Operations Management for Garden Gallery
Introduction
Working for Garden Gallery (a commercial shopping centre) for three years as a Strategic Communications Expert has allowed me the opportunity to interact with all the departments in the organization and to observe the mechanisms and the processes involved in the operations management system. Likewise, while developing the internal communication flux within departments of the organization or for various processes, I had the opportunity to observe and evaluate in – depth the operations performance measurement system used in the organization. Based on my evaluation I have identified that the operations performance measurement system (meant to generate operations performance improvement) currently employed in the organization has some points where interventions would be required for actually reaching operations performance improvement. Based on the identified weaknesses of the company’s current operations performance measurement system, in this essay I will indicate how the operations performance measurement system links to operations performance improvement, by recommending solutions meant to increase the organization’s capacity to optimize and get more efficiency for its measurement system.
Body
Performance measurement system represents a design used within organizations for establishing the level of performance needed for achieving the organizational objectives, through a set of measurable criteria, where efficiency and effectiveness are significant parts of the concept (Slack et al., 2009). However, because performance measurement system has been introduced in various disciplines, this definition suffers modifications depending on the segment of activity in which it is applied. As such, the operations performance management system segment requires a set of metrics for quantifying the efficiency and effectiveness of activities (Zeglat, AlRawbdeh, Madi & Shrafat, 2012, p. 440).
Other researchers sustain that a performance measurement system is relevant only when it is compared against set targets (Hyer & Wemmerlov, 2002, p. 250; Slack et al, 2009). According to vom Brocke and Rosemann (2010, p. 126), there are two approaches to how the performance measurement system should be utilised: (1) based on the generic performance indicators, which allow companies to consolidate their performance measurement system upon existing concepts and experiences; (2) based on the business objectives that the company set, making this approach more personal and specific to the company that applies it.
In Garden Gallery Company the operations performance measurement system is based on the second approach, on the business objectives. This organization sets its annual objectives from the beginning of the financial year and the core objectives are structured on hierarchical and departmental levels, so that each employee from each department knows what s/he has to accomplish for meeting the imposed objectives. For evaluating how the objectives are being followed there are half – yearly assessment programs, through which the employees respond to their superiors and the department managers gathers the results of his/her team and presents to the Chief Executive Officer and the Board of Managers for visualizing how each department has contributed so far to meeting the objectives set and how will they plan to continue to pursue their goals. Therefore, besides structuring the company’s objectives into departmental and hierarchical objectives, Garden Gallery organization does not offer any other indications on how to meet these objectives.
Regarding this point, Slack et al (2009) state that the organizational strategy is to be either restrictive and to specify how the performance objectives must be met, either open, and set little or no guidance on how the objectives should be achieved.
Although an open and flexible operations performance measurement system implies creativity, autonomy and responsibility, which are strategies to stimulate the employees, it can allow for miscommunications, misinterpretations and can generate confusions and even chaos, since there are no or limited guidelines to be followed. On the contrary, the restrictive performance objectives offer guidelines and procedures on how the objectives should be met, which consolidates an organized working environment and the unpredictable surprises are less likely to occur. However, this approach implies a high degree of control, limited (if any) autonomy and a rigorous working rhythm.
Now, should a company apply an open or a restrictive performance objective strategy depends very much on the profile of the company. Generally, for Garden Gallery shopping centre the open performance measurement system was a suited approach. Nevertheless, there are certain departments – such as financial and invoicing, retailing, legal or customer service that needed precise guidelines for reaching the imposed objectives. While for Marketing and Sales Department, Administrative or Operational the open approach on operations performance measurement system was fitted, the other departments required more control, because the operations involved in these departments are generally more strict and rigorous, imposing a higher control and limited creativity. Therefore, for reaching operations performance improvement, the company needs to re-evaluate and address its operations performance measurement system.
The concept of improvement involves among its connotation the activities of repairing and restoring, as observed by Baxter and MacLeod (2008, p. 11). Improving the operations performance system should refer to repairing or restoring the measurement system. Nevertheless, the process of repairing or restoring implies that the operations performance system was once working better and now it needs a revision, which in the case of Garden Gallery is not applicable, as the model that it applies is the original one.
Performance improvement is the ultimate goal of the operations performance measurement system and it must include the whole spectrum of ideas and strategies utilised as effective measures of reaching improvement (Slack et al, 2009).
Preoccupied if the measurement system utilized within organizations measures the right things, Hyer and Wemmerlov observe that companies need to deploy a strategy created by top management meant to indicate to employees (throughout the organizational structures) “where it wants to go and how it plans to get there” (2002, p. 257). Creating and applying such a strategy involves guidelines and procedures, which are specific to a restrictive to meeting performance objectives, as discussed earlier (Slack et al, 2009).
For an efficient and effective performance measurement system, the organizational strategy should be linked with the critical success factors of the company, which will be translated into actual goals that should be met at various organizational levels (Hyer & Wemmerlov, 2002, p. 257).
Looking at this information and knowing the problems that Garden Gallery shopping centre faces in terms operations performance measurement system, an improvement of this system would require an attentive approach to organizational strategy, for imposing a more restrictive performance objective working environment. Telling workers what to do and how to get there implies a vision and it acts as a guideline, which should be structured on departments and organizational levels. For applying this approach, the company should transform its critical success factors into strategic goals.
As it activates in the industry segment, Garden Gallery shopping centre focuses on the image of its brand, shopping experience and footfall (customer oriented) as the main factors. Specifically, in industry segment, the critical success factors (applicable also for Garden Gallery) are:
- Market segment – positioning and matching the services’ attributes with the benefits that the customers expect;
- Product Pricing – depending on the level of competitiveness in the industry;
- Customer satisfaction leading to customer delight;
- Customer Value Analysis it supposes to account for the customers’ spending, or to establish “Who is a king, an emperor and who is the prince” in terms of spending, nevertheless there should be permanently kept in mind that the today prince can be tomorrow’s king, hence the customers must not be neglected (Marthur, 2007, p. 388);
Yet another critical factor specific to shopping centre industry and a strategic focus for Garden Gallery is the tenant mix, meaning the mix for fashion and accessories brands, services and facilities that the shopping centre has to offer for reaching as much as possible the customers’ needs.
For improving the operations performance, the company should carefully seek to concentrate on these critical success factors and to create strategic goals for each of them, which should be next transmitted to teams with clear indications on how to reach these goals. However, for Garden Gallery to reach the objectives for all the critical success factors and implicitly aim for operations performances improvement, there must be known the fact that reaching the performance improvement for one objective may come at the cost of sacrificing the performance improvement for another objective, or applying a trade – of between objectives (Slack et al, 2009).
Nevertheless, the trade – off between objective theory has no applicability in the shopping centre industry or in the case of Garden Gallery, because it has some critical success factors which are equally important and it cannot afford to sacrifice neither one of the identified objectives for another, in terms of improving their operations performance.
Slack et al (2009) sustain this idea, stating that the real challenge in pursuing operations performance improvement is to avoid the trade – offs between objectives, which can be accomplished in 2 ways: (1) by repositioning trade – offs through improving operations performance for certain objectives while reducing the operations performances in other objectives; (2) by overcoming trade – offs through reaching a higher degree of effectiveness in operations and reaching improvements in one or more aspects of performance without reducing the performance of other objectives.
For achieving operations performance improvement, Hyer and Wemmerlov recommend a periodical evaluation of the measures proposed for improving the performances and change them whenever needed, according to the organizational objectives evolution, avoiding however a chaotic and capricious change of the measures (2002, p. 261). This implies that Garden Gallery should change its half – yearly evaluation into periodical assessments.
As Garden Galley’s operations are highly dependent on how the society and the economy develops, it needs to permanently adjust its objectives to its customers’ shopping behaviours by researching how they react to economic crisis and instabilities create strategies for coping with the findings. Therefore, in addition to applying strategic objectives and following them through an organizational strategy and to applying periodical evaluation of the imposed strategies (translated into measures), the company should also have the potential to develop as a learning organization by permanently adjusting its business strategy to the social development/evolution (vom Brocke & Roseman, 2010, p. 415).
Conclusion
Operations performance measurement system requires either performance indicators or organizational objectives for reaching organizational performance. This essay indicated that in industry segment, although an open approach to objectives can generate creativity and can stimulate employees, the nature of work in certain departments requires for a more restrictive approach on meeting the objectives, which to specify through processes and measures (organizational strategies) what goals should be met and how to achieve them. Transforming the critical success factors of an organization into organizational objectives determine an organized manner to reaching operations performance improvement, which is the actual goal of the operations performance measurement system. Likewise, operations performance improvement also require for more (periodical) evaluations of the imposed measures and adjusting them where needed and a permanent connection to the socio – economic evolution that determine the shopping behaviour, essential in the shopping centre industry. Garden Gallery needs to comply with all these observations in order to achieve operations performance improvement, by adjusting its operations performance measurement system to the restrictive organizational strategic objectives.
References
Baxter, L., F. & MacLeod, A., M. 2008. Managing performance improvement. New York: Routledge.
Hyer, N., L. & Wemmerlov, U. (2002) Reorganizing the factory: competing through cellular manufacturing. Oregon: Productivity Press.
Marthur, U., C. 2007. Product and brand management. New Delhi: Excel Books.
Slack, N, Chambers, S, Johnston, R & Betts, A. 2009. Operations and process management: principles and practice for strategic impact. Edinburgh: Pearson Education Limited.
Vom Brocke, J. & Rosemann, M. 2010. Handbook on business process management. Berlin: Springer – Verlag.
Zeglat, D., AlRawabdeh, W., AlMadi, F. & Shrafat, F. 2012. “Performance measurement systems: stages of development leading to success” Interdisciplinary Journal of Contemporary research in business. Vol. 4, no. 7, pp. 440 – 448.
