Challenges to Business Success in Operations Management

This paper analyzes the challenges faced by operations managers and their impact on business success using the case study of Woolworths Group. It discusses the recent changes in operations management, the impact of challenges on Woolworths, resource management, quality management, and goods and service design.

Running head: ORGANISATIONAL MANAGEMENT
CHALLENGES TO BUSINESS SUCCESS AN OPERATIONS MANAGEMENT
FOCUS
Name of the Student:
Name of the University:
Author’s Note:

1OPERATIONS MANAGEMENT
Introduction
As opined by Zeng, Phan and Matsui (2015), the extensive usage of the process of
globalisation as well as different kinds of innovative and disruptive technologies had
significantly transformed the modern business world. Brewster, Mayrhofer and Morley
(2016) have noted that one of the important changes which had been witnessed in the
spectrum of the business world can be ascribed to the process of operations which is being
used by the contemporary business firms. The continuous changes in the field of technology,
the ever-increasing number of firms which are entering into the business markets of the
emerging nations, the changing quality standards and others have forced the firms to change
the operations management which is being used by them (Kato et al. 2015). Furthermore, it
had been seen that the choices related to the commodities or services which are available to
the customers had increased which had significantly enhanced the expectation of the
customers (Mahadevan 2015). The resultant effect of this is that the business firms in order to
fulfil the expectations of the clients or the customers are not only using the process of
effectively designing the commodities or services offered by them but also creating effective
job designs for the employees so that they would be able to deliver high-quality goods or
services to their clients or customers (Khanna 2015). These in short are some of the factors
which had precipitated the much-needed change within the couldron of the operations
management process used by the business firms. This paper intends to analyse how the recent
changes in the field of operations management or for that matter the challenges faced by the
operations managers are likely to affect the prospects of the modern business firms using the
case study of the Australian retail firm, Woolworths Group.

2OPERATIONS MANAGEMENT
Overview of Woolworths Group
The Woolworths Group, founded in 1924, is an Australian retail chain with extensive
retail interests in the nation of Australia and New Zealand (Woolworths.com.au 2019).
Furthermore, the firm is reputed for the large number of products or services like grocery
products to furniture, financial services, books and others that it offers to the customers
(Ibisworld.com.au 2019). More importantly, it is seen that the concerned firm has more than
992 retail outlets in the nation of Australia and New Zealand and for the year 2018 the annual
revenue earned by the firm was more than A$56.726 billion (Woolworths.com.au 2019). As a
matter of fact, in the recent times in order to enhance its profitability the concerned firm had
embraced the e-retail model of business and thereby started its “Woolworths Online”
initiative so as to effectively capitalise on the demand presented by the e-commerce model of
business (Ibisworld.com.au 2019). Moreover, it is seen that the concerned firm taking the
help of the different kinds of emerging technologies is trying to improve the efficiency of the
operations management processes used by it with the objective of offering the customers
cost-effective as well as superior quality services or products to the customers.
Impact of the challenges on Woolworths
Swink et al. (2017) have noted that the business firms during their business operations
face several issues or challenges that adversely affect their business or financial prospects. As
opined by Andreassen et al. (2016), the fortunes of the business firms substantially depends
on the efficiency with which they mitigate or tackle the adverse effects of the challenges or
the issues that they face during their business operations. Some of the most challenges or the
issues that the business firms commonly face during their business operations are on the score
of different emerging technologies, extensive usage of the process of globalisation, changing
customer expectations, job designs, the quality manufacturing processes used by the firm, the
manufacturing processes used by them and others (Huotari and Hamari 2017). An analysis of

3OPERATIONS MANAGEMENT
Woolworths on the basis of these challenges or issues is likely to yield significant
information regarding the concerned firm.
Brewster, Mayrhofer and Morley (2016) are of the viewpoint that the recent changes
in the field of technology had substantially transformed the business processes or the
operations management processes or principles used by the firms. For example, the firms like
Woolworths and others are taking the help of the different emerging technologies like
‘internet of things’, smart technologies and others to drastically change the operations
management processes that they had been using over the years (Ibisworld.com.au 2019). This
in turn had not only enhanced the efficiency or the effectiveness of the operations
management processes used by the concerned firm but is also one of the major factors which
had substantial enhanced the profitability earned by the firm as well.
The extensive usage of the process of globalisation and the entry of different business
firms into the Australian retail industry from the diverse third world nations had potentially
enhanced the business competition faced by the concerned firm. As opined by Fernie and
Sparks (2018), this had significantly enhanced the number of choices or options which the
customers have and this had increased the brand switch propensities among the customers.
Furthermore, unlike the earlier times when the major consideration for the customers before
buying a particular product or services were its cost and quality in the present times the
customers are also focusing on the aspects of brand image, value proposition, the corporate
social responsibility practices used by the firm offering the concerned product or service, the
manufacturing process used by it and others (Ramanathan, Subramanian and Parrott 2017). In
the particular scenario of the Australian retail industry, the firms Woolworths and Coles hold
more than 80% of the market share of the concerned industry on the score of the positive
brand image as well as the loyalty of the customers that they have. More importantly, the
products or services which are offered by Woolworths have been highly appreciated by the

4OPERATIONS MANAGEMENT
customers not only on the score of their high quality but also because of the fact that they are
highly cost-effective for the customers (Bernon, Cullen and Gorst 2016). The resultant effect
of this is that the customers who switch brands from Woolworths to other firms have to pay a
higher amount of cost for the same kind of products or services and also the quality of the
concerned products or services are not on par with the ones offered by Woolworths.
However, at the same time it needs to be said that the firm Woolworths had significantly
modified its operations management process in the recent keeping in perspective the
increasing business competition that it is likely to face in the Australian retail industry
(Ibisworld.com.au 2019). This in turn had not only improved the operations management
process used by Woolworths but at the same time had helped it delivering better quality
services or goods to the customers.
The firm Woolworths in order to cope with the fierce business competition had also
redesigned the jobs that the employees perform within the framework of the concerned firm.
Moreover, it is seen that unlike the earlier times when all the work of the concerned firm was
completed by the human beings, the firm is taking the help of automation to not only reduce
the workload of the employees but also to improve the quality of the work that they perform
(Bernon, Cullen and Gorst 2016). The concerned firm is taking the help of effective job
design to enhance their job satisfaction level but also help them to offer suitable services to
the customers as well. More importantly, it is seen that the concerned firm in order to satisfy
the expectations of the customers is conducting different kinds of market researches and
designing their goods or services as per the results that they get from these researches (Ross
et al. 2017). This in turn had forced the Woolworths to significantly modify the earlier
manufacturing process which it used to use wherein it was seen that the products or services
were offered to the customers simply on the basis of the demand of the concerned products or
services (Kurnia et al. 2015). However, through the effective usage of the construct of market

5OPERATIONS MANAGEMENT
researches the firm had been able to offer customer-centric products or services which in turn
had helped it to earn the satisfaction or the loyalty of the customers (Heizer et al. 2017). An
important aspect of this is the fact that this had significantly enhanced the quality of the
commodities or the services that the concerned firm offers to the customers.
Resource Management
Hitt, Xu and Carnes (2016) are of the viewpoint that the construct of resource
management is the process through which the firms try to effectively utilise the resources that
they have so as to attain the desired level of growth or development while achieving the
business objectives or goals outlined by it. On the other hand, Reid and Sanders (2015) have
stated that the machinery of resource management can also refer to the process through which
the different firms undertake the effective development of their organisational resources like
human resources, financial resources and others. The process of resource management is an
important aspect of the business firms because of the fact that the financial as well as the
organisational resources of a firm depends on the efficiency with which they are being able to
utilise the different resources that they have (Khanna 2015). In the particular case of
Woolworths, it is seen that the construct of resource management becomes especially
important because of the fact that of the fact that the concerned firm belongs to the retail
sector and the services offered by the firm greatly depends on the manner in which the firm
utilises its organisational resources. The firm needs to constantly develop its human resources
in an effective manner so that they are being able to offer high quality services to the
customers which in turn greatly determines the loyalty or the satisfaction of the customers
(Zeng, Phan and Matsui 2015). More importantly, the effective utilisation of the financial
resources is important because it will help the firm to invest in new kinds of products or
services and the establishment of new retail outlets which in turn would help in the growth of
the concerned firm (Siva et al. 2016). Furthermore, it is seen that the concerned firm over the

6OPERATIONS MANAGEMENT
years had tried to reduce the wastage of its organisational resources by ensuring the fact that
the employees are not being overburdened with work and also there is an even distribution of
the work of the firm (Huotari and Hamari 2017). On the score of these aspects, it can be said
that the process of resource management is an important one from the perspective of the
Australia retail firm Woolworths.
Quality Management
Brewster, Mayrhofer and Morley (2016) have articulated the viewpoint that the
construct of quality management is the process which requires the business firms to use
different kinds of activities like overseeing, controlling, monitoring and others so as to ensure
that the commodities or services offered by it had the desired level of quality. As opined by
Kato et al. (2015), the aspect of quality management is important from the perspective of the
modern business world because of the increasing amount of competition that they are facing
and also the increasing brand switch propensities shown by the customer. The resultant effect
of this is that the firms try to maintain an adequate quality standard for the commodities or
services that they offer so as to gain a competitive edge over its rivals. More importantly, the
loyalty or the satisfaction level of the modern customers greatly depends on the quality of the
commodities or the services which are being offered by them. Thus, it can be said that the
aspect of quality management is an important one from the perspective of the contemporary
business firms. As a matter of fact, the process of quality management gains a special
significance in the particular case of the firm Woolworths because of the fact in the face of
the large number of retail firms which are operational in Australia the customers are
increasingly taking into account the attribute of quality (Siva et al. 2016). The resultant effect
of this is that the concerned firm is increasingly focusing on the attribute of quality of the
products or services that it offers to the customers so as to earn their loyalty or satisfaction
and thereby earn a higher amount of profitability and also competitive advantage in the retail

7OPERATIONS MANAGEMENT
industry of Australia (Khanna 2015). The concerned firm is presently using different kinds of
overseeing, monitoring, regulatory and other similar kind of practices so as to ensure that the
quality of the commodities or services offered by the concerned firm are uniform in nature
and also as per the expectations of the customers.
Goods and Service design
Ross et al. (2017) have stated that the financial as well as the business fortunes of the
firms depends on the nature or the goods or services which is offers. As opined by Heizer et
al. (2017), an important aspect that the business firms need to take into account for the
designing of the commodities or services offered by it is the fact that they are alignment or
conjunction with the expectations or the needs of the clients or the customers. Furthermore, in
the face of globalisation of international trade and commerce the options which are available
to the customers had increased in an exponential manner and thereby the customers generally
do not opt for the kind of commodities or services that are not in conjunction with their needs
or demands (Hitt, Xu and Carnes 2016). It is seen that to combat this particular challenge the
different business firms are increasingly using the construct of market research or customer
surveys so as to understand the expectations of the customers from a particular product or
service (Khanna 2015). In this regard, it needs to be said that the results of these market
researches or surveys offer valuable information to the enterprises regarding the needs or the
expectations and thereby they have the opportunity to create the kind of product or services
that would be appreciated or liked by the customers. In the particular case of the firm
Woolworths, it needs to be said that the firm is presently taking the help of the construct of
market researches and customer surveys so as to offer the kind of goods or services to the
customers which would be in alignment with their needs or requirements (Bernon, Cullen and
Gorst 2016). This is important on the score of the fact that the retail industry of Australia is a
highly competitive one and the customers generally tend to opt for the kind of goods or

8OPERATIONS MANAGEMENT
services which best suits their needs or requirements (Ibisworld.com.au 2019). More
importantly, the steady increase in the customer base as well as the annual revenue earned by
the firm under discussion here clearly indicates the fact that the firm over the years had been
greatly successful in taking into the needs or the requirements of the target market that it
services. On the score of these aspects, it can be said that it had become imperative for the
firms to take into account the requirements or the needs of the customers for the designing of
the products or services.
Conclusion
To conclude, there are various factors that the modern business firms need to take into
account for the process of their business operations and the financial prospects or the success
of the firms greatly depends on the ease with which they are being able to take into account
these factors within the framework of their business operations. Some of the most important
factors in this regard are the different emerging technologies, globalisation, changing
customer demands, changing job designs and others. Moreover, it had been seen that the
firms like Woolworths and others over the years had been successful in transforming the
operations management process that they had been using taking into account these factors.
The firm Woolworths had significantly changed its resource management, quality
management and goods and services design taking into account the above-mentioned
challenges or issues. These aspects become clear from the above analysis of the firm
Woolworths and the manner in which it had changed its operations management process so as
to overcome the different challenges posed by the ever-changing business world.

9OPERATIONS MANAGEMENT
References
Andreassen, T.W., Kristensson, P., Lervik-Olsen, L., Parasuraman, A., McColl-Kennedy,
J.R., Edvardsson, B. and Colurcio, M., 2016. Linking service design to value creation and
service research. Journal of Service Management, 27(1), pp.21-29.
Bernon, M., Cullen, J. and Gorst, J., 2016. Online retail returns management: Integration
within an omni-channel distribution context. International Journal of Physical Distribution
& Logistics Management, 46(6/7), pp.584-605.
Brewster, C., Mayrhofer, W. and Morley, M. eds., 2016. New challenges for European
resource management. Springer.
Fernie, J. and Sparks, L. eds., 2018. Logistics and retail management: emerging issues and
new challenges in the retail supply chain. Kogan page publishers.
Heizer, J., Render, B., Munson, C. and Sachan, A., 2017. Operations management:
sustainability and supply chain management, 12/e. Pearson Education.
Hitt, M.A., Xu, K. and Carnes, C.M., 2016. Resource based theory in operations management
research. Journal of Operations Management, 41, pp.77-94.
Huotari, K. and Hamari, J., 2017. A definition for gamification: anchoring gamification in the
service marketing literature. Electronic Markets, 27(1), pp.21-31.
Ibisworld.com.au 2019. Retail Trade – Australia Industry Research Reports | IBISWorld.
[online] Available at: https://www.ibisworld.com.au/industry-trends/market-research-
reports/retail-trade [Accessed 6 May 2019].
Kato, T., Nakajima, T., Saito, T., Okitsu, J., Shiga, Y. and Miki, Y., Hitachi Ltd,
2015. Operations management methods and devices thereof in information-processing
systems. U.S. Patent 9,128,704.

10OPERATIONS MANAGEMENT
Khanna, R.B., 2015. Production and operations management. PHI Learning Pvt. Ltd..
Kurnia, S., Choudrie, J., Mahbubur, R.M. and Alzougool, B., 2015. E-commerce technology
adoption: A Malaysian grocery SME retail sector study. Journal of Business Research, 68(9),
pp.1906-1918.
Mahadevan, B., 2015. Operations management: Theory and practice. Pearson Education
India.
Ramanathan, U., Subramanian, N. and Parrott, G., 2017. Role of social media in retail
network operations and marketing to enhance customer satisfaction. International Journal of
Operations & Production Management, 37(1), pp.105-123.
Reid, R.D. and Sanders, N.R., 2015. Operations Management, Binder Ready Version: An
Integrated Approach. John Wiley & Sons.
Ross, A., Khajehnezhad, M., Otieno, W. and Aydas, O., 2017. Integrated location-inventory
modelling under forward and reverse product flows in the used merchandise retail sector: A
multi-echelon formulation. European Journal of Operational Research, 259(2), pp.664-676.
Siva, V., Gremyr, I., Bergquist, B., Garvare, R., Zobel, T. and Isaksson, R., 2016. The
support of Quality Management to sustainable development: A literature review. Journal of
Cleaner Production, 138, pp.148-157.
Swink, M., Melnyk, S.A., Hartley, J.L. and Cooper, M.B., 2017. Managing operations
across the supply chain. New York, NY: McGraw-Hill Education.
Woolworths.com.au 2019. Woolworths Home. [online] Available at:
https://www.woolworths.com.au/ [Accessed 6 May 2019].

11OPERATIONS MANAGEMENT
Zeng, J., Phan, C.A. and Matsui, Y., 2015. The impact of hard and soft quality management
on quality and innovation performance: An empirical study. International journal of
production economics, 162, pp.216-226.