Introduction to Business Operations and Management- Case Study

This case study explores the importance of business operations and management decisions through a detailed analysis of Tesco. It covers topics such as production, supply chain, logistics, location strategy, quality control, and HR.

Introduction to Business Operations and Management- Case
Study

Table of Contents
INTRODUCTION………………………………………………………………………………2
WHAT IS BUSINESS OPERATION…………………………………………………………..3
MAIN FUNCTION OF BUSINESS OPERATION…………………………………………….4
DESCRIPTION OF TESCO…………………………………………………………………….6
EVALUATION OF TESCO OPERATION MANAGEMENT DECISION……………………7
CONCLUSION…………………………………………………………………………………10
REFERENCES………………………………………………………………………………….11

INTRODUCTION
Operations management is one of the major functions of business function, it manages the
processes of production and supply-chain of products and services. The main focus of the
operation is on the efficiency and effectiveness of processes. (Chary, 2017 ) Operation is the
factor of business that is involved in designing and controlling the processes of producing
goods and services. The case study will evaluate the operation and management decisions of
Tesco. Tesco is a British groceries Retailer Company, founded in 1919 by Jack Cohen. This
report will show how the business operation and management decisions are important for the
company. It will also evaluate Tesco operation management decision in production, supply
chain, logistics, location strategy, quality control, and HR.
MAIN BODY
What is Business Operation?
Operation Management and its function and evaluating operation management decisions
Every organization wants to increase its business, operation is a concept where a business
analyses and develop business methods in services or in production. Operation covers by
studying how productivity can be enhanced and how to provide high-quality standards of
products. The decisions are taken by operations required to ensure that company is giving
adequate services using fewer resources and successfully working to satisfy customer demands.
The process of operation includes both internal and external factors to make a victorious plan.
The traditional way of operation only includes the production of goods and services on time, but
in the modern organization, there are many different modes of operations management.
Operation management targets to raise the content of value-added projects of every process.
Basically, these value-adding creative projects are followed by the market opportunity for the
organization.

The operation manager of Tesco is responsible for looking at the production processes to
work without difficulty. The process of production assures quality standards, keeping track of
material and labor cost, cost-cutting which makes sure that no extra cost is burned on the final
product. The role of the operation manager of Tesco is very big the role of an operations
manager is broad, all-embracing different operational areas like production, inventory, quality,
supply -chain, logistics, location, and many more. (Hazen and et.al., 2018.) The operational
teams of Tesco do multi-tasking work which includes managing the quality and quantity, doing
production within the budget, proper movement in supply-chain, and all the activity of
development. In the competitive world, when globalization has heightened the market, the work
of the operation managers have enhanced a lot more.
One of the main aims of a retail company, Tesco is to store products that customers
require and at a cost that the customers can pay or customers and afford. The company has to
manage an adequate inventory system that registers what is in stock at a time while decreasing
situations of dead stocks. Deadstock means products that are with the organization now but are
not in high demand. For increasing the profit, Tesco should store fast-moving products which are
in demand of market and customers. The company should always be open to friendly credit
terms with distributors as they can regulate the demanded products on credit to prevent stock-
outs.
Main functions of Business Operation
Operation Management functions are also important in other areas of business like in
Finance, HR, Marketing, and Research & Development.
Finance
Every organization makes a financial budget for their products or services,
including the operation management with them help in planning effectively For example, if
Tesco wants to open a new branch in a new city, the finance department will prepare the budget
for the new branch and the operation department will control the extra cost and will assure the
supply of product in the new branch. When the operation decides for the finance sector of the
company, it is simpler to evaluate the costs and profits of the investment. (Ekpo, and et.al.,

2017.) It is very important to ensure that funds rase for products or services is used
systematically.
Human Resources
Human Resources are responsible for staffing, training, compensation, and benefits,
policies, and continuous improvement of employees in the organization. The HR teams work
from finding the right employees for the company to provide training and look they follow the
policies of the company. The work of operation management is to look that proper training is
given to employees, track of employees' data is systematic, working hours, and leave planning
are documented clearly by the HR team.
Marketing
When an organization brings a new product into the market, then the marketing
department works with operation teams to build the plan of promotion so that company gains
profit. As an example, if Tesco wants to open a new branch, in a new city, the customers'
requirement in that particular city is to be determined first. Tesco provides meat in the UK and
Thailand, in both countries, but the price of meat in both countries may differ. This is because
operation management has to look at the logistics and supply-chain of product in a new place.
(Han , 2020.) Operation and Marketing working together aid an advantage in the development of
the company and also the optimal utilization of resources.
Research & Development.
Research and development (R&D) and operation while working together innovate and
launch new products and services, with creating and controlling the process of production. R&D
provides technology services to the functional department while operations maintain a balance
between demand and resources. (Business operations and its function. 2018.) The operation
provides resources to R&D, which they use to develop the products or services.

Description of Tesco
Tesco a groceries retailer company, based in United Kingdom, was founded in 1919 by
Jack Cohen. The company provides its services mainly in United Kingdom and Europe. Ken
Murphy is currently the CEO of Tesco. A public limited company earns annual revenue of
$82,776 in 2020. Other than groceries, Tesco has also entered in the market of beauty products,
consumable items, and electronic products. Tesco operates multiple shops varying from shops in
the city centers to hypermarkets in the suburbs and outside cities. Tesco also runs trade units in,
the Republic, Slovakia, Taiwan, Poland, Hungary, Malaysia, Czech, Ireland, and Thailand.
Evaluation of Tesco operation management decision on production, supply
chain, logistics, location strategy, quality control, and HR.
Production
Operations managers make many decisions in the production function, like planning,
organizing, staffing, directing, and controlling the process of the product from raw materials of
the final product. (Zhichkin, K., and et.al., 2019.) At every level of operation, management has to
make a decision and implement it. The evaluation of production decision in operation
management of Tesco is executed as follows-
 Description - Description of any product, new or old in detail format is the first process
of production. A target of production is set which will achieve the organization's goal and
also satisfy the customer needs. Operation management in production work with finance,
R&D, and marketing department to have a planned strategy of production which also
control cost.
 Planning -It is the framework of operation management where the planning of
production is executed. Planning is the way which presents administrations of the
company, it also shows where the company is at present and where it would be in the

forthcoming years. A well-planned strategy of production shows that how much sales and
profit will increases.
 Organizing: Production also includes the process of the organization as management
must organize all its resources before placing them in the market for sale. Organizing is
an internal process of operation which includes selection, coordination, and
administration of tasks and the flow of information within the organization.
 Directing and Controlling - Directing and controlling is the next process of production.
Operation management decides to control and manage the action of the process of
production. This helps in the production process to work accurately and efficiently.
Supply Chain Management
Supply Chain is the process of planning and supervision of all activities involved in
sourcing and procurement, conversion, and all Logistics Management method. It also includes
coordination and collaboration with channel partners, which can be suppliers, intermediaries,
third-party service providers, and customers. The supply chain mainly maintains the supply and
demand process within the company and across companies. (Kusi-Sarpong, and et.al., 2019.) The
operation management in Tesco used the process of the supply chain to understand the working
of suppliers, logistics, and customers all over the world. Tesco's supply chain department makes
key decisions on selecting vendors, coordinates with the purchasing department, maintain the
warehouse of the company and forecasting for new and upcoming products. They also anticipate
the demand for raw materials and products in the future. A supply plan is build to ensure the
accessibility of raw material. The supply chain of Tesco is also evaluated based on vendors and
the problem faced by vendors during the supply of material. Inventory of Tesco is also analyzed
and evaluated in every store of Tesco, and the decision is taken on how to increase inventory
services, overcome waste, or maximize customer services. The decision is also done for
maintaining the supply chain with other functional areas, such as sales, marketing, finance,
production, or quality assurance.

Logistics
Logistics is the concept which maintains the flow of goods from manufacturing to the
consumption of the products, to meet customers' requirements. The logistics of physical items in
Tesco, which includes the retail product, requires the integration of information flow, material
handling, production, packaging, inventory, transportation, and warehousing. (Ar and et.al.,
2020.) A logistics network design is created by operation management which is also analyzed
and evaluated by them. It is also evaluated that design creates by the team is actually working in
the field. Operation strategies are planned to maintain and manage the international operations
and the also difficulties faced by Tesco to global brand image. Tesco holds about a 13% share in
the UK retail market. In Tesco, the stocks are checked every day on a real-time basis, and based
on the inventory, orders are processed for the future. A plan is prepared for pick-up of product
from warehouse to deporting them to Tesco store.
Location strategy
Providing the right product at the right place refers to location strategy. A location
strategy is planning for the optimal location for a company by identifying customers'
requirements and searching for locations with offerings that are compatible with these needs and
objectives.( Battal, 2020.) There are 7,005 Tesco’s stores operating worldwide which provide
different product to its customers according to their needs. One of the location strategies of
Tesco was that they have started selling halal meat for its Muslim customers in every area of
stores where the meat-eating population was in number. In the UK, some stores of Tesco have
opened independent meat counters. The same strategy was followed in Malaysia and Thailand as
there also meat eating customers are more. Tesco is located in With Central Europe and Asia,
and the decision of transportation and distribution of goods at the new locations were managed
by operation management. Maintaining the same quality of the product is a challenging task for
Tesco.

Quality control
Tesco work on the goal of proving high-quality to customers achieving both company
policy and legal requirement.(Krajcsak, 2018.) Tesco runs a Tesco Food Manufacturing
Standard (TFMS) policy that governs its plan with suppliers and their obligations to the
company. Quality control focuses mainly on the quality of the product given and the services
provided. In Tesco the main features which are considered during quality check are -
Safety – All products of Tesco should reach microbiological standards throughout their shelf life.
Quality – The products should look good and food items should be fresh and tasty.
Legality – All legal terms such as compositional standards and labeling should be fulfilled for all
the products.
Customer Focus – Store should have all the products which are required by customers, all
necessities product customers need should be provided in the stores of Tesco.
Human Resources
Tesco works with approximately 420,000 employees worldwide. About 310,000 people
work in the UK with Tesco. As the employee is all over the world, a feasible HRM plan and
various strategy to manage employees is very important. The HRM plan will include a different
strategy for local employees and a different strategy for foreign employees. (Olson and et.al.,
2018.) This strategy includes training and development of employees, communication with
employees, consultation to employees, and giving rewards and benefits to employees. Every
year, Tesco employs a large number of staff and provides them training.

CONCLUSION
In this case study operations and management decisions were evaluated of Tesco. It is
concluded that for a successful business Business operation and its functions are very important.
Without the operation management in the company, it cannot reach the standard of customers. It
also shows that operation management decisions are required in production, supply chain,
logistic, location, quality control, and in the Human Resources department. Operation
management decisions in all the areas of business are essential for achieving company goals.

REFERENCES
Books and journals
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Decision Framework. Expert Systems with Applications, p.113543.
Battal, T., 2020. Understanding the logistics centre location decision: what are the main decision
criteria and evaluation methods?. International Journal of Logistics Economics and
Globalisation. 8(2). pp.154-192.
Chary, S.N., 2017. Production and operations management. McGraw Hill Education.
Ekpo, N.B., and et.al., 2017. Finance manager and the finance function in business
sustainability. International Journal of Business, Marketing and Management. 2(1). pp.31-38.
Han, C.S., 2020. Modelling the impact of communication technology on e-commerce operation
mode. International Journal of Information and Communication Technology. 17(3). pp.242-256.
Hazen, B.T., and et.al., 2018. Back in business: Operations research in support of big data
analytics for operations and supply chain management. Annals of Operations Research. 270(1-
2). pp.201-211.
Krajcsak, Z., 2018. Successes of quality management systems through self-evaluation and
commitment in different organizational cultures. Management Decision.
Kusi-Sarpong, and et.al., 2019. A supply chain sustainability innovation framework and
evaluation methodology. International Journal of Production Research. 57(7). pp.1990-2008.
Olson, E.M., and et.al., 2018. The application of human resource management policies within the
marketing organization: The impact on business and marketing strategy
implementation. Industrial Marketing Management. 69. pp.62-73.
Zhichkin, K., and et.al., 2019. August. Development of evaluation model effectiveness of
modern technologies in crop production. In IOP Conference Series: Earth and
Environmental Science (Vol. 315, No. 2, p. 022023). IOP Publishing.
Online
Business operations and its function. 2018. [ONLINE] Available through:
< https://www.tenfold.com/what-is/what-are-the-business-operations-of-a-company/

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