Operation Management in Asda Stores Ltd : Assignment
Added on 2020-01-07
31 Pages4545 Words164 Views
IMPROVING BUSINESS PERFORMANCE
Table of Contents1 Introduction to the company................................................................................................12 Changes to the operational performance.............................................................................13. Critical analysis of the literature on Investment appraisal and select the best method......24 Evaluating the changes and adapting the best one..............................................................35. Critical evaluation of Radical change theory and Continuous Improvement theories.......46 Evaluate the changes and establish whether CI/RC should be used...................................58. Critically evaluate the literature on project risk and identify various risk factors and itsanalysis methods.....................................................................................................................79 Project risk for the chose criteria.........................................................................................810 Final draft..........................................................................................................................9REFERENCES..............................................................................................................................13APPENDIX....................................................................................................................................15Gantt chart............................................................................................................................18Network diagram..................................................................................................................21
1 Introduction to the company, ASDAIn the competitive corporate world, companies are requiring to employ best principles,tactics and strategies for the successful and proficient operational management. Operationmanagement regards to the process of administrating and managing regular business practicesand routine functions for achieving high level of efficiency. It helps businesses to attaincompetitive advantages over the rivalries and run operations successfully without anydifficulties. Asda Stores Ltd is a multinational British retailer that is headquartered in WestYorkshire, England. It offers wide range of grocery and food products to the crowded audiencesall over the world. The core focus of the present assignment is to emphasize upon therequirement and practical approaches of various operational change practices for derivingoperational success and maximizing competitive strength. In such respect, the report will identifyvarious concepts and approaches like radical change practices, continuous improvementtechniques and many others. On the basis of in-depth analysis of various concepts, the mostappropriate project will be selected and project plan will be constructed using MS project. 2 Changes to the operational performanceASDA is one of the leading retail organization of UK where the firm deals in grocery,financial services and general merchandise. The major strength of the cited firm is that theorganization is one of the second largest supermarket in UK. Besides this, the satisfaction levelof the customers of this firm are higher. On contrary to this, there are certain weakness of thestated organization such as having huge profit margin by the organization. Additionally, thestores of this company are comparatively lesser. Besides this, the organization only focuses onselling its own products but it ignores the products of other brands. The aim of the stated firm isto enhance its presence in different market. In order to remain competitive at international level,the stated organization needs to adapt certain strategies and plans. This will assist the firm toattain its goals and motives in an effectual manner. The management needs to enhance its qualityof products so that it can become the number brand at global level. In order to attain this motive,the firm needs to focus on operational strategies. Whereas, operational strategies can beexplained as the way by which the establishments can reach to their goals and objectiveseffectively. With the development of the operational strategies, the organizations need toexamine the current plans so that effectually the new ones can be used (Ahi and Searcy, 2013).2
In context to above, the operation strategy can be improved by focusing on the value andmission of the company. In case of ASDA the operation performance can be enhanced bycentring over the three changes which mentioned beneath.Technological development- Currently ASDA adopts the latest technology internettechnology through which they can able to deliver the products or service through onlinethat leads to gain the market share. The cited organisation should have to adopt NetFramework technology in which they effectively transact among company websites andtheir customers.Improving the quality of the products by investing in efficient transportation system: Atpresent, on an average, ASDA need 8 days in order to carry the vegetables from theagricultural firm to the shop floor, however, in contrast, in the retail industry, 5 days is astandard time. Due to longer transportation duration, the quality of natural products ishampered which gain attention of the firm to focus on such area and create a moreefficient transportation system to satisfy the consumers desires by delivery them freshand excellent quality of goods. The quality of the products can be effectively improvedby creating an efficient transportation system.CRM strategy: It will assist the organization to improve the quality band provide usefulproducts to the customers. Besides this, technological development will assist themanagement to enhance the features of the particular products and services. It leads togain the market shares and enhance the customers base at global level. Additionally, themanagement can implement the CRM this will result in making communicationopportunities with the customers. The major advantage of the same is that the customersservices will get improved. The overall impact of the same will be on the sales andprofitability of the company. The main reason behind this is that they can effectivelymaintain the relationship with customer and satisfy them accordingly. It assist them toknow more about customer perception regard to products or services. The renowned firmwill be able to render the effective products to the customers (Baggen, Correia andVisser, 2012).3. Critical analysis of the literature on Investment appraisal and select the best methodProject management refers to the process of carrying out necessary activities andoperations to achieve the target goals and successive criteria. It is a methodological approach that3
encompasses enormous processes such as initiation, organization, execution, controlling,monitoring & closure as well. Investment appraisal techniques are the best methods to find outthe relative strength & weaknesses of every project available and help to select the best proposal.In the study of ,(Ahi and Searcy, 2013) it has been founded that payback period is themost simpler and often used techniques by the investors to predict that how much time will aproject take to get back or recoup its beginning cost of capital. Investors who are risk averse usethis method to recover their initial investment quickly and in short duration. However, it hasbeen criticized by (Nixon, Harrington and Parker, 2012) in this, it has been stated that thismethod does not consider time value of currency & cash inflows beyond payback period.Investigation suggested that discounted PBP is comparatively more appropriate and suitabletechnique of evaluating various alternatives. In accordance with the views of (Nixon, Harrington and Parker, 2012), accounting rateof return techniques has been suggested which helps to determine the profit percentage on theproject computed by dividing average cash flows divided by the initial investment. Although thismethod helps to compare two projects on the basis of its relative accounting profit, however,using accounting results may give an inaccurate results because it takes into consideration non-cash transactions also. Therefore, (Baggen, Correia and Visser, 2012) advised use of discountedmodels like Net present value and internal rate of return. In the study, it has been explained thatNPV technique uses a rate for discounting periodical cash inflows so as to anticipate the presentvalue of cash flows. As per the method, excess or surplus of discounted cash inflows over thebeginning outlay is called NPV and positive plus maximum value of NPV is always preferred byan investor. Another discounting method is IRR that just determines the rate which indicates nilvalue of NPV at an equal value of present value of cash inflows with the beginning cost ofcapital. Selection of investment appraisal techniques After critically evaluating both the techniques, NPV is considered as the best way forAsda to evaluate commercial & economic feasibility because it considers time value of currencyplus identifies net return after risk adjustments.Project appraisal summaryTime Cost Quality Resources Ease ofuse Return oninvestmentRisk Overall4
scoreWeight 1211123Project 11*1 = 12*2 = 41*3 = 3232*2 = 43*3 =926Project 21*2 = 22*1 = 21*2 = 2121*2 = 2 2*3 = 617Project 31*3 = 32*3 = 61*1 = 1 313 *2 = 6 1*3 = 323As per the results, it seems clear that project 1 has greatest score; therefore, it has beenselected for the proposed change that has been chosen for the practical implementation. ProjectNet present value methodDecisionQuality improvementNoNot ApprovedTechnologicaldevelopmentYesApprovedImplementation of CRMNoNot Approved4 Evaluating the changes and adapting the best oneIn above context, the major changes have been discussed for improving the performanceof the stated organization. In order to enhance the company operations, if the managementfocuses on technological development then it will incur huge cost and expenses. Still if themanagement adapts then there is no surety that the customers will adapt the products.Technological changes will results in huge cost which will be compensated by the customers.The outcome of the same will be on the purchasing capacity of the customers (Hope and Fraser,2013).Currently ASDA adopts the latest technology internet technology through which they canable to deliver the products or service through online that leads to gain the market share. Thecited organisation should have to adopt Net Framework technology in which they effectivelytransact among company websites and their customers.Additionally, if the management of ASDA focuses on implementing the CRM strategythen it will again increase the cost of the company. The employees will be required to gettraining in order to gain good understanding of the CRM software. Besides this, the another con5
of this element is that there is no security of the loss of records or data. As a result, the citedestablishment should focus on maximizing its competitive strength through the This can be done by tracing the mistakes and analysing the whole process. It will assist theorganization to get to know the pros and cons of the stated method (Hope and Fraser, 2013).5. Critical evaluation of Radical change theory and Continuous Improvement theoriesAs per the study of (Nixon, Harrington and Parker, 2012) in the digitalized andtechnological age, entrepreneurs are require to implement changes in their information resourcesas well as staff behaviour. Radical change (RC) theory helps entities to investigate both theseelements through the concept of connectivity, interactivity & access. The concept is reallyimportant for the Asda and other project planners to examine and analyse the key characteristicsof digitalised society. In such respect, connectivity describes the changing practices, perspectivesand association in the real corporate world. However, interactivity explains the dynamic,emotional, non-linear & physical behaviour whilst access helps to breakdown informationbarriers. However, in contrast to this, (Baggen, Correia and Visser, 2012) ContinuousImprovement process (CIP) is described as a continuously process that aims at adopting the bestpractices and approaches for improving the quality of products, services & regular operationalprocesses. There are multiple of techniques available for bringing improvements in theoperational system such as Six Sigma, Total Quality Management, Pareto technique, PDCAcycle, Lean, Kaizen, Fishbone & many others. Out of these, TQM is considered as the mostappropriate way of quality improvement because, in this, every personnel bring their best effortsand dedications in overall operations so as to maximize performance. 6
As per the study of (Hope and Fraser, 2013) in the competitive world, only thoseorganizations can survive in the market that offer best quality products and/or services to theconsumers. Therefore, it seems important for the companies like Asda and others to employ bestpractices of CPI to identify the reasons behind ineffective quality and thereby make suitablepolicies and decisions for streamlining the processes at minimal wastage. Likewise, (Baggen,Correia and Visser, 2012). suggested that CPI techniques helps to maximize the goods qualityand results in high competitive strengths to ensure stable and successful business. Looking to both the practices, it is founded that out of RC & CI, Asda must use CItechniques because through using enormous models like PDCA, TQM & others, it can getsubstantial benefits at high product quality and maximize consumer satisfaction level. This inturn, it will be significantly able to increase audience’s traffic, result in maximum turnover,profitability & market share as well.6 Evaluate the changes and establish whether CI/RC should be usedThe management of ASDA is focusing on improving the quality of products in order togain the satisfaction level of the customers. The motive of the sited firm is to increase the marketshares and customer base. Although, it can be done by enhancing the quality of the services and7
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