Global Operations Management Report: Farmfoods Business Analysis

This report provides a comprehensive analysis of Farmfoods' global operations management. It begins with an overview of Farmfoods, a British frozen food supermarket chain, examining its nature, size, and market position. The report then delves into the role of operations in running the business globally, covering key approaches such as Total Quality Management, Continuous Improvement, Just-in-Time inventory, Kaizen, and Six Sigma. It explores the importance of operations management in achieving business objectives, including control and distribution systems. The report highlights Farmfoods' mission, vision, and objectives, providing insights into its revenue, market ratio, and business culture. The analysis also covers the benefits of frozen foods and Farmfoods' expansion strategies. Overall, the report offers a detailed examination of Farmfoods' operational practices and potential areas for future development, offering valuable insights into its business model and strategies.

Global
Operations
Management

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1. Study the nature and size of the Farmfoods business. ...........................................................1
2. Investigate the role that operations played while running business globally. ........................4
3. Operation management methods.............................................................................................6
4. Potential Improvements that can be made in Future...............................................................1
CONCULSION................................................................................................................................3
REFERENCES................................................................................................................................4

INTRODUCTION
Global operation management can be termed as those business associates which serves
it's product and services across nation or worldwide. The transaction is done within and outside
the nation so that customers can be satisfied across the boundaries. It's main main is to use the
resources effectively and efficiently and turn them into finished goods as well as to timely
deliver the goods to the customers. It helps to create brand image in the eyes of the customers
and more loyal customers can be attracted towards the company. Farmfoods limited is a British
food supermarket based in Scotland. It has 300 stores across United Kingdom. It was founded by
Aberdeen in the year 1955 (Brondoni, 2015). It's products are groceries and frozen foods. The
website is www.farmfoods.co.uk. This report includes identification of size, sector and nature of
the Farmfoods organization. It also focus on role that operations play while running of the firm
in the global market. Whereas, examine the existing use of operations management methods and
evaluate other options available in the market so that business can survive for longer time
duration. Additionally, justify the alternate options for improvement which be done in coming
years.
TASK 1
1. Study the nature and size of the Farmfoods business.
Farmfoods Limited is a British frozen food supermarket chain based in Scotland,
Cumbernauld. It has expanded it's business throughout United Kingdom and there are 300 stores
available in the market. It gained entry into England in the year 1990 by the acquisition of
eighteen stores from Wallis Frozen Foods (Butler, 2016).
In the year 2011, Farmfoods had 300 specialist freezer centres across the united kingdom
as was able to meet the needs and demands of the people at a large scale. Although company is
providing frozen foods but in recent times it has developed a wide range of grocery items such
as, dried goods, confectionery, fresh fruits, Vegetables and drinks, cleaning products, chilled
items and canned goods. It is retail industry and is serving it's services across the nation to full-
fill customers needs. In the year 1975 Farmfoods completely changed it's focus from
manufacturer whole-sales on frozen food retail. But by the year 1988 it has expanded it business
to 31(thirty one) stores in Scotland. The stores of Farmfoods are basically located in towns and
1

cities but the focus is gradually changing in out of town facilities so that more expansion can be
done in the coming years.
Division: It is divided into three parts which are -a -22oC freezer, ambient storage area
and +4oC chiller (Cortez and Johnston, 2017).
Distribution area: The distribution centre is more than 17,000m2 in floor area.
Unique features in cold store: Supply warehouse with natural lights, ecofriendly cold
store will feature 15% ambient roof-light and one hour fireproof separation wall.
ISD solutions: It Provides employment to around 100 staff and family owned staff
employs 4000 staff and runs 30 shops who are offering services like, grocery items, daily use
products and value frozen products ( Nature,size of company,2018.).
Mission: The mission of the Farmfoods limited is to provide a wide range of frozen
speciality food products with high quality and also with reasonable price. So that very one can
easy purchaser it and use the products worldwide. It also focus on maintaining integrity, trust
across work operations, long term relationship with suppliers and building partnering
relationship with customers (Dereli, 2015).
Vision: Farmfoods vision is to become the Egypt's and Regions leading company of fresh
frozen products with best quality.
Philosophy: The products are hand-picked and are naturally harvested by passionate
framers. Then they are transported to the company where they are screened and fed into
production line. Later on packaged and stored in refrigerators so that they can remain fresh and
hygiene for long time duration.
Objective of the Company: The objective of the Framfoods is to support local farmers
to produce large quantity of electric products and promote them domestically and globally in the
middle east so that expansion of business can be done in the market.
Revenue: Farmfoods revenue is £852m in the year 2014 and it was raised to 18pc and
also pre tax profits was there with 38pc to £21m. It a positive sign for the organization in the
global market (Hastings and Stead, 2017) Nature,size of company,2018..
Sales and discounters: According to IGD Farmfoods sales and discounters is double in
the next five years and it raised to 82pc between April 2015 to April 2020 and discounters raised
in the market from 7.2 pc to 11.6pc. Which is a positive sign for the company in the global
2

market. It can be said that discounters account for almost £1 in every £9 that British shoppers
has spend on groceries in the business.
Market ratio: Farmfood hold 0.6pc of the grocery market worldwide. They are making
certain plans and strategies to increase the market ratio so, that future expansion can be done and
more revenue can be generated (Hooper, 2016.).
Culture of business: The whole Farmfood business and culture is focusing on bringing
the customers or consumers the effective and efficient value on their shopping so that they can be
made satisfied with the product.
Online delivery: Farmfoods is not serving it's product on online platforms. Customers
can visit nearby shops to full fill it's demand in the global market. There are 300+ store
throughout Great Britain.
Expansion of business: Framfoods from the last four years they have opened total 145
net new Iceland stores in United kingdom and is creating 4000 new jobs for the unemployed
people in the market. They are targeting to open 40 new shops in the current financial year so
that the set goals can be achieved. It will indirectly help the business to generate huge profits as
well as brand recognition can be done in the cut throat competitive world.
Framfoods specialism is frozen foods and strongly believe that frozen food is the best and
effective solutions for most of the family meals in UK. Some of the products like turkey, fish
vegetables, lamb, exclusive label chicken etc. are stored in clod store due to which there is less or
zero wastage bo9f food in the market (Kleppe and Mossberg, 2015).
Frozen foods benefits are as follows:
 A Framfoods Limited frozen chicken breast foods remain fresh for a month and can be
cooked in 45 minutes and there is no need to defrost the frozen food.
 When the food is breezed in the clod stores is does damage the food as it is natural
process there is no use of chemicals while freezing. So it is good for health and remains
fresh for months.
 It prevents wastage of food as people use how much they are needed and rest is kept
again in the freezer for the next meal.
3

2. Investigate the role that operations played while running business globally.
Business operations refers to as managing all the inner working activities involved in day
to day functions so, that business runs effectively and efficiently as possible and is able to
generate profits. To run the businesses operations smoothly in the cut throat competitive world it
requires certain things like, strategic planning, operations design, initiative execution and
business intelligence which helps the business to grow and flourish at international level (Knight,
2015). Here are key approaches to operate management and the role which are carried out by the
mangers are explained as follows:
Total quality management: Total quality management can be defined as overseeing all
the tasks and desired level of excellence which involves quality planning, quality improvement
and quality control so that customers can be satisfied with the product. Framfoods keeps the
food in cold stores so to maintain the quality of food is very important so, that they can preserve
for longer time duration. It is done in the business associates so that there is less or no wastage of
food in the market and optimum utilisation of resources can be done. Total quality management
is done to improve the quality of performance in all functions, processes and departments cross
the firm. It helps to provide quality products and services which exceeds customers expectations.
Continual Improvement: To survive in the competitive world improvement in the
product is important so that they can survive for longer time duration (Knight and Liesch, 2016).
Framfoods should use natural process to preserve food for longer time duration rather then
chemicals. Improvements in grocery items is also necessary to meet the daily needs of the
customers. It will indirectly help the organization to meet the set goals on time and generate
revenue at a large scale. Improvements in the product (grocery items) helps the firm to attract
customers and expansion of business can be done easily.
Just in time inventory: Just in time inventory is used by the Framfoods to increase
efficiency and decrease wastage of food by receiving foods as and when needed. When there is
lees or no wastage of food it helps to raise positive sign in the eyes of the customers. Just in time
inventory in operations management helps the firm in reducing the storage space as goods are
stored are stored at the time of their use. It also indirectly saves money of the business as there is
optimum utilization of resources.
Role of manager in Just in Time approach are:
 Order the quantity of goods to the suppliers at the right point of time.
4

 After evaluating the quantity of he goods available order is placed to avoid misuse.
 Maintain effective and health relations with the suppliers so that desired goods are
dispatch on right time (Kumar and Shah, 2015).
 Keep eye on the functioning of the mechanism on continuous basis so that cold stores
work smoothly
Kaizen or Continuous improvements: In this case when Kaizen or continuous
improvements are applied in the work place to improve every business functions so that
objectives can be achieved. By introducing Kaizen process in operations management business
associates can encourage the development of the team work so that best outcomes can be seen.
Farmfood uses this approach then grocery items business can be expanded more and more
customers can be attracted.
Role of manger in Kaizen approach are:
 It identify the scope of task in Feramfoods cold store and grocery stores.
 Measuring the success rate of the team.
Six Sigma: Six sigma approach is defined as an approach which is disciplined in nature
and data eliminating defects in any process ranging from manufacturing so that smooth
functioning can be done (Mishra and Modi, 2016). Framfoods will be benefited by this as it will
help the business associates to achieve maximum customer satisfaction, investments, achieve
employment growth and prevent defects in the manufacturing process.
Role of Six Sigma are:
 Supporting and recognizing employee participation.
 Giving review and support to the employees as well as to the top level managements.
 Driving six sigma projects.
 To deliver among employees the necessaries of six sigma approach in the working.
The importance of operations management in achieving business objectives are as follows:
Operation management includes designing, controlling the process of production and
redesigning the business operations in the production process of goods and services. It deals with
operations, improvements and design of the systems that creates an firms primary product
(Murphy and Harris, 2016). The importance are explained as follows:
Control and distribution systems: Control and distribution is very important in the
operation management as it is responsible in controlling the production process so that proper
5

distribution of goods can be done. This helps the firm top meet the set goals on time . The
efficiency of the distribution system can be improved by adopting efficient control system. It
helps to raise the logistic infrastructure of the organization by fulfilling the objectives of the
business associates.
Process design: The designing of the process helps the organization to meet the set goals
on time. It helps the business associates to gain more productivity by applying right process for
production. Framfoods use the process design in it's organization so that goals can be achieved
on time. As well as frozen foods and grocery items can be handled and maintained properly in
the long run (earce, 2016).
Logistics and inventory management: The logistics and inventory management is very
important from the organization because without proper logistics support finished goods can not
be transported to the global market. Which will indirectly decrease the demand of the product in
the market. Organization also focus on the inventory management to store the excess goods to
ensure that they get utilised effectively.
3. Operation management methods.
Operation management is the governance of business practices to create the highest level
of efficiency possible within an organisation. In this, the raw materials are converted into
finished products effectively and efficiently which maximises the profits for the organisation. It
is a branch which deals with managing operations and processes within an organisation. This is
the function of business which is responsible for creation of goods and services. Apart from this,
it also manages people, equipment, technology, information, etc. There are various methods of
operation management which will be followed by farm foods company and they are discussed
below :
Total quality management : It is the continuous and regular procedure of detecting and
minimising errors in manufacturing, streamlining supply chain management, maximising
customer experience and assures that employees are up to training (Ramanathan and Parrott,
2017). This is a customer oriented process and is concerned with assuring that all allied works
are towards the common goal of accomplishing business goals and objectives. It is an organized
conceptualization to the whole organisational management. The emphasis of this process is to
maximise the quality of an organisations output, that includes goods and services, by regular
improvement of internal practices.
6

A successful implementation of TQM requires a significant training for the employees
involved in it. It tends to result in a conformable ordering of incremental changes and can lead to
creating an unpleasant response from those employees who prefer existing system or employees
who are afraid of losing their jobs because of it. Total Quality Management works best in an
environment where there are strong support and commitment from the management. It measures
quality with the help of durability, reliability, usage, etc. Furthermore, this is divided in to four
different phases and they are :
 Plan phase : This phase is concerned with developing suitable plans for the employees
who have to face the queries and problems that is required to be addressed. They are
required to be come up with various challenges of every day operations and analyses the
main cause of the problem (Reid and Sanders,2015).
 Do : In this phase employees develop a solution for the problem which is identifies in the
planning phase. This devises the various strategies and implements the same to overcome
the challenges faced by the employees.
 Check : This phase is concerned where people actually do comparison analyses to
confirm the effectiveness of the processes and measures the results.
 Act : In act phase, the employees take the relevant plan of actions where employees
document the results and prepare themselves to address the problems.
Advantages Disadvantages
7

 TQM helps an organisation to cut down
costs through removal of waste, make
over etc. It maximises profitability and
competitiveness of the enterprise and
helps to modify the organisation’s
competitive edge, in the globalized
economy of today.
 By concentrating on customer
necessities, TQM makes for fabulous
customer satisfaction. This leads to
more and more sales, and excellent
relations with customers.
 Occurrence of TQM depends on the
connection between labour and
management because engagement of
people at all levels is a pre-requisite for
TQM programme implementation. In
many organisations, here and abroad,
labour management relations are quite
tense.
 It needs a lot of waiting time because of
several changes in processes, methods,
procedures, techniques, etc.
Alternatively, the Farm food company can use another operation management method
that is Six sigma and its is discussed below in detail.
Six sigma : It is a methodology and was introduced by Bill Smith which primarily
emphasises on eliminating defects in the business process. The designation or title, Six Sigma,
relates to the connection between the number of defects per million opportunities and the number
of standard deviations found within a process specification. With rising material cost and ever-
increasing competition, organizations must seek out methods to increase efficiency. By
implementing Six Sigma methodology, an organization can improve efficiency through
identification and resolution of product or part defects and minimize the variation within a
process. The principle of six sigma is used in the organisation so that they can minimise the
defect rate in the production line. Furthermore, a business can strategise its plan of action and
drive revenue increase, cost reduction and process improvements in all parts of the organization
This structure concentrates on continuous improvements and the primary aim of this is to
accomplish business goals and objectives which are set by an organisation in an efficient manner
by minimising cost and defect rate at minimal (Shi and Gao, 2016). This is a quality program
which improves customer experiences, minimises cost and builds better leaders. This has two
different methodologies and they are discussed below :
8

DMAIC : This strategy is used by the organisation when it aims to improve an existing
business process. It has five different phases namely, defining the system, measurement,
analysing, improvement, controlling.
DMADV : This strategy is used by the organisation when it aims to create new product
or process designs. This strategy is also concerned with five relevant phases and they are
defining the design goals, measure and identify, analyse, design and verification.
Advantages Disadvantages
 It focusses entirely on customers and is
a proactive approach.
 It addresses the entire process behind
the production of an item or
completion of a service, rather than
just the final outcome.
 They supply efficacious outcome for
the company. Through the Six Sigma
Process, management will have a solid
apprehension on the problems of their
organization and more importantly, be
able to solve these problems.
 It can create bureaucracy and rigidity
because the method covers all the
process of the company and this, in
turn, leads to delays and problems in
creativity.
 When six sigma is used by small
businesses then they faces the problem
of high cost because it is very
expensive to implement the process.
 It genuinely stresses on a strict and
inflexible process to precede and that
goes against the new trends that favour
creativity and innovation because the
innovative approach focuses on
redundancy.
9

4. Potential Improvements that can be made in Future
There are several methods of Operation Management that can be used by Farmfoods in
order to establish an effective operations chain in order to maximise the profits and capture the
more market share. As there are various methods that can be used in order to get the desire result,
but, it is important for Farmfoods to know the implications of these methods. There are several
improvements that can be made in respect to the operations performed by Farmfoods (Stauffer
and Van Wassenhove, 2016) . Some improvements in regards to methods are:
Total Quality Management:
It is a management framework that suggests that every individual in the organisation
needs to participate in the process of improving quality to maintain the high standards of an
organisation. Farmfoods follow this method of operation method as it helps them in establishing
better quality standards so that customers needs are satisfied. The managers and leaders of
Farmfoods believes that it is not only the role of top management to ensure high quality
standards but all the people related to company needs to implement it. To make the process
clearer and effective for all the employees related to Farmfoods , they established several
elements. These elements assures that the quality supplied by Farmfoods is unique. These
elements are:
Customers
Total Employee Involvement
Process Centred
Strategic and Systematic Approach
Continual Improvement
Fact Based Decision Making
Communication
 Customers: They are termed as the oxygen of any organisation. Every product created by
any company is ultimately ranked by the customers, so, it goes for customers as well.
Farmfoods believe that the customers are the people who can rank the quality of