Abstract
This report highlights and analyses the operations and management done by ASDA in order to achieve high-level customer satisfaction and the competitive edge. The following aspects of service operation management and how they are used by ASDA will be analyzed through the report.
These aspects are as follows:
- Service Operations Concept
- The 5 Competitive Objectives
- Quality
- Supply Chain Management
- Capacity Management
- Corporate Social Responsibility
Introduction
ASDA is a subordinate of Wal-Mart, supermarket chains operating in the UK. ASDA supermarket retails food, drinks, clothes and other wide-ranging products. ASDA is the second largest retailer in the UK with over 150,000 employees. They also offer their customers the opportunity to shop online. The operations done by ASDA to increase customer satisfaction will be analyzed through this report.
Service Operation Concept
The service operation concept takes into consideration the importance of customer’s satisfaction. Through design and innovation, the service operation concepts seeks to model the services in an institution to the needs of the customer. The application of the resources of the institution should embody the choice of activities that lead to satisfied customers. Customer satisfaction is important in customer retention and return business, hence the importance of this concept. This notwithstanding, this concept also ensures that the employees delivering the services are empowered, not only through training but also an enabling work environment (Bamford & Forrester, s2010).
Operation management in ASDA is divided into three parts which are as follows: Stores, Warehouses and Transport. Operation managers in the stores are in charge of maintaining the optimum levels of stock in the stores in order to improve availability for the customer. Also customer satisfaction is crucially important. Therefore an intense training programme is applied in ASDA in order to maintain employees with the right skills to treat the customers. Every first employee is taken into 4 week training and assigned with a “training buddy.” Also meetings with the Line manager are arranged for the employees to discuss their jobs. This gives ASDA the chance to improve employee wellbeing which has a positive effect on the customer satisfaction. (Your Asda, 2014)[Online]
ASDA also offers an alternative to university called ASDA Skills Academy. They offer Retail Apprenticeships and a Higher Professional Diploma in Retail Management. The ASDA skills academy is useful for both ASDA and the employee. The employee gets the chance to be trained and educated whilst earning money. At the same time ASDA gets an employee with higher skills than a random employee which is trained for the exact needs of ASDA.
The duties of the operation manager at the warehouse involve making sure stock levels match supply and demand. Analyzing the job and the performance amongst with innovations to improve the performance is an important part of the job. Also cost control is done by the operation manager at the warehouse. Transporting is an important part of operations management. Managers in ASDA are in charge of the transport of the products 24/7 making deliveries up to 65 stores. Managers are also in charge of maintaining service to the stores and controlling costs. (Asda.jobs, 2014) [Online]
The Five Competitive Objectives
Quality is considered as one of the important aspect of an organization to get the competitive edge. As the paper talks up the other elements envisaged by the organization, it is important to ensure that the quality of their product and service is high. Quality of products and services not only ensures customer retention, but also attracts other customers. Quality is the element that separates businesses, hence giving one a competitive advantage over another. Organizations that want to out-compete others in the market, particularly focus on the quality of not only their products and services, but also their systems (Evans, 2014).
ASDA stores pay great attention to quality. For example, in order to increase quality, ASDA Stores try to keep a close relationship with the farmers. Monitoring chicken and cattle welfare has led ASDA to maintain their customers with high quality products. ASDA has been awarded by RSPCA Good Business Awards with their animal welfare project. Also ASDA tries to find new innovative “greener” solutions to packaging. ASDA`s recent success was with their own brand of toothpaste. They remove the outer packaging and adapted the tube to stand up. This innovative solution allowed ASDA to reduce waste reduction by %50 and won ASDA the 2010 UK packaging award.
The quality of the products is checked by operation managers to provide the customers with higher quality products. Also the décor of the stores are arranged according to the needs of the customer in a functional way to provide them an easy shopping experience. The stores are always kept clean, however it is observed that ASDA stores are not always tidy. Deliveries of the new products are done during the day, which blocks the pathway for the customer.
ASDA stores are designed to provide the customer with an easy and most importantly fast shopping. Self-scan checkout desks are placed in order to avoid queues which also reduce the employee cost for the store. Product availability is an important issue in a supermarket. Operation managers are in charge of maintaining the optimum levels of stock in the stores in order to improve availability for the customer. Also arranging the shelves according to the customers need is done by the project managers in ASDA. Speed is also important for the sake of the ASDA store. Increasing the shopping speed of a customer will lead to an increase in customer flow, which returns in profit for the store. ASDA also provides free buses to the stores for their customers.
ASDA stores are set to open and close on specific time tables. Employees arrive to the store earlier in order to prepare the products and get the store ready for the customers. Every store has to be in the perfect condition from the minute it opens until the minute it close. Operation managers in ASDA try to maintain the least amount of out of stock products from the shelves. ASDA stores have different types of depots that hold large volumes of stocks. As listed before, operation managers are in charge of transportation of the products as well as product variety. A wide range of new products in the store will allow them to be more flexible which will give them the competitive edge.
ASDA stores are willing to pay back their customers if the prices are not at least %10 lower than their groceries. They are aiming to get more customers with low prices. However, this doesn’t mean that they have to lower their quality. ASDA stores use technology in order to reduce costs. Self-scan checkout desks allow ASDA to reduce their employee cost whilst providing a faster shopping for the customer.
Supply Chain Management
Supply chain management is an important aspect whilst maintaining a high-level customer satisfaction and competitive advantage. The concept of supply chain management mainly focuses on two important aspects. Firstly, it focuses on overseeing the cumulative effort of different organizations in delivering the product from a manufacturer to the prospective customer. Secondly, it also focuses on the management of the flow of products in order to ensure that the process is not ineffective and disjointed. In this way, supply chain management helps to ensure that an organization sustainably maintains its competitive advantage by maximizing the value of its consumers.
Organizations nowadays do not just distribute their products and procure raw materials. They are involved in sourcing, product development, logistics, production and also the information systems required for supply chain management (Harrison, Lee & Neale, 2005). ASDA stores are committed to work with local suppliers in order to provide customers with fresh products whilst maintaining a good CSR policy. ASDA`s wide range of local supplies contains award winning regional meats, local delicacies, cheeses, yoghurts, sausages, pickles, ice cream, cakes and beer. ASDA stores have been awarded by the Motor Transport Awards in the category Transport Efficiency in 2011. Also ASDA was awarded Supply Chain Innovation Award in 2011 by Chartered Institute of Logistics and Transport (UK) Annual Awards for Excellence.
Logistics are also a part of the supply chain management. Time management is a very important part of the logistics. ASDA`s drivers are working day and night in order to make deliveries to stores all around the country. Even though ASDA has many vehicles around the country, they paid great amount of attention to their vehicles in order to reduce their carbon dioxide emission. They chose more efficient vehicles like double-deck trailers and longer trucks in order to lower the number of vehicles they have to use. Using an efficient and a lower number of vehicles benefits ASDA as well as maintaining a good CSR at the same time.
Capacity Management
All organizations have certain limits past which they cannot perform sustainably. Capacity management is concerned with these limits among other things. Capacity management is also concerned with other limits of the organization, including the labor force, technology, raw materials, office and manufacturing space, inventory and equipment. Capacity management is important in an organization because it outlines what an organization is capable of doing in a given situation. Such information is important in case any improvements in the systems are required (Correll & Herbert, 2007). From capacity management, baseline information on the ability of an organization is available. This element helps identify the bottlenecks in the organization, thereby ensuring that the operations run efficiently and smoothly (Yu-Lee, 2002).
Capacity management plays an important role while maintaining high level customer satisfaction. The capacity of the store should always have enough products to fulfil the demand of the customer. (Greasley, A, 2008) ASDA delivery trucks and operation managers are conducting a disciplined operation in order to deliver the products to the stores just in time for the customers. Capacity management also plays part in information technologies. (IT) ASDA stores have enabled online shopping to their customers enabling them to order the products that they want and delivered to their homes.
Corporate Social Responsibility
Despite the looming questions about the methodologies used to rank organizations on the performance of their corporate social responsibility, the fact is that these rankings generate considerable publicity, whether negative or positive. In the contemporary society, organizations are being increasingly held accountable for the social consequences emanating from their operations (Núñez & United Nations, 2008). Corporate social responsibility has been ineffective, despite the massive investments. This is because businesses are pitted against the society. This is erroneous, especially because the two are inevitably interdependent (Demmerling, 2014). Secondly, the current systems force organization to act in generic ways towards corporate social responsibility rather than in ways that best suit their corporate or business level strategies (Porter &. Kramer, 2006).
Corporate Social Responsibility is considered as a necessary cost of business which gives the organization a distinctive position in the market. (Slack et al, 2010) Therefore, ASDA stores pay a great amount of attention to maintain a good policy for their corporate social responsibility. ASDA stores have a common approach between all of the organizations of the Wal-Mart group called “Sustainability 360”. It is called “360”, because according to ASDA, their approach covers every aspect of their business. ASDA stores listed three key points as their operational goals. These are as follows:
- Using 100% renewable energy
(Your Asda, 2014)
As listed before, ASDA prefers on supplying their products from local suppliers. ASDA store lists the example of Dianne Halliday in their sustainability report. “We work with people like Dianne Halliday, who, with her husband Tony, runs the Dalefoot Farm in Mallerstang, near Kirkby Stephen. To increase the farm’s income Dianne started a small “production line” bakery from the farmhouse kitchen. Her produce was so successful she has just completed her third expansion, converting another traditional stone barn to double the size of the bakery.
Dianne’s 10-strong team is made up of nearby farmers’ wives and daughters. Her prize-winning cakes are made with locally sourced ingredients using tried and tested recipes, which she inherited from her grandmother. We love the mouth-watering tiffin, gingerbread and butter scotch shortbread!” ASDA stores also care about Fair-trade and organic products. According to the Fairtrade Foundation regulations and rules, products accredited with the organization`s logo makes sure that the products are up to their standard.
Growing of organic products restricts using non-organic fertilizers and pesticides. Organic product growth is healthier for the customers and the environment. ASDA stores work with the Soil Association in order to increase the amount of organic products for their customers as well as protecting the surrounding environment. Also ASDA stores operations on animal welfare have been recognized by the RSPCA Good Business Awards.
ASDA stores believe in supporting and helping to make a difference in the local community. Therefore, they set up the ASDA Foundation, their charitable company to support local good causes chosen by their colleagues, and is funded by profits from the mid-week national lottery. According to the official website, ASDA has made donations of £1,900,000 towards various causes across the UK such as sports clubs and schools. ASDA believes this is a way of giving back to the local community.
Conclusion
ASDA stores have been running a successful operation in the UK. They are the second biggest food retailer at the moment. Being one of the biggest retailers in the country is a proof of their success to maintain high level customer satisfaction and the competitive edge in the market. Their aim of providing high quality products for low prices has helped them acquire a big part of the market.
Even though ASDA runs a successful operation, improvements can always be made. Providing a clean and tidy store is an important aspect to be looked at whilst analyzing competitive objectives. However, ASDA could be more careful with being tidy in terms of delivering and organizing the shelves in the store in order to avoid customer disruption. Also, it has been stated that ASDA has donated over £1.9 to the communities with the help of ASDA Foundation. However, when we look at their revenue at the end of the year, the amount of their donations could be criticized.
References
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