Challenges and Performance Objectives in Operations Management at Tesco
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This report discusses the challenges faced by Tesco in operations management and the performance objectives of the company. It covers topics such as the 4V model, production processes, and continuous improvement frameworks.
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BUSINESS OPERATION MANAGEMENT
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Table of Contents INTRODUCTION...........................................................................................................................3 Overview of your chosen establishment. Either your own place of work or a small business that you are able to visit; and define the scope of your analysis............................................3 Gantt Chart............................................................................................................................3 Mainchallengestheorganizationiscurrentlyfacing?Criticallyanalysetheoperation management challenges that the business is facing. Use established operations management frameworks, such as: the 4V model; OM Performance Objectives.......................................3 Evaluate the key processes used in the production/delivery of a product/service, discussing the pros and cons of these processes in meeting performance objectives....................................6 Identify and prioritise quality improvements you would recommend to the product/service delivery, by using continuous improvement frameworks.....................................................7 CONCLUSION................................................................................................................................8 REFERENCES..............................................................................................................................10
INTRODUCTION Operations managementis the administration ofbusinesspractices to create the highest level of efficiency possible within an organization. It is concerned with converting materials and labor into goods and services as efficiently as possible to maximize the profit of an organization. Tesco trading as Tesco, is a British multinational groceries and general merchandise retailer with headquarters in Welwyn Garden City, Hertfordshire, England, United Kingdom. It is the third- largest retailer in the world measured by gross revenues and ninth-largest retailer in the world measured by revenues.It has shops in seven countries across Asia and Europe, and is the market leader of groceries in the UK (where it has a market share of around 28.4%), Ireland, Hungaryand Thailand.This report covers topics such as scope and analysis of the company, 4 V model, challenges faced by the company and the performance objectives of the company, gantt chart, production process with pros and cons, framework for continuous improvement. Overview of your chosen establishment. Either your own place of work or a small business that you are able to visit; and define the scope of your analysis. Scope of the company depends on the extent of the market in which they are serving. The company has turned out to be the largest retailer in the country and now the company is planning to take their operations in US. They have already established large market base in Asia and Europe. (Wood, Wrigley and Coe, 2016.) Gantt Chart Task NameDurationStartFinishPredecessors project initiation2 daysTue 12/3/19Wed 12/4/19 framingaimand objectives4 daysThu 12/5/19Tue 12/10/191 conductingmeetingto identifyloopfallin operations 5 daysWed 12/11/19Tue 12/17/192 areas of improvement5 daysWed 12/18/19Tue 12/24/192,3 strategy implementation7 daysWed 12/25/19Thu 1/2/204
fund allocation4 daysFri 1/3/20Wed 1/8/205 implementationof changes1 dayThu 1/9/20Thu 1/9/206 end of project1 day?Fri 1/10/20Fri 1/10/207 Mainchallengestheorganizationiscurrentlyfacing?Criticallyanalysetheoperation managementchallengesthatthebusinessisfacing.Useestablishedoperations management frameworks, such as: the 4V model; OM Performance Objectives. Discounted model- This model of the company is eating its profits they are facing difficulty in coming up with a new and innovative ideas. The company is going through a lot of challenges to change this model and recover from the loss of 2 billion Euros that happened in 2014. Existing and established competition- Company is facing challenges because of the competition in the market. To overcome this challenge the Tesco is thinking of coming up with a new concept just like Jack's.
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Challenges of operation management Globalization-This process pertains to process the integration and interaction among people, companies and government of different nations. It is driven because of the reason of reduction in barriers of trade, advancement in transportation, technology etc. managers who handle the operations are not just fighting the companies of their home countries but with the outer countries too. That is the reason why it is necessary to identify the new trends and keep up with it. They also have to focus on increasing the production so that they can have the leverage of competitive advantage over other companies. Sustainability-This is the area of conversation who deals in manufacturing. All of them are engaged in the conversation that whether or not there will be enough resources for a sustainable future. It also includes three factors such as economic, social and environmental. Operation managers of Tesco needs to be sure about the outcome of these factors including the relation of their capacity of production against these factors. To implement practices which will figure out
the solution to these problems related to sustainability techniques of operation management needs to be more effective. Effective Communication-Effectiveness and consistency in communications is difficult to maintain but it is needed to be done so that Tesco can meet up to its challenges. Operation managers face challenges which are related to external and internal stakeholders. They need to engage in communication with them effectively. It will allow the company to make their production facility more transparent. This will aid the factory of the company. If the company forms up a strategy in which everyone works together then the work will be completed easily. Manufacturing facilities want to increase their capacity of production and in order to do that they need to make their communication effective. This will also help the companies to plan and forecast the demand which will ultimately help them to make the plan accordingly. (Reid and Sanders, 2019) Ethical Conduct-Ethics of Tesco helps that the company does not affect or make damages to people or society. If they don't understand and implement it in their culture they will go out of the way and not play safe. Many companies contribute their operations in an unethical manner. Tesco is ethical in all of their functions as it helps them to run their operations smoothly and not be one of those companies who have failed to do this. (Lazarov and Tesco, 2016.) Performance objectives of Tesco-
Objective of Speed-It helps Tesco to measure that how fast they deliver their products and generate sales. This objective is concerned with the time a product takes new research and how much time it takes to develop a product. Quality of a product-It helps the company to measure the changes and specifications for improving the quality. It also tells the company about the reliability, durability and cost of maintenance. This will keep the company focused about the value of the product. Variation in Costs-This objective helps Tesco about the cost of variation in different products and the variety they offer to consumers. Products which are offered in less variety tends to be priced higher than usual and if they are offered in high volume then the price of the product will be low. It affects the price of the product and the overall cost of production so that more profits can be obtained.(Zhao and et.al., 2017) Flexibility in Operations-If the operations link with product line then it will be easy for the company to adjust the requirements which are new. To be able to produce varieties and according to the suitability the company needs to adapt the techniques so that they can meet up with the conditions of the market. (Nguyen and et.al., 2017.) 4 V's model of Tesco- Volume This means how much product quantity will Tesco require in order to satisfy the demand of the market.Ifthecorrectvolumeisnotmaintainedbythecompanythentheremightbe consequences to face. If the volume is less than the demand of the customer will remain unsatisfied and if the volume is more than Tesco have to bear the extra holding cost of the extra volume being held.(Evans and Mason, 2018.) Variety This means the different type of goods being provided by Tesco to their customers. This V mainly include the diversity of the product the company holds. If the company provide wide variety them there customer will be able to find all the goods required under one roof and they will prefer Tesco over their customers. The variety factor will help Tesco to gain competitive advantage of the customer and thus increase there market share in the industry. Variation This refers to the change in the level of demand in the over the period of time. As there are many factors which affects the change in the level of demand it is very unlikely to predict the demand
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of Tesco, therefore the company must remain ready at all the time to face these uncertainties of the market demand. These unpredictable changes may be like a natural disaster, after any natural disaster the demand for the food stuff will increase, so Tesco must be ready to deal with such uncertainties.(Gonen and et.al., 2017.) Visibility This refers to how much the customer experiences the activities of the company. Tesco will generally have low visibility as the customer won't come to their manufacturing units to see how they operate. Visibility is generally high for service industry. The customer will see how the retail stores operate and provide them with their services in case of Tesco. Evaluate the key processes used in the production/delivery of a product/service, discussing the pros and cons of these processes in meeting performance objectives. Mass or Flow production- This method states that production is held on a large scale with continuous production and the products produced are standardized. It is the base of mass production to produce standardize production and it is produced with the help of materials which are standardized. The machines are arranged in such a way that the flow of production is maintained at a continuous level and proper sequence of order is maintained. Most of the companies consider that process layout is the most suitable method for production at pass level. This process is broken into operations which are not combined.(Felgate and Fearne, 2015.) Batch Production- This method of production is used when the company knows the order they have to make in advance. In this form the same products are produced under different batches according to the demand in the market. This method is same as the method of producing jobs. In both types of methods of production companies produce a batch or group of batches at a time. One thing is ensured in this method is that the batch produced must not be resembled with the next batch. It helpscompany to manufacturerepetitiveproductson a largeextent but thismethodof production is not suitable for Tesco as it is suitable for the companies who are dealing in the industry of nuts, bolts and biscuits.
Produce large quantities at lower cost- Companies such as Tesco are manufacturing goods in bulk rather than assembling the products individually by hand so that company does not require much of a labor for human. If the production line of the company is set up to the mark then company will be able to generate high amount of efficiency, increase in production, low cost of labor. (Tse and et.al., 2016.) Simplify the base of Product- The process of production helps the company to reduce the complexity of method with keeping the most important factor in mind that not reduce the quality of the product. Uniform Product- It helps to ensure that all the products are of same quality and not even single one of them has variation in them. For instance if a worker in Tesco produces one good batch his product might have the chances to be different from others. These methods help the company to meet their goals and objectives. Cons Expense- Bringing new technology into business will stop the flow of cash. If a company takes a debt or loan in order to purchase the production it will create a heavy burden for the business. Companies such as Tesco must evaluate their cost of the productivity which is reduced and workers of the company will be able to learn and practice the working of the machines which is new in the company and will change the process of production. Company has to emphasize on the nature of the machines otherwise it will demand to expand the area and bring more machines which will increase the productivity but will require a lot of funds to maintain. Resistance to Change- Market is rapidly changing and so are the needs of the people which will require companies to change their process and the pattern of working. The problem is it is not easy to implement the change as the workers are used to the earlier pattern of working and it will take time for them to adjust with the new method. That is why company must ask and consult with their team before implementing the change.
Identify and prioritise quality improvements you would recommend to the product/service delivery, by using continuous improvement frameworks. Six Sigma- Tesco must use the strategy of six sigma as it helps the business to grow and improve continuously. It helps the company to improve their predictions for the outcome and eliminate the variability. This model has some of the specific goals that helps to maintain the stability in the business and and the process of prediction as it helps the company to define their objectives andmeasuretheireffectivenessinrelationwiththefactorofimprovingthequalityby sustainability. It is a disciplined approach and takes the help of lot of method so that quality of the product can be managed. The method undertakes the help of statistical analysis which relies on the structure of the company which must include some experienced and trained people to observe them. Each role in this method has to be meet as it includes some responsibilities if they are not met then the company won't be able to reach success. (Wood, Coe and Wrigley, 2016.) Kaizen- It is a Japanese word which means continuous improvement or change for better.As compared to Six Sigma this model is rigid. This model helps Tesco to increase the morale of the employees, eliminate the waste and focus on improving the quality. It helps the company to encourage their employees so that they can increase the participation made by them and increase the efficiency and productivity of the company. One different point of this aspect is that it encourages people irrespective of their designation in the company it can be the CEO or someone from lower level of management. This model helps the company to focus on two aspects that is process and flow. Flow helps to focus the company on the area of flow of information and materials. On the other hand Kaizen helps in improving the team and the process of individual. With the help of this method company implement the change and measure their results. Company tries new experiment so that they can figure out which way is effective for improvement. (Johnson and et.al., 2018)
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CONCLUSION From the above studies it has been concluded that Tesco has the scope to expand their operations in different countries they just have to wait for the right opportunity and take the chance. Company must use the strategy of continuous improvement such as Six Sigma and Kaizen. It will help the company to reduce the errors they are making and eliminate the waste which will ultimately increase the productivity and profitability of the company. This report also covers the challenges faced by the company and the 4 v model with emphasizing on improving the quality. Apart from this the production process with their pros and cons have also been highlighted. This report has also covered the gantt chart. The production process helps the company to figure out which method is suitable according to their sector. So that the company can serve more customers with quality products.
REFERENCES Books and Journal Johnson, S.,and et.al., 2018. Tesco Bank Wellbeing Case Study. In WELL-BEING (pp. 179-188). Palgrave Macmillan, Cham. Wood, S., Coe, N.M. and Wrigley, N., 2016. Multi-scalar localization and capability transference: exploring embeddedness in the Asian retail expansion of Tesco. Regional Studies, 50(3), pp.475-495. Gonen, N.,and et.al., 2017. Normal levels of Sox9 expression in the developing mouse testis depend ontheTES/TESCOenhancer,butthisdoesnotactalone.PLoSgenetics,13(1), p.e1006520. Nguyen, L.T., and et.al., 2017. The effect of click & collect service in the context of retail atmospherics on consumer buying behaviour in terms of repurchase intention: an empirical study of Tesco UK. In 4th International Conference on Innovation in Economics and Business (Vol. 87, pp. 43-51). Wood, S., Wrigley, N. and Coe, N.M., 2016. Capital discipline and financial market relations in retail globalization: insights from the case of Tesco plc. Journal of Economic Geography, 17(1), pp.31-57. Zhao, L., and et.al., 2017. Reduced Activity of SRY and its target enhancer Sox9-TESCO in a mouse species with X* Y sex reversal. Scientific reports, 7, p.41378. Tse, Y.K.,and et.al.,2016. Insight from the horsemeat scandal: Exploring the consumers’ opinion of tweets toward Tesco. Industrial Management & Data Systems, 116(6), pp.1178-1200. Evans, B. and Mason, R., 2018. The lean supply chain: managing the challenge at Tesco. Kogan Page Publishers. Felgate, M. and Fearne, A., 2015. Analyzing the impact of supermarket promotions: a case study using Tesco Clubcard data in the UK. In The Sustainable Global Marketplace (pp. 471- 475). Springer, Cham. Lazarov, O. and Tesco, G. eds., 2016. Genes, environment and Alzheimer's disease. Academic Press.