This report has been prepared regarding the operations of Argos and argos.com and it will look at their operational processes and also with discussed in details the theory of capacity planning, inventory management, supply chain management, performance measurements and total quality management and will look at the chosen organizations with relation to above mention theories.
Operational management is the process of effectively managing resources and converting them into final goods and services to offer to the customers, the process of operational include all the management of all the resources which are used in the manufacturing of goods and services to used them effectively for the better result and achievement of goals for the organization.
In this assignment the operational management processes of two organizations Argos and Amazon.com will be look into with details and they efficiency regarding the operations will be discuss to see how they manage their operations to provide better goods and services to the customers.
Argos is one of the U.K leading retailer and it provide customers different goods, the company was establish in 1973 and now it is part of Home Retail Group, which is UK’s leading home and general merchandise retailer. Argos, has nationwide network of over 670 stores coupled with its many ways to shop via catalogue, online and in store allows customers to mix and match from the full range of selection, order, pickup and delivery. The Argos retail experience is also made more convenient with home delivery, the innovative ‘check and reserve’ and ‘text and take home’ services, and the in-store Quick Pay kiosks, enabling consumers to make the best use of their free time. According to an HPI tracking study running from January to March 2006, 96% of customers would recommend Argos to a friend. Moreover some research agencies has issued interesting figures about retail sector businesses like Argos, Tesco and Asda.
According to new Nielsen Online figures, Argos held its number two ranking above Tesco and below Amazon, with a 32% year-on-year growth in the number of UK visitors to 8.2m (homeretailgroup.com)
Argos has supply chain management system which is very effective it provide the services through its catalogue system which allows the user to check the item without visiting the store and finding the best product their looking for and booking it online and collecting it either from the store or by home delivery.
Argos also has a very effective distribution channels which enable them to have outlets on different locations so the customers can visit the stores and select the items from either looking at the catalogue or at their online system and making the payment on the system and just collect the items they want to purchase which reduces the time which usually customers have to face in order to buy the item because of this effective management of the Argos supply chain and distribution channels the users can get their items less than the time which they will take in other stores which is one of the reason of Argos success.
Amazon.com:-
Amazon was first establish as a book selling website in 1995 but diversify itself to selling other items such as DVDs, appliances, video games and other electronic goods it also provide the users and option to download some of its item instead of waiting to received it on mail.
Amazon.com work on the basis of e-commerce providing its customers different facilities to use for their shopping and it’s simply a website for online shopping and provides latest items to different customers according to their needs.
The features provide by amazon.com are:
Reviews By Customers:-
Amazon.com provide the customers to review any item they have bought from the website and rank it on the scale from 1 to 5 stars and also discuss what they think about the product this feature enables the other buyers understand the product help them make their decision regarding the product. The view are check by amazon.com to avoid any false information provided by the users and amazon.com like to post both good and bad reviews about the item for the convenient of their customers and to make them understand about each aspect of the product.
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Content Search:-
This is one of the most useful tool provide by amazon.com for its users, the content search tool allow the customers to search for a specific word or content in a book. This feature has been design for customers who wants to buy books regarding specific information this tool enable them to find out what books have the information required by them and show them a photo of the page from the book and sometime give a free preview of the book to its customers to help them decide whether it is the book or information they were looking for it not.
Third Party Sellers:-
Amazon.com also helps in selling product from third parties on their website by listing them at amazon.com and directs the customers to other sellers product according to their desired information needed.
Amazon.con use a centralized payment system for all its users whether sellers or buyers and control and monitor it.
Just like Argos the company Amazon.com also has a very effective supply chain management system which enables them to deliver the products desired by the customers on time, with their content search feature the customers get the chance to select their products. They also have an effective distribution system usually the customers who order from amazon.com get their delivery within 2 to 4 days which make the whole process of shopping very enjoyable for the customers.
By using the principle of operational management both the companies Argos and Amazon.com have been proving the customer best service and which is one of the reason of the success of both companies that their users prefer to shop from them and also recommend them to their friends and family, the principle use by Argos and Amazon.com are the basic principle of operational management and if used correctly can result in success for any organization in the long run.
Part B
Capacity Planning:-
Capacity planning is the process of determining the amount of work that an organization can do in any given time it is basically determines the capacity of the organization to meet the demands in the market which is always changing due to change in customer taste or in technology.
Capacity planning is the crucial part of any organization operational management which determine the capacity of the firm to meet the demands of customers in the market as it will provide the organization the competitive advantage and better utilization of the resources of the organization.
Capacity planning is part of the strategic planning of the organization and it provides them a guide to utilize the resources with full capacity and managing the organization resources effectively and making the organization a success.
Inventory Management:-
Inventory management system was already used in America and Japan it is the most important part of any organization’s operation as organization need to maintain a sufficient level of inventory not only helps in the production processes but also it helps in meeting the demands of the market as the manufacturer needs to have sufficient level of stock to supply to the market.
Maintaining sufficient level of stock whether raw material or finished products to supply to the market involve many costs such as maintaining cost, ordering costs and carrying cost handling these costs is also a part of a better inventory management system as it is the responsibility of the operations management to handle this processes they need to be sufficient enough to manage the processes of inventory handling efficiently. There are many inventory management systems available to help the management in this processes some of the famous systems are Economic Order Quantity and Just In Time inventory management which enables the managers to use the inventory effectively in the operations.
A example of inventory management systems can be seen in the Sainsbury’s operations where they focus on the maintaining the inventory in the stores through computerized systems and whenever a item short on inventory the system automatically place the order for the new one and which arrive before the item ran out of stock that’s been a major part of Sainsbury’s success.
Supply Chain Management:-
Supply chain management consist of managing the supplies of the organization efficiently to maintain the level of organization products and services, it not only consist of managing the suppliers but also consist of monitoring and controlling the activities associate with the production of the products and their effective management the process consist of many activities which are:
Procurement.
Customer service management.
Physical distribution.
Product development.
With these activities an organization creates chain of values and add values in them for the customers and in the product as well which is why these are one of the important activities in the operational management process.
An example can be seen in the case of Toyota where the company understands the importance of these activities and provide the customers with products with added value through not only their manufacturing processes but also through their distribution and customer relationship process also this is one of the reason that the company Toyota has grown over the years and its customers preferred to buy its car because they believe that they get value for money.
Performance Measurement:-
Performance measurement is the process which enables the organization to set the measurements to determine where they are in terms of goals and their achievement it gives the organization an overview of their current position and where they want to be in the future. It is a great way to control and measure the activities of any given department by measuring the actual performances to the target it gives them an idea about their performances and what improvements they need to make.
Many organizations used this model in their employee appraisal as well to reward the employees who have achieved the tasks to motivate them also to identify the employees who are behind the tasks to ask them the reasons behind it and if there any help they need in order to achieve the tasks.
The application of performance measurement is used at every level of the organization as it is a used for tool for the organization it helps them where they, How they will improve and such questions are answer through performance measurements therefore it is a useful tool.
The example of companies using performances management can be seen in Sainsbury’s where the company not only measures the performances of its employees but also the performance of its store by sending mystery shoppers to the store and checking the budget performances of the stores and also doing performance appraisal for the employees as well.
Total Quality Management:-
Total quality management is a programme use by many firms to gain competitive advantages by providing the customers with best quality products and increasing their satisfaction, it is a philosophy of management which emphasis on continuous improvement in the quality of the product.
The process of total quality management involves involve everyone working in an organization as it is believe that every one working is the organization is responsible for the continuous improvement of the product and services and it should not be consider the activity of only one department.
In application of quality management can be seen in the case of sports direct where every employee working in the organization strives to provide best quality services to their customers not in terms of products but also in customers services which result in many customers preferring sports direct over the other sports shop, once a customer enter into the outlet of sports direct they get the feeling of somewhere really sports related from shelving to staff working there the sports fan get this feeling when they are shopping at sports direct because of their total quality control management and which result in many customers buying their sports related stuff from the company because they trust the name and the quality of sports direct which is because sports direct never disappointed them when they come to shop over there.
Part C
In this part of the assignment the application discuss above will be relate to the organizations or Argos and Amazon.com to see how these applications helps these companies to achieved their goals and objective and what competitive advantages the company are having due to each module and how they develop the companies strategies over the years.
Argos:-
The first organization that will be look in detail regarding the above mention theories will be Argos as it is the believe of many that these theories are working fine with Argos and they will be look one by one with operations of Argos.
Capacity Planning at Argos:-
As it has already been discuss how proper capacity planning helps an organization in its operations and proper planning of resources to achieve the goals set by the management.
Being one of the biggest retailer of U.K Argos understand the importance of capacity planning and plan all its operations based on the proper planning of its resources as many customers can get the information about the product they want to buy from Argos website that where they will be available and if not available at one store where else they can find the item and how much quantities left to collect which enables the customers to know about the product and how much time they will have to wait to get their hand on the product.
Due to this properly planning of capacity Argos has been having competitive advantage over its competitors and it also helps them in their marketing strategy by distributing their catalogue to the customers for free and providing the idea of items they can collect from the outlets of Argos.
Inventory Management:-
Inventory management has been one of the strong points of Argos operations as Argos has to hold many items in their inventory to meet the demands of customers they been keen on providing the products by different manufacturers to the customers.
One of the unique features which is provided by Argos is that it provide the customers information about the products and their availability by providing them information is the item available for home delivery or if the item out of stock in one store which other store they can collect the item and it also provide them the option to reserved the item on their website if the item left has not much quantity so by reserving the item on the website the customers make sure that the item will not be sell by the time they reach they store and they can collect is because of this method of maintaining inventory the operational capacity of Argos can be seen and understand properly.
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Supply Chain Management:-
Argos has many outlets all over U.K and supply the items to all the stores is not an easy job and Argos realized that but they overcome this problem but having a good chain of distribution channels and also by providing information about the product and its availability and also make sure that the customers will get their desired product on time and without having to wait much for the product, the distribution channel consist of both the supplies for stores and also for home deliveries as well to manage effective system of deliveries.
Performance Measurements.
The use performance evaluation techniques have been an integral part of any organization and Argos is no difference in fact using performance measurement has been a part of Argos success and it gave them an idea how the company is performing not only with the products but also with the customer satisfaction which make them realised the areas they need to make improvements and the areas where they are working fine can improve even more to provide better services to the customers.
Total Quality Management:-
Just like other features the total management concept has been also used by Argos under this principle the Argos staff has been trained to make them understand the role they play in the success of Argos and what they can do to improve the services at Argos even more.
Argos not only emphasis on improving the quality of the services offer by the staff but also make sure that the products offers by Argos are of great quality and value to the customers as they know that making the customers happy is the most thing to do if a business wants to survive.
Amazon.com:-
Same like Argos the company Amazon.com also employed the principles discusses in part b of this assignment and will be look one by one.
Capacity Planning:-
Millions of customers visit amazon.com daily and do their shopping form the website due to which it is very important for the website amazon.com to provide their customers the best items they has to offer and keeping this thing in mind the company use their resources very well in term of proper capacity planning this can be seen by looking at the growing number of people who log in to amazon.com to buy the stuff they need with confidence and amazon.com has been delivering stuff from books to health equipment to all sort of customers and making them happy which is the reason they achieved the competitive advantage.
Inventory Management:-
Amazon.com has storage facilities all over the world and due to which the company is able to deliver anything anywhere in the world and due to having storage facilities all over the world the delivery cost is less for some countries.
They have an effective system of managing the inventories which are far more than any other company as the website provide many options to the customers and their customers are in millions they know how important it is for them to utilized their inventory management to provide the customer the products they need on time and with less delays.
Supply Chain Management:-
Being provider of many products and having millions of customers supply chain management its one of the biggest issue for amazon.com and the company knows its importance that is why they manage their supplies very carefully to make sure that the products ordered by the customers reach them on time and without any delays due to which the company gain popularity.
Amazon.com has also introduced the service for their customers where they can also sell their items on amazon.com website to other customers for some fee chargeable by amazon.com for providing these services but the company make sure that whatever the item is presented for sale by other customers of amazon.com should meet the quality standards of amazon.com and provide their other customers the products which give them value for money because when a customer visits amazon.com they visit with the expectation that they will get good deals from amazon.com than any other supplies of the goods and it provide amazon.com not only the competitive advantage over the competitors but also it helps them market their name all over the world due to the services they offer to their customers.
Performance Measurement:-
For the purpose performance management amazon.com always ask its customers for feedbacks about the services provided by amazon.com and also it provide them a review system in each item where the buyers of that item post their reviews about the experience they had with the product and does it meet with their requirement so the other customers can see and decide whether they should buy the product or not amazon.com not only publish the good reviews but also the bad reviews of the website and products and try to improve the areas where they have been criticized by the customers to provide them best quality services.
Total Quality Management:-
The quality of the product and services offer by amazon.com is the main focus point of their business and they take it very seriously through conducting surveys and reviewing the reviews post by the customers to understand their weakness and overcome them.
As it been said before the company provide other users to sell their products on their website as well but they make sure that the product presented for sale meets the quality requirement of amazon.com and all the sellers are present with stars based on the feedback they get on their sales by doing this amazon.com make sure that the buyers get the best quality products from the sellers and also to make sure that the quality standards are maintain by amazon.com at all time, they also make sure that the staff at their customer service communicate with the customers positively and help them out in their queries to give a positive image of the company to the customers and by doing this the company has been able to increase its market share over the years.
Sources:-
Operation Management By Frank Rowbotham, Masoud Azhashemi, Les Galloway
Operation Management By C. Donald, J Waters, Donald Waters.
Service Management Improving Service by Robert Johnston and Graham Clark
Operations management policy, practice and performance improvement by Steve Brown, Kate Blackmon, Paul Cousins
www.argos.co.uk
www.amazon.com
www.thetimes100.co.uk
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