Comparative Analysis of Operations Management: ALDI and Sainsbury's

This report provides a comprehensive analysis of operations management, focusing on the retail giants ALDI and Sainsbury's. It begins by differentiating between leaders and managers, exploring their roles, characteristics, and authority. The report then delves into the functions of management, based on Fayol's principles, and discusses how these principles are applied in different organizational contexts. It examines various leadership styles, including situational leadership and systems leadership, and their impact on organizational efficiency. The report also explores contingency planning, highlighting the importance of preparing for unexpected events. Furthermore, it examines Just-In-Time (JIT) inventory systems, emphasizing their role in optimizing operations and reducing waste within the context of ALDI and Sainsbury's. Through this comparative analysis, the report offers valuable insights into effective operations management practices in the retail sector.

OPERATIONS
MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 ...........................................................................................................................................1
2..............................................................................................................................................2
3..............................................................................................................................................4
Task 2...............................................................................................................................................6
1..............................................................................................................................................6
2..............................................................................................................................................8
3............................................................................................................................................10
........................................................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
.......................................................................................................................................................14

INTRODUCTION
Management and operations is business administration who are responsible for
maximizing efficiency of employees in an organization so that waste could be minimized. This
project is based on ALDI which is international retail company and it is situated in United
kingdom. On the other hand, Sainsbury's is chosen for the task second in this report which was
founded by John James Sainsbury's and it is the second largest chain of supermarkets in United
Kingdom. It deals in UK and have products like Hypermarket, supermarket, convenience shops,
etc. the This whole research walks around concepts and approaches of management and
operations, in which difference between manager and leader, their traits, characteristics, different
functions in organizational context, have been described respectively(Benzarti Sahin Dallery,
2013).. Following report makes readers able to learn about how managers and leaders can
improve efficiencies of operations management in order to meet organizational objectives.
Importance and values of operations management also described in between of report.
TASK 1
Leader – A leadership is a position in an organization to influence a group of people
towards the achievement of a goal. Or another words it can be called as the leader is the
considered as the person who leads or command a group in an organization.
Manager – A manager is a person in an organization who are responsible for controlling
or administrating the organization or may be a group of staff. Where as other people of the
organization are responsible to report to the manager(Brown et. al., 2013) .
Difference between leader and manager
Basis Managers Leaders
Roles and Responsibilities Implementation of Plans Employee Guidance
Recruitment, performance
appraisal, employee
motivation
Creating and Executing
timeline.

Characteristics Commitment, versatility,
knowledge
Delegation, confidence.
Authority and power Reward power Legitimate power.
Similarities between leader and manager
Basis Leaders Managers
Roles and responsibilities Develop mission, vision, goals Decide path to achieve
effectiveness.
Characteristics Leaders should have better
knowledge about their work
area because they have to give
directions accordingly.
Managers have functional
knowledge because they just
have to manage their whole
organizations according to
their functions.
Authority and power Give directions to team
members
Manage and control activities
carried out within organisation.
Traits Take better decisions, inspire
others
Enhance employee motivation
so to fulfil day-to-day
operations.
2
Managers can be defined as persons who are responsible for managing a group of people
who report to them. For example, there are various departments in an organization and they
designate their managers to be line managers, staff managers, which depends upon functions of
departments and capabilities of managers(Galindo Batta, 2013).
2

Leaders can be defined as individuals who are responsible for influencing people working
under them in order to gain a specific result. Leaders are too much committed to goal for which
they will influence their subordinates so that they get motivated by them and work accordingly.
Fayol Description of managers function:
This theory was given by Henry Fayol in a more practical way by giving 5 theories of
principles of management. These are:
Planning: This term means to look ahead and for this mangers and leaders have to draw
up a good action plan in order to successful achievement of organizational objectives. Planning
requires active participation of each and every member of organizations like ALDI company.
Planning is a post production activity which is to be started at very early stage so that every step
should be followed according to plans and policies framed.
Organizing: Organizations can work properly only when they are well organized. This is
a important characteristic of organizing which means that ALDI have sufficient capital,
employees, resources and raw materials so that work can be done in a proper way.
Commanding: Since ALDI is engaged in chain of supermarkets and hence it needs high
degree of commanding in their working environments, because employees will work properly
only when they get clear and concrete instructions from their seniors(Galloway Rowbotham
Azhashemi ,2012). This is one of main functions which has to be performed in order to carry out
work in an efficient manner.
Co-ordinating: organizations have gathered all resources and raw materials at one place
and made plans accord to requirements, but employees will work more better when all activities
are harmonized. Because ALDI is one of largest companies and it requires co-ordination between
activities and all members of company, as well.
Controlling: This is last step in Fayol's principle theory in which managers and leaders of
an organization set up performance standards to compare them with actual performances of them
and employees as well. After comparison, if some deviations are there then take corrective
measures to avoid them. Controlling ensures improvements in performances.
There are 3 situations where changes occurs in an organization and then managers and
leaders have to take decisions accordingly(Gunasekaran Ngai, 2012). These are:
Slow changes: There are changes occurring in organizations but at slow pace. In this
situation, for example in Sainsbury's company, managers and leaders tend to take decisions but
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slowly. Like, decisions regarding remuneration of employees, policies of company. These
changes cannot been made very fast because these need due consideration for make changes.
Moderate changes: These changes are different from slow changes because they differ in
requirements. For instance, some changes need deep discussions with their teams and employees,
as well. So, moderate changes take place at medium speed but fast from slow changes. As in;
ALDI have to establish new policy to reduce pollution in order to decrease pollution in
environment. These need clear discussions with everyone in company and hence take time to
implement changes.
Fast changes: At time occurs in an organization, where they have to make changes very
rapidly because they need to be applied immediately. For example, ALDI business is for
supermarkets and hence they have to take big decisions which should be implemented right at
time otherwise company may suffer losses. For instance, technologies are coming to ALDI they
are frequent and needs to be addressed immediately(Hill, 2012).
3
Situational Leadership – Situational leadership is referred when the leader or manager
of an organization adjust his behavior with the environment to alter with employees whom wants
to influence or motivate. In other words it can be said that it is an adaptive leadership style. This
kind of strategy helps to encourage leaders to take stock of their team members, weigh the many
variables in their workplace and choose the leadership style that suits their goals and
circumstances.
Situational leadership is the situation which could be adopted by the manager or leader by their
choice because -
 Develop employees and workplace.
 Establish empathy and to bring out the best in their people.
 Use a common leadership style among all people in the organization, either it should be
local, national, or international.
For example: Communication – In this, leaders are communicate with others for make them
understand about what required to do in specific situation. Leaders executed approach which are
focus on such skills that are necessary for an individual to attaining this task.
4

Adapt – Leaders act as per the demand and requirement of situation in this. Mainly,
leader determine and adopt specific leadership approach which suitable best to attain final goals
and objectives.
Advantages :
It is very simple technique due to which leader adopt it very easily in
the business.
Due to situation leadership relationship between mangers and the employee
get develop which help in enhancing the business performance.
Disadvantages :
It focus more on the immediate needs and wants due to which long term
goals and objective are ignored.
System leaderships
Systems leadership defined the leaders in an organization to create the conditions where
people at all levels can work productively within their all potential. It counted in sound principles
about human behavior to create models of good leadership, organizational strategy, system
designs and social process(Hoyos Morales,2015). This is all helps to predict people's behavior
inside an organization. It also helps to Improve effective system which led productive behavior
and lead a effectively in the organization purpose.
Basically there would be 3 leadership capabilities which should be followed to improve are -
 The first one will be ability to see the larger system. This is why they build the capacity
to do system draw and other system practices into work strategy.
 The second capability comprises fostering reflection and more generative conversations.
With the goal of creating more attractive ' learning infrastructure' they embedded into
their business cycles key activities such as portfolio reviews and after action reviews. In
this way they they create a space for teams to indulge with systematic reflection.
 The third capabilities defines on shifting the collective focus from reactive problem
solving to co – creating the future. For example – ALDI has been doing the work in
fostering and co creating with others, the impact of investing movements that is
developing new ways to direct significant capital to investments that create social good.
5

For example - This leadership help in motivating and encouraging its employees to think in
different manner to conduct particular task. This will assist in improving development and
growth of the firm as it assess in imparting vision at leaders in staff members.
Contingency
A contingency is a is a potential negative event that may occur in the future. This kind of
event is unexpected as they came up with various reason like economic recession, natural
disaster, fraudulent, activity, or a terrorist attack. Contingencies can be made by keeping this
unexpected events. But some times this negative events came unknowingly. So, ALDI manager
often attempt to identify and plan for any contingencies that they feel with any significant similar
using predictive models. Common ways of dealing with this kind of contingencies are
purchasing insurance polices like property insurance(Akhavan, 2013).
Advantages:
A planned contingency minimize loss and damage caused by an un predicted , negative
event. For example a big firm have a backup power generator to ensure that trades can be
executed in the event of a power failure, preventing possible financial loss. And so a contingency
plans reduces the risk of a public relations disaster.
Strength
In this type theory has survived over the decades as a accurate and reliable approach like how to
achieve the effective leadership because it is grounded in empirical research. Where as it has
broadened the scoop of leadership understanding from a focus on a single and best type of
leadership to emphasizing the importance of leaders style and the demands of different
situations.
Disadvantages
There will major limitations of contingency approach are Inadequate literature, complex,
difficult empirical testing and reactive not proactive.
Task 2
1
Operation management
Operation management is an area of management which is concerned which responsible
of designing and controlling the process of production and redesigning business operations in the
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production goods or services. It includes the liability of ensuring that business operations are
efficient in terms of using a few resources as needed and effective in terms of meeting to
customer requirements.
JIT
The just in time inventory system is a management strategy that align of raw material
orders from suppliers directly with the production schedule(Tabatabaei, 2015). Sainsbury uses
this inventory strategy to enhance the efficiency and decrease the waste by receiving goods
which can only as they need them for the production processes, which reduces inventory costs.
This methods required producers to forecast demand accurately. It focuses on the efficiency
highlight the identification and exact production obstacles. Probably indicators of an
organization's use JIT methods in high inventory turnover ratios and high asset turnover ratios.
Low inventory balances indicates of an organization accounting methods has minimal
impact(Linderman, 2011) .
Total quality management
Total quality management indicates a management approach for a long duration success
through customer satisfaction. In total quality management effort all employees of an
organization collects together for improving processes, products, services, and the environment
where they work.
The 8 principals of total quality management are -
 Customer
 Total employee involvement
 Process – centred
 Integrated system
 Strategic and systematic approach
 Continual improvement
 Fact – based decision making
 Communications
Kaizan
It is a company culture where everyone regularly evaluates their work and thinks
different ways to improve it. kaizan is referred as a continuous effort by each and every
employee ( from ceo to field staff) to ensure improvements of all processes and systems, of a
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particular organizations. It means continuous improvement of processes and functions of an
organizations through variations. It keeps process at continuous improvements of processes not
only in manufacturing sector but also in the other departments.
The different ways to improve are -
 They pick a specific area for improvement.
 Identify opportunities for improvement.
 Prioritize actions.
 Set a timeline.
 Measure progress like how much you did and how much left.
Where as marketing can be classified into 3 principals -
 Right message should be about the exact content. Right audience simplified about the buyers person. Realistic: Operational management always understands that employees are valuable
assets to an organization. Managers in these situations are more realistic because they
know how and why to motivate individuals in an organization(Ivanov et.al.,2017). Quality focused: Operations management focus more on quality rather than quantity.
They always looks for efficiency of employees by motivating them for doing work in an
efficient manner.
 Rapid reactive: Operations management have capacity to react rapidly in times of
emergency. For example, Sainsbury's have enough capable managers who can take
immediate actions as and when required.
Basic functions of retail managers is that they are engaged for management of personnels
and resources, managing funds, setting up of sales goals and then communicate that properly to
their employees so that goals and objectives can be achieved.
These above characteristics of retail managers are connected to operations management
of Sainsbury because retail managers performs functions like promotion, maintaining store
operations, etc. of which operations management also do the same.
2
Operations management: This team comprises of various members in which all of them
are working to maintain daily routine activities in an organization. Main motive of operation
8

management is to reduce and eliminate wastes associated with production activity so that costs
can be reduced to company(Ramanathan, 2011).
In all this process, managers and leaders of organizations play important roles so that
activities and functions can be synchronized in order to get work done properly. For instance,
Sainsbury's is however doing business in area of supermarkets and so there is high degree need
to control, organize, co-ordinate and plan activities so that they can satisfy more customers as
possible. Following points show importance of role of managers and leaders in Sainsbury
company:
Importance of Role of managers:
 Managers in companies like Sainsbury are supposed to make forecasts about company's
earnings, profitability, employee efficiency, etc. and have to make plans according to
forecasts. This will enable organizations to maintain regularity in operations and
efficiency of employees(Kato et.al.,2012).
 They have to gather resources like manpower, raw materials and then organize them so
that judicious use of them can be made as and when required. Organizing of resources
implies to structure, integrate, co-ordinate tasks in order to attain objectives. For example,
Sainsbury is one of big companies in chain of supermarkets and their managers are
responsible for gather at one place and organize them.
 Managers are at top level and they have many people working under them. So to get
work done properly by employees, managers have to give instructions to them about
plans and policies framed and what are methodologies to be followed. This function is
commanding in which Sainsbury have to command their subordinates in order to get
work done by employees as per requirements and directions. Last but not least, managers performs role of controlling by checking that current
workings are going according to plans and if not take immediate actions to prevent errors.
For example, Sainsbury is a big company which cannot take risk of errors and so they
proper check performances.
Importance of Role of Leaders:
 Leaders in an organization are there to lead subordinates by influencing and motivating
them so that employees can work to their fullest. For example, leaders in Sainsbury's are
9

there to lead and direct their followers so that company can reach to effectiveness and
efficiency.
 Importance of role that leaders play in an organization is that they can build up trust
relationships between them and subordinates(Peng Lai, 2012).
 Leadership process needs a high degree of creativity because tendency of employees are
too much different. Leaders need to adopt new and creative ways to motivate them. Like,
there are so many employees in Sainsbury and to handle them leaders have to use
creative ways to motivate them and get work completed by them.
 Leaders in an organization understand psychology of their employees like issues can
come between them regarding work or tasks. For instance, Sainsbury is very big
company in area of chain of supermarkets and possibility is higher for conflicts. There
leaders play important role in resolving their conflicts and hence establishing harmony
among them.
Essence of this above discussion is that operations management is very important and
valuable in achieving objectives of Sainsbury's. Roles of managers and leaders are different for
the company but both are there to achieve goals and objectives efficiently and effectively.
Operations management focuses on aligning operations with objectives of Sainsbury's and hence
help company to reach where it want to go. They designate roles and responsibilities according
to departments, supervisors and subordinates. Hence, operations management helps Sainsbury's
company to become largest company in supermarket areas.
3
Business is surrounded by environment which is called business environment. It can be of
internal and external environment. Whole business environment is get affected by internal or
external factors, directly or indirectly. Larger impact is of external factors. Big companies like
Sainsbury have greater impact of external factors because they affect company in direct manner.
Impacts of external factors over environment of Sainsbury can be defined by PEST analysis:
Political instability :
These factors indicates the interference of government in the business. Government
policies and strategies plays an very important role in the activities of the business such as . tax
rates, fiscal policy, labour law, etc. All the above factors influence business environment of
Sainsbury to a great extent because government can make change in the UK government policy
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than the manager and the leader of Sainsbury have to make changes in their operations and
decision which they was taken earlier in respect to the business activities. If the government
bring any changes in the environment policy regarding the pollution than the Sainsbury have to
care that they does not create any pollution in the environment such as usage of polythene, waste
material from the store should be avoided. If the government make any policy regarding the
ingredients of the product than business and its authorities have to adopt it. There are many rules
prevailing the healthy material in the products it will help the business to attract large number of
customers(Schroeder, 2012).
Customer preference : In today's time customer tastes and preferences is changing very
rapidly. Sainsbury need to make changes according to the customer in order to sustain in the
external society. Managers and leaders of Sainsbury company will have change their decisions
according to expected behaviours and tastes of their customers if they want to survive for a
longer period in the external environment. If the respective business not change than they have to
face large amount of loss. This can also be converted into positive impact as Sainsbury will
update their plans and policies according to new market trends which will help them to remain
different from their competitor and to attract large number of customer. In the society only those
business able to sustain which work according to the customer whether their need is beneficial
fro the business or not.
Advancement in technology : In present scenario technology is changing very rapidly
day by day. If the business does not make changes according to technology than they leave far
behind from their competitors. These change in technology create positive and negative impact
on the organisation. Technology can create a negative impact on the Sainsbury as it is not
possible to make changes every time in their working. Changes in technology raises cost to
company in-spite of presence of this situation manager and leader of Sainsbury have to make
changes in their decision related to old technology because their competitor is adopting same. It
can also create a positive impact on the organisation as the leader and manager by the help of
new way of producing commodities means automation in industries able to increase the
commodity and decrease the overall cost of the product(Subramanian, 2014).
Inflation : In phase of inflation, managers and leader have to make changes in their
decision related to price of the product as they need to increase their price because they are also
paying higher prices for buying the commodity from suppliers. This will leave impact on the
11

operation of the business as there is a decrease in loyalty of customers which result in the
downfall of the profitability.
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CONCLUSION
From the above discussion, this can be concluded that operations management is very
crucial for big companies because they combine and gather all resources, money and time
together and make judicious use of them, so that they can contribute to their fullest. This report is
focusing on Fayol principles by which it get to know that all factors are very important to know
importance of role of managers and leaders of Sainsbury. Furthermore, this study throws light on
different theories of leadership and approaches of operations management. Later on, different
approaches of operations management has been described on the basis of which functions of
retail managers can be determined.
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