International Logistics: M&S Operations, ERP, Sustainability Report

This report provides a comprehensive analysis of Marks and Spencer's (M&S) operations management, focusing on logistics, ERP systems, and sustainability. It begins with an overview of M&S, its global presence, and recent transformations, including store closures and shifts in product focus. The report then delves into the core concepts of operations management and logistics, highlighting the challenges M&S faces, such as managing suppliers, volatile product lifecycles, and rising costs. The Four V's of operations management (Volume, Variety, Variation, and Visibility) are applied to assess M&S's performance. The report examines M&S's use of ERP systems, comparing the current SAP system with the potential benefits and drawbacks of Microsoft Dynamics 365, including cost considerations and data management capabilities. Furthermore, the report explores the importance of ethics and sustainability in the fashion industry, discussing how M&S can enhance its performance by implementing effective sustainability strategies. The report draws on academic research and provides practical examples to illustrate key concepts, offering valuable insights into M&S's operations and potential areas for improvement.

Logistics and Operations Management

Contents
Contents...........................................................................................................................................2
Four V’s of Operation management.......................................................................................4
ERP system.............................................................................................................................5
Ethics and Sustainability........................................................................................................7
Big Data..................................................................................................................................8
Procurement..........................................................................................................................10
Conclusion............................................................................................................................11
REFERENCES..............................................................................................................................12

OVERVIEW
Marks and Spencer is one of the largest multinational retail chain in the world and deals in
various products and services like clothing, toys, fast food, home products etc. M&S headquarter
is in Westminster, London and have been serving in more than 1400 store locations with the
revenue of 10,377 million Euro and employees more than 80,000 people worldwide (Scott and
Walker, 2017). Company has been going into transformation as management or board of
directors are planning to cut 100 stores worldwide with the aim of reducing operations cost thus
improving profitability to a certain level. After removal of St. Michael brand from its brand
name, company has seen downfall or lower customer footfalls in their clothing section. But on
the other hand, their food sales has been increasing due to increase in variety available to
customers.
Operation management refers to a process of managing overall supply chain of a company with
the aim of decreasing operations cost and increasing profit margin for a product. In other terms,
monitoring of transformation of raw materials in to final products and then consumed by final
customers by considering reduction in cost price without compromising in quality of a product.
Logistics is the brand of operation management which deals in transportation of products to
customer as well as within working premises (Adhikari, Biswas and Avittathur, 2019). Main role
of logistics is to eliminate those steps which are not adding any value added services in the final
product and reduce processing time of a product so that less human resource and machinery will
be used thus improving overall efficiency of working operations.
According to Cole, Stevenson and Aitken, (2019) there are various problems which are faced by
logistics due to which whole company gets affected from it in a negative way. Like managing
supplier is a complex task as if more suppliers are in contact with the company then distances
travelled to get the raw materials also becomes high thus poorer efficiency. For instance, if M&S
has three different suppliers, one from Westminster and other two from Nottingham and Bristol
respectively. Then M&S will be benefited in terms of financial number if raw materials are
coming from Westminster but when it outsourced from Nottingham then overall efficiency
becomes lower due to increase in distance.
In past era, cloths product life cycle was considered longer as shift from one trend to another
takes time as said by (Templar and et al., 2017). But due to increase in competitors and change in
customer buying process, product life has become lower which are hampering efficiency of retail

chains like Marks and Spencer. Moreover, company needs to procure low inventory in the
starting for a new product as customer thought process is very volatile and changing in nature.
But Fixed cost which incurs for buying the product in low or high inventory will be same thus
more transformation cost is paid by company just to sustain in the market for longer period of
time. Other problems are increase commercial property prices for stores, skilful labour,
maintaining staff productivity with limited salary, flow of product due to poor supply chain
management, rising consumer expectations and competitors etc.
Four V’s of Operation management
It is known in the market that if any retail chains want to get success in the market then they have
to mould their strategy and working operations according to customer expectations and external
environment as negative impact can be seen if their requirements are unsatisfied or ignore by
company as stated by (al Habibi, 2019). To maintain it, company needs to identify their internal
and external performance and how it could be improved in the future for the betterment of
company. So Marks and Spencer must analyse their performance with the help of 4 V’s of
preparations which are explained below with functional example of M&S.
Volume: Volume refers to number of customers served by company in a limited period time or
per day. For instance, if Marks and Spencer is able to satisfy the customer they are serving
worldwide then their volume efficiency is higher and vice versa. But on the other hand, quality
of the product must be considered while serving customers as if they are not attain marginal
utility from the product customers have paid then low customer retention rate would be seen by
company. So quality must not be compromised by M&S while catering the needs and demands
of potential customers.
Variety: It refers to number of variety company has in their store to serve their customers. For
instance, if company has more than one product or has variety of product in their stores then it
becomes easier for customers to purchase their product accordingly. Moreover, chances of
increase in sales are also high as customer has wide number of choices to select to satisfy their
needs. M&S has been able to fulfil this category of operation as they are fully stocked with
products like home product, clothing, and foods etc which assist them to increase their
profitability over a period of time (Bek and Lim, 2018).
Variation: According to SDSD, if there is more than one variation available in the store for
customers then there are high chances that customer will end up buying more than what they

need to satisfy their demand or requirements. Variation means different number of products
available within single product category. For instance, Marks and Spencer must maintain their
stock of shirts, jeans, foods and other product in different colours, sizes, price, quality etc so that
customer would decide their product according to their ability to pay and other factors like taste,
preferences etc. By this way, M&S would be able to serve more customers in the current market
so that more productivity and profitability would be achieved by them.
Visibility: If there are more stores of a single company in the market then probability of getting
a favourable result from it is also brighter as it assists customers to buy their products without
doing any efforts. M&S has more than 1400 stores worldwide which reflects the number of
customers they have served till now and how much they would be serve in the future.
ERP system
M&S is a giant firm whose multiple numbers of employees works together for executing their
daily activities. The work of these employees requires communication from several departments
due to which it becomes crucial for the company to keep them in contact with each other. ERP
system refers to the integrated management of different daily operations and operations in an
organisation on a real time basis. These ERP systems are very effective in enhancing the growth
rate and sustainability of an organisation as the policies can be implemented effectively with the
consent of employees. For this, M&S is implementing new technologies so that the employees
can communicate with each other in an effective manner. The company is currently using Sap
ERP system in their daily business operations (Sullivan and Gouldson, 2016).
According to Derek DuPreez (2013), Marks & Spencer is using the SAP business suite in
their business operations. This technology will be implemented for managing the stock in real
time. Stock management is very essential for a firm in order to reduce the wastage and loss of
business. With this SAP system, the company is estimating increase in sales. Through real time
stock management, company wants to show their customers regarding the availability of
products across the stores. However maintaining this business suite is proving very costly for the
company as the cloud charge and maintenance charges are high. This is reducing the funds of
company and its profit is declining (M&S testing ‘operational resilience’ of SAP, 2013). The
company needs to think of another system for maintaining and managing their workforce as well
as customers.

According to David Reid, Microsoft dynamics is best customer relationship management
software which is used by businesses in this modern decade. This is effective software for
maintaining different operations and functions of a business organisation. Through this CRM
software, Different types of functions and processes can be monitored and managed by the
administration in real time due to which business efficiencies can be enhanced by bringing
effective and enhanced results. This software is a flexible solution for the businesses as it offers
cloud services as well as modern user experience which are developed for enhancing the
productivity and reach of the firms in their respective market. This business suite comes in
different segments in which different types of services are provided by the Microsoft
Corporation such as Employee management, service order management, expense management,
project management and many more (Microsoft Dynamics features, 2013). This tool is very
technologically updated than the SAP system which is currently used by the Marks & Spencer.
SAP is used by the Marks and Spencer for maintaining and managing their stocks. Whereas the
Microsoft Dynamics business suite provides a wide range of resource planning tools through
which daily functions of the business can be executed in an effective manner (Fayezi and et al.,
2019).
Marks and Spencer can use the Microsoft Dynamics 365 business suite for enhancing
their customer and employee retention rate. Through this system, the company can design
effective marketing and sales campaigns for covering the different segments of their huge
customer base. This tool provides a refresh and process-driven user interface which streamline
the lead qualification process in order to successfully covert the leads to the user account. M&S
can also easily manage their sales and purchase records in order to effectively manage the costs
of warehousing, post sales transactions, inventory etc. The company can also easily manage their
workforce through this business suite as it helps in managing and organising the background
information of the employees. This business suite can help the Marks and Spencer in enhancing
the efficiencies of their business functions. Through this tool, the company can manage different
functions and departments on a real time basis so that the policies and plans can be implemented
easily for generating better and improved insights for the businesses.
According to Ryan Plourde (2016), the Microsoft dynamics business suite also has
several drawbacks which can be proved dangerous for the business in terms of enhanced
expenses. This business suite also comes with limited data storage and additional storage is

provided at additional charges. Also the administrator does not have direct access to the database
which can proved time consuming while implementing or planning an important decision
(Limitations of Microsoft Dynamics, 2016).
Ethics and Sustainability
According to the Chloe Mac Donnell (2019), Sustainability in the fashion industry is an essential
aspect for global organisation such as M&S as it leads management to gain top position in
market. But according to the present market conditions it is complex for all companies to
understand the fashion market in proper manner because it is too dynamic and broad. This means
there are large number of products are offered by fashion organisation due to which it is easy to
perform their work in proper manner. This governs that customer’s world is changing fast so it is
mandatory to implement effective sustainability strategy and framework that is used to develop
better leadership in future (Jones and Comfort, 2017).
From the perspective of Andrew Beattie (2016), sustainability for fashion industry can be more
effective for each organisation that enhances performance of organisation in effective manner.
Social pillar is the best approach which is implemented to perform their work in proper manner.
Sustainable business and framework will be developed by organisation to perform the work in
effective manner (Sustainability at M&S, 2019). The sustainability approach to perform their
works is to secure and maintain better results that lead management to gain fair results from
business operations. It results that with sustainable operations it is easy for management to gain
better results for gaining better results locally as well as globally. ‘
On the other side, businesses which are performing their work at international scale must
perform their work according to international standards and policies. Further, with the better
sustainable structure it is easy for organisation to get several benefits such as employment
retention, long term strategy; flexible scheduling etc. due to which all projects will be done in
proper manner (MCKINNON, 2018).
 Positive factor- In the present scenario multi-national organisation performs various
tasks so with the social sustainability structure it is easy for management to gain better
results. Due to which long term benefits is achieved by completing project in appropriate
manner.

 Negative factor- Sustainability is one of the most complex factor for fashion industry
because it is complex to understand the changing needs of customers. This also governs
that it is costly for organisation to understand market and environment.
According to the Charlotte Brown (2018), ethics is one of the most important parts for
organisation that is used to gain long term benefits from business operations of the organisation.
It also governs that by following ethics it is easy for management to enhance their goodwill in
market. This is easy for organisation to perform their work and direct the action and activities of
management towards goals and objective of organisation (Ethics at M&S, 2018). Moreover, in
context of M&S it is mandatory for all workforce and departments to perform their work as per
environment needs (Miller, 2016). Plan A is followed by management which is used to gain
complete term benefits by achieving organisational goal as per social and environmental issue.
To implement ethics in all operations and functions of fashion industry it is essential for
management to complete the task in proper manner. The UK clothes are used to perform the
work as per retail shops that enhance the performance with implement of high retail shops. Like,
ethical consumer and other stakeholders help management to perform their work as per
environmental issue it leads to gain better sustainability in organisation (Cullinane and et al.,
2019).
 Positive factor- With the detailed information related with ethics it is easy for
management to complete the work as per environment and consumer needs. It results this
is easy for organisation to perform their work by adding more value in products.
 Negative factor- Fashion industry is increasing with rapid speed this determines large
number of stores is opened to satisfy needs of customers. But most of them is impacted
on business because of ineffective ethical rules and implementation in their stores.
Big Data
Big data refers to the method of analysing large data sets of past and present in order to
determine the trends and patterns. Big data is very useful for the business firms in this
technologically advanced era in order to stay ahead of the competition. Retail or Fashion
industries needs to specially focus on big data for making better decisions and strategies of the
company. Through the big data, retail and fashion companies like Marks and Spencer can
determine the patterns and trends among the habit and choices of customers so that better
products can be provided to them according to the trends (Massoudi, 2018).

According to Carly Yuk (2016), M&S is offering large number of products to customers
such as retail products, fashion products, home care and many more. Big data is an essential
phase that is used to make better structured results by using the past data. This is mandatory for
organisation to perform the work by considering all work and its aspects on traditional basis and
software techniques. The main motive to implement big data is to gain better results that are used
to attract more number of customers by monitoring needs of customers on regular basis.
Moreover, with the better understanding of big data it is also easy for M&S to identify and
generate better recommendations for upcoming period of time (M&S implement the big data,
2016). Fashion and retail industry aim to satisfy need of customers with motive of collecting data
through utilising digital task for performing their work to identify customers and their shopping
habits. Various retail giants like Walmart, Tesco etc. are using the big data analytics for
enhancing their business sustainability as well as growth at the global level. In order to analyse
the Big data, Marks and Spencer can use the Microsoft dynamics business suite which is very
essential for businesses in maintaining the data of the firm as well as of the customers. Through
this software, the company can analyse the large chunk of customer data for providing them an
enhanced user experience. The company can develop and implement the strategies and plans
based on the patterns so that effective results can be achieved. By determining the patterns,
companies can easily attract their customers towards the products. Through the big data,
companies can determine the approx. location of the customers so that attractive offers can be
provided to them when they are nearby a store. The big data has proved very beneficial for the
retail industry in attracting and retaining the customers due to which such companies are
enjoying the favouritism from the customers (Angeles, 2016). The business firms can also
develop new shopping trends through which better sales can be generated. The companies can
optimise their prices, products, etc. by analysing the social media followers and trends. The
companies can also provide recommendations to the customers during the shopping based on
their previous history and data. However there are several drawbacks also associated with the big
data such as safety of information, theft of identity etc. which can impact the customers as well
as the reputation of the businesses. Hackers might steal the data as the data is saved on cloud
platform. This data can be used or sold to anyone who can misuse the information for their own
deeds. The chances of loss of data also remain in the cloud storages which can negatively impact
the business operations as well as image of the companies (Fan and Stevenson, 2018).

Procurement
According to Bryant and Thimmaiah, 2018, Procurement refers to a process of buying raw
materials or final products from suppliers so that it would assist company to run their business
operations smoothly and effectively. There is a minor difference between procurement and
purchasing of materials as latter one only includes buying materials from vendors. But
procurement is a whole process which includes supply chain, logistics, transportation etc.
There are three different objectives of procurement in Marks and Spencer i.e., to monitor the
market and analyse factors which could affect company’s performance in a negative way. For
instance, if M&S analyse that oil price is likely to get increased in the future then they will try to
procuring materials in a bulk so that increase in oil price won’t affect company’s performance in
the market. Other objective is to support company in their strategic management so that it
becomes easier for them to sustain and compete in the market for linger period of time. For
instance, if M&S analyses that reverse logistics of product is incurring high amount of money to
company then it must be stop or modified according to external environment. So by this means,
procurement process helps company to manage their strategy according to external environment
which includes competitors and global market as well (Barone, 2016). Last and primary
objective is to reduce inventory and material handling cost so that overall profitability of a
company would increase as these are the main factors which decreases earning of company and
their stakeholders. To reduce these unwanted costs, Marks and Spencer could use Just in Time
technique in their working operations (Abdeen and Sandanayake, 2018).
According to Fernie and Grant, 2019, Just in Time is a technique of procuring raw
materials when it is needed the most so that bulk ordering would be stop which incurs wastage of
money. For instance, as per the sales prediction, M&S requires minimum 1000 pair of jeans in
the month of December to fully satisfy their customer needs then company will order those in
last week of November or prior to that so that order will be delivered before it is needed. By this
means, inventory cost for the company reduces as they does not have to store stock from months
with the aim of satisfying demand of customers. Moreover, for inventory, space and human
resources requires handling and managing it so no or fewer inventories leads to less material
handling cost thus more profitability for M&S. Other benefit of JIT technique is better
understanding of customer needs and preferences with the aim of attaining higher customer
retention rate. In the above example, if inventory or stocks are ordered before 5-6 months and

then social trends changes then it would be no use of procuring old or past trends as customers
prefers to buy latest cloths instead of buying older one. So ordering in November will assist
M&S to understand their customers so that procurement of materials will be done accordingly.
Other secondary advantages of using JIT are favourable image in the market due to increase in
profitability and efficiency of company, marketing opportunity to attract customer by providing
those product categories which are not available in the market and with competitors (FERNIE,
2018). But while implementing JIT, there are many problems which are faced by company like
unavailability of product in shorter time. For instance, if M&S has ordered their raw material to
supplier but due to less time given for procuring, supplier or vendor is not able to provide
material on time then this will have a negative impact on company’s goodwill due to
unavailability of product. Customer does not prefer to visit those retail stores where they cannot
satisfy their needs due to unavailability. In other circumstances, company needs to procure the
same raw material in high price from other supplier thus decreasing profit margin (Gupta and
Gentry, 2018).
Conclusion
So from the above literature review, it can be concluded that company needs to analyse
their external environment to bring changes in the organisation if they want to sustain in the
market for longer period of time by maintaining their position. It can be achieved with the help
of assessment of environment on a regular basis and then try to make the strategy accordingly.
Organisation can improve their performance with the help of Big data as mentioned above.
Analysing and monitoring customer buying behaviour would assist them to identify their needs
and preference over a period of time and then try to personalise their shopping experience so that
they would be retain for longer time. Besides this, usage of ERP would help them to maintain
their supply chain and logistics network simultaneously so that company’s performance won’t
get hampered at all.

REFERENCES
Books and Journals
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Flows and Relationships. Procedia Manufacturing, 17, pp.1104-1111.
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chain management. In Green Business: Concepts, Methodologies, Tools, and Applications (pp.
1489-1508). IGI Global.
al Habibi, B., 2019. HR practices of Marks & Spencer, Selfridges, Primark, and Sainsbury’s
(Doctoral dissertation, University of Science & Technology).
Angeles, R., 2016. Marks & Spencer’s RFID Initiative: Laying the Foundation for Omnichannel
Retailing. In Digitally Supported Innovation (pp. 193-206). Springer, Cham.
Barone, A., 2016. Managing Global Logistics for Business Growth: A guide for small to medium
enterprises pursuing the global market growth through cross-border trade (export/import).
Buoyant Capital.
Bek, D. and Lim, M., 2018. The circular economy: A key approach for addressing strategic
business challenges in supply chains. Social Business, 8(1), pp.95-102.
Bryant, J. and Thimmaiah, A., 2018. Corporate carbon footprints: evaluating climate
responsibility of six corporations. Adv Plants Agric Res, 8(6), pp.363-370.
Cole, R., Stevenson, M. and Aitken, J., 2019. Blockchain technology: implications for operations
and supply chain management. Supply Chain Management: An International Journal, 24(4),
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Cullinane, S., Browne, M., Karlsson, E. and Wang, Y., 2019. Retail Clothing Returns: A Review
of Key Issues. In Contemporary Operations and Logistics (pp. 301-322). Palgrave Macmillan,
Cham.
Fan, Y. and Stevenson, M., 2018. A review of supply chain risk management: definition, theory,
and research agenda. International Journal of Physical Distribution & Logistics Management,
48(3), pp.205-230.
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