BOOHOO Case Study: Capacity Management, Quality & HR Dynamics

This report provides a detailed analysis of capacity and quality management practices at BOOHOO, a UK-based online fashion retailer. It covers key aspects of capacity management, including its definition, objectives (cost reduction, revenue increase, capital improvement, quality enhancement, speed, dependability, and flexibility), and strategies for matching demand and supply (level capacity, chase demand, and change demand). The report also discusses demand forecasting methods used by BOOHOO and outlines the five steps of capacity planning and control. Furthermore, it explores quality management theories, dimensions of quality, quality costs (appraisal, prevention, internal failure, and external failure), and the Sandcone model. The report concludes with an examination of the interaction between operational and human resources managers at BOOHOO, providing specific examples such as developing training programs and discussing organizational culture.

ASSIGNMENT QUESTION

Table of Contents.
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Topic 1: Capacity Management.......................................................................................................3
Definition and objective of capacity management.......................................................................3
Matching demand and Supply.....................................................................................................4
Five step of capacity Planning and control..................................................................................5
Topic 2: Quality Management.........................................................................................................6
Quality Management Theory.......................................................................................................6
Quality Costs................................................................................................................................7
Sandcone Model...........................................................................................................................8
TASK 2............................................................................................................................................9
Interaction of operational manager with human resources manager of BOOHOO with two
Example.......................................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES................................................................................................................................1

INTRODUCTION
Capacity Management (CM) refers to the act of ensuring and measuring maximum
production and sell capacity of the organization. On the other hand, Quality management (QM)
is the act of manage all the tasks and activities required by the company to maintain its desired
level of excellence. Both the capacity and quality management within the organization plays vital
role in the success of business. Thus, the two topic selected for the task one of present report is
capacity management and quality management. Further, the report will be based on UK based on
fashion retailer organization name BOOHOO. BOOHOO is a British Online retailer organization
having headquarter in Manchester, UK (Mohseni, Brent and Burmester, 2019). It is one of
leading fashion retailer organization in the world that fashion clothing’s of age group 16 to 30
years’ products to its local as well as international customer. The report will discuss the capacity
management and quality management of BOOHOO in detail with various examples implications.
While discussing quality management and capacity management of BOOHOO, the report
will also apply theories or framework. The report will discuss the meaning of capacity, objective
of capacity management, method of adjusting capacity, types of capacity planning etc. In
addition, the methods of forecasting demand and types of votality forecasting will also be cover
in the report. For quality management topic, the report will discuss the quality characteristics,
quality cost, sandcone model etc. Further, in the second task, the report will discuss the
interaction of operational manager of BOOHOO with the human resources' manager. In order to
discuss the same, the report will also include the two specific example such as developing a
training and development courses content and discussing organization culture with HR.
TASK 1
Topic 1: Capacity Management
Definition and objective of capacity management
Definition of capacity: Capacity means the maximum about of resources that business can
contain, produce and sell within a specific span of time.
Objectives of Capacity or Capacity management
The various objectives of capacity management are as follows:

 Cost: The capacity management helps in reducing the cost of production of the company.
For example, BOOHOO with the help of capacity management reduces its cost of
production in order to lower their customer-facing prices.
 Revenue: Another objective of capacity management is to increase the sales of business.
For example, BOOHOO revenue in the year 2021 is 1.234 billion in 2021 which is 15%
higher than the revenue of 2020 is because of its capacity management process.
 Capital: It is also beneficial for improving capital of business such as BOOHOO uses
CM to enhance its capital (Akrami, Doostizadeh and Aminifar, 2019).
 Quality: Improving the quality of business products is also objective of CM. For
example, BOOHOO products such as women apparel is of high quality.
 Speed: The objective of CM also involve high speed. It means BOOHOO able to produce
or sell more goods in a year than its closet competitor Sainsbury because of its CM
implementation.
 Dependability: The dependability of customer over organization get increased if they
apply CM within business. For example, the customer of BOOHOO are highly
dependable on them for high quality products at reasonable price (Dissanayake and
Cross, 2018).
 Flexibility: The capacity management also help the organization to change its operation
and products based on customer requirement. For example, BOOHOO have variety of
cloth products for the age group of 16 to 30 years.
For example, BOOHOO uses subcontracting way to manage its high capacity utilization
because in this the company take orders for other business as well. The impact of which
BOOHOO able to maximize its capacity utilization and profit.
Matching demand and Supply
Level Capacity Strategy: The level capacity means the strategy to maintain the stable
workforces level and output rates over the planning horizons. For example, BOOHOO maintain
its level capacity of 80% and produces the goods at 80% constant output rates.
Chase Demand strategy: As per this strategy, the company can change the level of its
output according to the demand. For example, BOOHOO uses this strategy of capacity

management in which they change its level of output from year to year based on demand in the
market.
Change Demand strategy: This is a strategy which state that company should change its
products based on the change in the demand and market trends (Oey, Wijaya and
Hansopaheluwakan, 2020). For example, BOOHOO in order to maintain its customer base
changes its clothing products based on new market trends and customer demand.
Demand Forecasting of BOOHOO
Demand forecasting is a systematic process with the help of which the company can
estimate its future demand of products. For example, BOOHOO uses Trend projection method
to estimate and forecast its future demand. In this, the company make assumption that the factors
which are liable for past trends are continued to play role in future as well. However, Covid-19
has affected the demand of BOOHOO to great extent but because of its online delivery service
the company able to handle its demand (Walley and Adams, 2019).
Five step of capacity Planning and control
 Forecast demand: This is the first step in which the company need to forecast its future
demand. For example, BOOHOO uses trend projection method to forecast its future
demand.
 Measure capacity: The second step involve measuring the level of capacity of
organization to produce and sell products. For example, the average production of
BOOHOO clothing product is 12000 per week, then its total production capacity would
be 12000 per week (Jacquillat and Odoni, 2018).
 Manage demand side: This step indicates the ways the company can adopt in order to
manage its demand side in order to plan and control its capacity. For example, BOOHOO
assess current market situation on a weekly basis to identify and manage the demand of
consumers (Noor and et.al., 2018).
 Manage supply side: This involves the step company take in order to manage the supply
of its products. For example, BOOHOO increases it production of products in order
provide supply of products in peak and high demand.

 Understand the consequences of different capacity management system: This step
indicates that the company should understand the consequences of capacity management
system they are adopting.
Example: BOOHOO, adopted following solution to increase its capacity if the demand increases
unexpectedly:
 They maintain transparent and pro-active relationship with its supplier.
 They also reduce the lead time.
 BOOHOO update its inventory policy such as Just in time to increase its production
capacity.
 Lastly, they align and balance its supply and demand management simultaneously to
quickly adjust to the new reality (Cai, Song and Wei, 2021).
Topic 2: Quality Management
Quality Management Theory
Definition of quality: Quality is the feature and characteristics of products and services that bear
on its ability and satisfy customer needs.
For example, BOOHOO has won the Irish quality food fashion retailer of the year 2018
award for its high quality cloths products.
Dimension of Quality with example:
 Performance: This involves the characteristics of a product and service. For example,
the characteristics of BOOHOO product is such that they meet the basic need of
customers.
 Reliability: This dimension indicate the likelihood that a product will not fail within a
specific time period.
 Durability: It measures the length of products life. For example, the toys products of
BOOHOO has the lifetime durability. But the food product of BOOHOO has only small
period durability.
 Features: This is the additional characteristics of products that enhance the appeal of
company products and services.
Importance of Quality to BOOHOO:

 Cost reduction: The quality reduces the cost of production as it work best in enhancing
the efficiency of BOOHOO employee and reducing the wastage of resources. Increased revenue: The revenue of BOOHOO easily get increases because of its quality
management policies such as six-sigma, Sandcone model etc.
Example, For BOOHOO quality plays vital role in there business success after the failure
of quality of its cloth products in the start of its business (Gupta, 2021)
Tools of Quality Management in BOOHOO:
The tools of quality management uses by BOOHOO within there organization are as follows:
 Fishbone Diagram: This is a tool which indicate the cause and effect relationship of
every problem. For example, BOOHOO uses this tool to identify it's each problem causes
and result (Sawan, Low and Schiffauerova, 2018). It is one of the best tool for problem-
solving purpose.
 Scattered Diagram: This is a tool which is used to find out the relationship between A
and B. For example, BOOHOO with the use of this tool identifies all the possible causes
that arises the quality i.e., main issue in the organization. After identifying possible
causes, the management of BOOHOO adopt possible causes to solve the same.
Quality Costs
Four type of quality cost as per PAF model:
 Appraisal cost: This cost is related to organization which they incur while measurement
and inspection of activities during operation in order to determine conformance to quality
requirement. For example, BOOHOO appraisal cost is quality inspection cost and test
equipment cost.
 Prevention cost: This is a cost which is incurred by organization before operation to
prevent bad quality products and services. For example, BOOHOO incur quality planning
and supplier survey cost along with training to employee cost.
 Internal failure cost: It is incurred by organization before the delivery of products and
services for remedy defects discovered. For example, internal failure cost incur by
BOOHOO involve scrap, rework and material downgrades.

 External failure cost: It is an expense incurred by company due to remedy defect
discovered by customers after they receive products and services. For example, external
failure cost return incur by BOOHOO is customer return and products recalls (Eraslan
and Servet, 2021).
Example, BOOHOO uses training and development method to reduce the cost of
quality. It is because it helps in improving employee efficiency and reducing wastage of resource
and operational errors. It is because this is one of the best method to reduce the quality cost of
products.
Sandcone Model
This model reflects that how company such as BOOHOO should extend lower layer of
model in order to support any increase in higher layer. The five layer of Sandcone model
includes: Cost: This is the first layer which state that BOOHOO in order to reduce or support the
increase in cost of its products and services should increase its employee efficiency. Flexibility: This state the trade off between flexibility and quality of workers of
organization. For example, BOOHOO in order to increase its worker flexibility provides
training and fun session (Jesic and Eley, 2018). Speed: Further, BOOHOO in order to increase its workers working speed provide
training as well as conduct fun session at the workplace. Dependability: In order to increase dependability of customer over its product,
BOOHOO company provides various discounts and offers to its customer (Nardo, Forino
and Murino, 2020). As the dependability priority developed, BOOHOO extend is speed
priority within business.
 Quality: In order to enhance the quality of its products, BOOHOO invest in their
employees, machinery, listen to their customer and also perform product testing.
Example, BOOHOO uses MasterControl's digital quality management system software
within there organization in order to automate and improve quality of its product throughout the
entire product life cycle.

TASK 2
Interaction of operational manager with human resources manager of BOOHOO with two
Example
Generally, operational manager and human resources manager are of quite separate fields
but yet they have to communicate and interact with each other in order to solve various issues
such as administrative issues regarding payroll etc. The role of operational manager of company
is such that they need to look out the day-to-day operational activities at every level of the
organization. While on the other hand, the role of human resources manager involve recruitment,
selection, on boarding, training and development, developing strategies to retain employees,
developing policies for positive workplace environment, providing rewards and recognition etc.
Both manager have their own role and responsibilities, but when it comes to develop positive
organization culture at the workplace, they have to interact and communicate with each other.
The two example where OM of BOOHOO interact with HR manager are as follows:
Developing a training and development course content: In BOOHOO, the HR
manager first communicates with the operational manager before creating training and
development course content. It means HR manager of BOOHOO can't create content of training
and development program without knowing what exactly employee need to learn and what are
the weakest area of employee which need to be improved with training. That's why operational
manager of BOOHOO communicate with the HR manager about the areas where the operational
team and employees are lacking (Wolniak, 2019). It is because operational manager know about
each employee strongest and weakest area and also know the content which need to be covered
in training session. That's why in order to develop a training and development course content the
OM and HR manager of BOOHOO need communicate with each other. The result of which
correct information and content is provided to employee which result into the growth of
business.
Discuss organization culture with HR: Another example where BOOHOO OM interact
and communicate with the HR is to discuss the organization culture. The organization culture
state the proper way to behave within the organization in order to keep positive business
environment. The OM of BOOHOO ask about the culture of organization with the HR manager

such as BOOHOO to follow hierarchy culture within the organization which state that each
employee must have one supervisor who guide them and to whom employee need to report
(Rolland, Mathiassen and Rai, 2018). Thus, in order to develop a positive organization culture
where each employee talks with other people in positive way, respect other culture, beliefs etc.
the operational manager need to interact with the human resources manager of company.
CONCLUSION
After summing up the above information, it has concluded that the both quality
management and capacity management plays vital role towards the success of BOOHOO. The
report has concluded both the topic with the use of mix of theories and framework. The report
has concluded the Sandcone model of quality management and how BOOHOO company uses
quality management software to improve its quality management. The report has also concluded
the five step of capacity planning and controlling. Further, the report has also state the four type
of quality cost as per PFA model and how BOOHOO company reduces or managers its quality
cost. Lastly, the report has also concluded the interaction between the OM and HR manager of
BOOHOO using the two specific example such as discuss organization culture and developing a
training and development course content.

REFERENCES
Books and journals
Mohseni, S., Brent, A. C. and Burmester, D., 2019. A demand response-centred approach to the
long-term equipment capacity planning of grid-independent micro-grids optimized by
the moth-flame optimization algorithm. Energy Conversion and Management. 200.
p.112105.
Akrami, A., Doostizadeh, M. and Aminifar, F., 2019. Power system flexibility: an overview of
emergence to evolution. Journal of Modern Power Systems and Clean Energy. 7(5).
pp.987-1007.
Dissanayake, C. K. and Cross, J. A., 2018. Systematic mechanism for identifying the relative
impact of supply chain performance areas on the overall supply chain performance
using SCOR model and SEM. International Journal of Production Economics. 201.
pp.102-115.
Oey, E., Wijaya, W. A. and Hansopaheluwakan, S., 2020. Forecasting and aggregate planning
application–a case study of a small enterprise in Indonesia. International Journal of
Process Management and Benchmarking. 10(1). pp.1-21.
Walley, P. and Adams, M., 2019. Demand and capacity management practices in austerity: A
study across UK police forces. In Euroma 2019 Conference Proceedings.
Jacquillat, A. and Odoni, A. R., 2018. A roadmap toward airport demand and capacity
management. Transportation Research Part A: Policy and Practice. 114. pp.168-185.
Noor, S. and et.al., 2018. Energy demand side management within micro-grid networks
enhanced by blockchain. Applied energy. 228. pp.1385-1398.
Cai, W., Song, Y. and Wei, Z., 2021. Multimodal data guided spatial feature fusion and
grouping strategy for E-commerce commodity demand forecasting. Mobile Information
Systems. 2021.
BETSHASENAI, B., 2021. QUALITY IMPROVEMENT USING SPC TOOLS IN MOBILE
PHONE ASSEMBLY INDUSTRY IN CASE OF TRANSSION MANUFACTURING
PLC (Doctoral dissertation, ST. MARY’S UNIVERSITY).
Gupta, B. C., 2021. Statistical Quality Control: Using MINITAB, R, JMP and Python. John
Wiley & Sons.
1

Sawan, R., Low, J. F. and Schiffauerova, A., 2018. Quality cost of material procurement in
construction projects. Engineering, construction and architectural management.
Eraslan, S. and Servet, Ö. N. A. L., Quality Costs And Application In A Manufacturing
Enterprise. OPUS Uluslararası Toplum Araştırmaları Dergisi. 17(35). pp.1-1.
Jesic, L. and Eley, M., 2018. The Sand Cone Model: Cost Saving or Not.
Nardo, M., Forino, D. and Murino, T., 2020. The evolution of man–machine interaction: The
role of human in Industry 4.0 paradigm. Production & manufacturing research. 8(1).
pp.20-34.
Wolniak, R., 2019. Operation manager and its role in the enterprise. Production Engineering
Archives. 24.
Rolland, K. H., Mathiassen, L. and Rai, A., 2018. Managing digital platforms in user
organizations: The interactions between digital options and digital debt. Information
Systems Research. 29(2). pp.419-443.
2