh foods. Some of the ways that this concept will affect
the operations in IGA supermarket include the following:
Provision of fresh local foods will become the main objective in the supermarkets
 Consumers will look at the back to basics method of buying goods especially fresh
groceries.
 Provision of locally grown and produced foods in Australia will also help improve the
supermarkets.
 A tenth of the Australian community have the feeling that local foods are important
hence want to purchase them more frequently.
 Redefining of the Australian community.
 The local centers will come up as new villages of selling greens and items.
 It will be essential to maintain the local connection of the people.
Continued Globalization of markets including 1st and 2nd world entrants
Globalization is commonly how different businesses connect all around the world.
Stiff Competition in the markets
This relates to the price and cost of the products, the markets targeted, quick
adaptation to new technologies, faster production of goods and many other factors. The IGA
supermarket should incur fewer costs and improve its sales to have large shares in the market
(Bayraktar, 1994). Different customers have different tastes and thus different choices this
makes their purchasing behaviors quite different. They will always need high quality
products with affordable prices. The supermarkets must meet all this needs or the sales will
go down leading to low profits or huge losses (Anand Nair, 2015). Hence, IGA must
always be ready to meet the preferences of the customers to survive in the stiff competition.

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Technology exchanges
Globalization is all about advancement into the global market and hence need to adopt
new methods of technology that can easily venture into the global market. The Internet and
electronic commerce are some the major factors that should be considered in the IGA
supermarket to ensure expansion into the international markets. Technology is actually one of
the basic tools that will help thrive in a competition in the global market. Latest
advancements in technology will help increase sales as well as the quality of the products.
Globalization has led to intense technology transfer and improvements. Most of the
customers expect the best quality of services. Those stores that have invested a lot of capital
in the businesses are at a greater risk and need to advance their technologies. These stores
will need to have the best management of technology.
Changing job designs
The design of jobs refers to the plans in a business system that will aim at reducing
any dissatisfactions of the employees or minimize alienation of employees due to repetitive
or intricacy during jobs. This process of designing jobs will involve providing of rewards to
employees and this will help IGA improve the levels of production as well as achieve
employee satisfaction (Delloite, 2017). Some of the techniques used in job designs will
include the following; enlargement of the job functions, enrichment of the employees,
simplifying the jobs and many other techniques.
Changing customer expectations