Life would be much easier if the entire world would stand still, but of course it doesn't. As the world evolves, so must the disciplines whose mission includes helping managers deal with it? Operations Management is not any exception. Operations Management is the function of managing the operating core of your organisation: the activities associated with creation, production, distribution and delivery of the organization's goods and services. (HAYES, R. ) The businesses function comprises a substantial percentage of the employees and physical assets in most organizations. Operations managers are worried with each part of providing a service or product. They determine what is going into an operating system such as equipment, labor, tools, facilities, materials, energy, and information and how these inputs can best be obtained and used to satisfy certain requirements of the market place. Managers are also accountable for critical activities such as quality management and control, capacity planning, materials management, purchasing, and scheduling. (Russell, Roberta S. and Bernard W. Taylor III, 2000) This essay is going to discuss about the relationship between strategy and procedure management and further explaining about how the capability, location, TQM, flexibility and process can add value to the delivery of goods and services.
There are many definitions put forward for the business enterprise processes. Business processes can be explained as structured measured set of activities designed to create a specified output for a particular customer or market (Davenport 1993, P 5). "Rosemann (2001, P 18) defines business processes as self-contained, temporal and logical order (parallel and/or serial) of these activities, that are executed for the transformation of your business object with an objective of accomplishing a given task". Business processes is a collection of interrelated work tasks, initiated in response to a meeting that achieve a particular result for the customer of the process (Portugal and Sundaram, 2005). Processes available under taken to achieve particular task that for example producing a particular goods or service for the client. The effect must be countable and identifiable. "The business enterprise processes is a couple of evidently identifiable tasks, executed by a number of actors (person, or organisation, or machine, or department (Portugal and Sundaram, 2005). The business enterprise processes helps us to recognize various tasks involved with delivering results by the organisation. Business process may be generic or particular to given industry or organisation. Processes are the methods used to convert recycleables and components into products (Hall, 2004). Processes may include, designing, cutting, bending, soldering and polishing. These types of processes are mainly performed using machines and tools
Business today is defined in a worldwide environment. This global environment is forcing companies, regardless with their location or primary market base, to consider the rest of the world in their competitive strategy analysis. Firms cannot ignore external factors such as financial trends, competitive situations or technology innovation in other countries if a few of their opponents are competing or are located in these countries. Nowadays, it is uncommon for a firm to develop a fresh product in america, manufacture it in Asia and sell it in Europe. (Gourdin, 2006 P 140)
Argos offers its customers with wide range of products at reasonable prices so thatmore and more folks are able them. Argos is the main retailer for toys and small electric appliances, and a leading player in a great many other markets including D. I. Y, gardening, consumer electronics and furniture. Argos also have a significant market share in jewellery, sports equipment, D. I. Y products and furniture and it is popular organisation with approximately 60 employees in each branch
Argos is successfully doing so, as its branches have gone up from 500 stores into 800 stores before year. Argos aims to offer best service to its costumers. They hope their costumers gain maximum choice in their shopping, and also have maximum usage of Argos. Offering Internet shopping as a choice does this. Another of their objective is to expand enough and be market leader with a good reputation.
They have something where you can phone up and reserve your chosen item and find out if they own it in stock, you can also find what day they will be setting it up in the store. Argos is to grow capacity and improve customer service in Argos direct, the delivery to home operation. Sales via Argos grew by 50% in comparison to last year. It accounted for 16% of Argos sales - up from 12% last year. Preparation for the construction of new Argos direct warehouse has started, with completion planned prior to the end of the current financial year.
They serve over 130 million customers a year though their stores and take 26% of sales through the internet channel alone and 4 million customer orders either online or higher the phone. On average'18 million UK households or around two thirds of the population, have Argos catalogue at home at any time. They plan to open approximately 20 stores this financial year.
OPERATIONS STRATEGY
Operations strategy is related to matching the characteristics of the operations function with certain requirements of the marketplace in order to handle the needs of the business enterprise. A proper knowledge of this technique requires not merely a knowledge of the beliefs and methods used to build up an procedures strategy but also understanding of the techniques and principles involved in its implementation. Implementation requires understanding of procedures systems and polices including the ones that relate with resource planning and activity control, quality, plant management, motivation and organization of people, performance metrics and continuous improvement.
The decision taken within a company's procedure strategy are considered strategic because they are widespread in their effect and are also significant in the part of the organization to which the strategy refers and define the positioning of the organization relative to its environment.
Components of the Operations Strategy
Structural decision categories:
Capacity
· Growth as needed through additional stores - but capacity added carefully
· Well-utilized - franchisee's well-being depends upon it being used heavily
Facilities
· Distributed facilities, each facility being very similar to the next, all focused around the same menu - although uniformity is starting to change
Vertical integration
· Partnership arrangement
· Long-term relationship with suppliers to market innovation and quality improvement
Technology
· High degree of process understanding, emphasis on "fool-proof" processes
· A leader in the technology of product keeping fresh
Infrastructural
decision categories:
Workforce Organization
· Franchisees: well-trained, carefully selected, entrepreneurs
· Operators: high-turnover, cheap
· Guidelines provided by corporation
· Shareholders
· shareholders
Information/control systems
· Centralized buying
Competitive priorities:
Cost
· pricing is extremely competitive
· Turnover is now over 4 billion and pre-tax margins are still amidst the best in the industry
Quality
High-performance design
· origins of store sites and the city and locality where the store was built and exactly how they integrated this into the overall structural design of the website.
Development speed
· a leader in retail management information systems.
Flexibility
· Argos didn't regard their stores as one stop shops, although with over 27, 000 lines in every store they were approaching it
Customization
· It's been estimated that over 50, 000 stores strolleys go astray yearly in the UK.
Argos is rolling out a unique businesses strategy which many have tried to check out. The business's motto is: ""We offer the best customer support through the easiest shopping experience "The main element elements of the Argos businesses strategy include design, store layout, distribution network, market segmentation. Argos's strategy achieves differentiation and cost leadership. The differentiation is the grade of the design stylish, modern and well-presented in the store and on the site.
Argos strives in offering the very best quality products for this customers, at a price up to 30% cheaper than any other UK retailer. Home delivery service and Argos additions (clothes) has improved getting customers into the store and spending their money. The home delivery service has grown for Argos from TV's being delivered to a whole delivery network and Argos Direct warehouse's setup thought out the united kingdom. You can get delivery to any were in the united kingdom free on items over 100 pound.
OPERATION COMPETIVE DIMENSION
There are seven major competitive dimensions that form the competitive position of a company, these are as follow:
cost or price,
quality,
delivery speed,
delivery reliability,
coping with changes popular,
flexibility
new product introduction speed, and
other product-specific criteria.
A strategic position is not sustainable unless there are compromises with other positions. Trade-offs occurs when activities are incompatible so that more of one thing necessitates less of another. Order winners and order qualifiers describe marketing-oriented dimensions that are keys to competitive success. Order winners will be the standards that differentiate the products and services of 1 firm from another, while order qualifiers are the criteria that let the businesses products to be looked at as candidates for sale by customers.
CAPASITY PLANNING
Capacity planning is the process of determining the production capacity needed by a business to meet changing demands for its products. Within the context of capacity planning, "capacity" is the utmost amount of work that an organization is with the capacity of completing in a given period of time. A discrepancy between the capacity of an organization and the demands of its customers results in an inefficiency, either in under-utilized resources or unfulfilled customers. The goal of capacity planning is to minimize this discrepancy. Demand for an organization's capacity varies based on changes in production output, such as increasing or decreasing the production level of an existing product, or producing new products. Capacity can be increased through introducing new techniques, equipment and materials, increasing the number of employees or machines, increasing the amount of shifts, or acquiring additional production facilities. By definition, design capacity is the utmost output that can possibly be attained (Stevenson 1999).
Many organizations operate at below their maximum processing capacity, either because there is insufficient demand completely to fill their capacity or as a deliberate policy so that the procedure can respond quickly to every new order. It is frequently that organizations find themselves with some parts of their procedure operating below their capacity while other areas are in their capacity ceiling. It is the parts of the operation that are operating at their capacity ceiling which will be the capacity constraint for whole operation. For instance a retail super store offers present wrap service which at normal times can handle all requests for its services. (Slack, Chambers&Johnston1995 P 322)
Argos has selected the Retek supply chain planning solution to boost to capacity and sales while reducing total inventory levels in 2003. With sales of over GBP 3 billion, multi-channel giant Argos was named UK's Retailer of the Year in 2003. With Retek AIP, Argos will optimize its supply chain through improved planning of stock getting into the warehouse and then out to the stores. With supply chain they may take more stock out and achieve better stock turns and improve their buying processes.
Argos also uses Merchandise Planner because of its twelve-monthly sales and stock planning process, as well as for planning its catalogue and promotional activities. The perfect solution is, which has been developed for retailers, helps companies plan their product assortments, pricing and store an allocation which sets targets over the retailer's different seasons. Argos also plans by range for each and every week during the period of a year's sales and stock. That data flows through to fulfilments planning, making certain Argos does not exceed the available capacity. Argos is also following the 21st century brand concepts and products suitable.
The important characteristic of capacity planning and control, even as are discussing it here, is that it is worried about setting capacity levels in the medium and short terms in aggregated terms. That's making overall, broad capacity decisions, however, not concerned with every one of the details of the average person products and the services offered. This is what aggregated means different products and services are bundled together in order to obtain a broad view of demand and capacity.
LOCATION
Location is a key factor for each and every business including Argos and many aspects of a location must be analysed before it could be chosen. This includes the competition in the region, the reputation and the populace of the region. The major factors affecting location decisions are;
· Labour
· Premise costs
· Financial assist and municipality charges
· Transport links
· Near Customers
· History and tradition
· Sales techniques
· Business activity
· Number and location of competitors
· Reliance on personal visits by customers
· Reliance on local supplies
· Reliance on specialised labour skills
· Methods used to get hold of customers
Finding an excellent location is a decision that requires a lot of reconsideration and investigation particularly as Argos is undoubtedly an enormous company with such big stores. Firstly all Argos stores require a huge area for the stores, as they will be accommodating such a huge variety of products. Secondly they will desire a huge car park space for his or her customers, as the store can have a huge selection of customers at any given time as well as providing disabled parking and family car parks. In addition they need a substantial area for a warehouse to stock their goods as well as loading bays where they receive their deliveries of stock.
TOTAL QUALITY MANAGEMENT
In today's globalized market, with interdependent economies of scale and cross-cultural product initiatives, businesses make an effort to maintain their profit margins and market shares by giving the perfect products and services with their customers. "Profit is the applause you get for taking care of your customers and making a motivating environment for your people" (Blanchard, 2007, p. 4). According to John Stark Associates, total quality management (TQM) is a management strategy used today in business, manufacturing, education, government, and the service industries to maximize efficiencies in every organizational processes (John Stark Associates, 1998). Although organizations differ in their operational definitions of TQM, common threads exist which span the breadth of business and private enterprise. Ponzi and Koenig describe total quality as the culture, attitude, and organization of the company that aims to provide, and continue steadily to provide, its customers with products and services that meet their needs. Within their definition, the organizational culture requires quality in all respects of the business's operations, with things done right first-time, and defects and waste eradicated from businesses (Ponzi & Koenig, 2002).
TQM can be an "integrated management system for creating and implementing a continuing improvement process". Such process will lead to producing results that exceed customer expectations. TQM places the tasks related to quality problems with upper management levels rather than on the workers. The aim of TQM is to truly have a continuous improvement in the processes. TQM achieves its objective through data collection and analysis, flow charts, cause and effect diagrams, and other tools which are being used to comprehend and improve processes of any organization.
Customers entering an Argos for the very first time know immediately that something differs. You must choose your item from catalogue, order and pay to cash till. The different thing is you don't need to wait too much time and if indeed they don't possess that item you can examine another Argos stores.
Argos has a Matrix structure. People within the organisation mix with employees from other departments this means there exists little possibility of departments becoming very defensive about their territories. This creates a comfortable workforce, that may lead to motivated employees who'll achieve their finest efforts to make a satisfying service to costumers. When costumers gain the service they aim to, they will shop more regularly in Argos, which will lead to Argos expanding and more popular.
The management style found in Argos stores is consultative. The manager of the store will seek other employees within the company for advice prior to making decisions. This implies the employees become involved more sharing their new ideas and past experiences. This will help Argos ensure that they are simply pleasing their costumers by using a variety of ideas they share. Costumer satisfaction implies the likeliness of the costumer to shop at Argos. If they are satisfied, which is associated with using a consultative management style, and they would shop more often at Argos. More costumers cause a higher profit. Argos management sees its role as assisting in this value-creation process, not only by "scripting" the customer's new role but also by rendering it easier for the customer to assume the role. Catalogue and in-store assistants carefully detail the assembly process and free car-top racks can be found at every Argos location. As a result, customer receives a level of quality that in unavailable elsewhere
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FLEXIBILITY
Flexibility is a characteristic of a firm's process that permits them to react to customers' needs quickly and efficiently. Some processes require one or more of the following types of flexibility: customization, variety and volume flexibility.
A idea of strategic versatility in product competition is developed in which flexibility depends jointly on ;
-The resource overall flexibility of the product creation resources available to a company and
-The coordination versatility of the firm in using its available resources in product markets.
Strategic flexibility, then, is the ability of the firm to preach or respond quickly to changing competitive conditions and thereby develop and/or maintain competitive advantage. The others of this work explains the actions that individually or in mixture help firms to accomplish strategic versatility and competitive advantage. There are a variety of actions that help businesses navigate in the new competitive landscape. In specific, these actions directly or indirectly contribute to the achievement of strategic versatility and competitive advantage. Among those is exercising strategic leadership which includes direct effects on a firm's strategic versatility and competitive advantage. Strategic leadership also impacts these outcomes indirectly through the other major actions of
- Developing dynamic core competences
- Focusing and building human capital
- Effectively using new technology
- Engaging in valuable strategies
- Building new organization structures and culture.
CONCLUSION
In conclusion, the procedure and strategic management is the procedure of developing plans, policies and allocating resources to achieve organizational objectives. So in reality operation management is combining the many activities of business to accomplish organizational objectives. So that it can be said that it is the highest level of managerial activity. In this case it is understood that, Argos had several problems in managing their operational and strategic management, but later they overcame it by realizing the value of operational management in a business. Now Argos is one of the successful companies on earth in managing their operational management. To be able to continue this success the company needs the right people and best tools available to ensure a seamless transition and has to be in a position to resolve any problems as fast as possible, especially when it is the world's leading home furnishing retailer
