Analysis of the Operations at Woolworths
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Published: Tue, 17 Jul 2018
This essay is based on the analysis of the operations of the super market retail branch WOOLWORTHS, which is located in the heart of the Sydney CBD. Woolworths is a renowned chain of retail store in Australia and various other countries of the world. Woolworths have build up their standards of quality product and service for its customers. Current scenario of the Woolworths branch is that is having the problems with the personal performance of the branch staff, which has resulted in to decline of the quality of service leading to decline in the business for the branch.
The purpose of this essay is to determine the various factors that determine the quality of service and identify the factors leading to the problem of poor personal performance of the staff. The further part of the essay describes about the various strategies applied and various steps taken in order to maintain the effective running of the operations and the improving the quality of service up to the Woolworths standard. At last Essay provides the overall conclusion of the Woolworths operations ineffectiveness and also the lack of various strategies required for effective and smooth operation system.
Today in the era of global competition Woolworths have set their standards of operation and quality services to its customers. At Woolworths store they are conscious of their responsibilities- serving the millions of the customers in each and every community across Australia and New Zealand. With this profile comes not only a responsibility to understand and manage our impact and also manage the long lasting benefits in the retail sector.
Woolworth’s operations have set standards, which affect the share holders, customers and supply chain. This essay claims to give an insight into how the Woolworths perform well in the retail operations against their commitment and targets,
Woolworth’s operations are known for its quality goods and services around the various different locations. Woolworths has been at or near the top of that list since early this decade. Known affectionately as “Woolies” in Australia, the company has ramped up the refurbishment of supermarkets in an effort to retain and bring in new customers. Woolworths (2010).
A recent review of the branch has highlighted that branch is not performing its operations effectively and efficiently. The reason behind this scenario is that, the staffs seem to have taken the standard of their personal performance for granted. As such, it is important to carefully examine and study the present situation of the branch and plan ways on how to improve and re-establish the status of the Sydney branch in terms of process, capacity design and customer satisfaction
Issues affecting the performance of staff
Under the perspective of operational management, the various critical issues identified for the decline in the personal performance and ultimately resulting in the decline of the service quality and the business for the branch are the capacity; demand forecasting, supply chain, design process and human resources and job design.
Service process design
Woolworths retail the product combination of the good and services, goods are tangible and whereas the services are intangible. Service referred as an act that is done to or for customers. Chwen Sheu, Roger McHaney, Sunil Babbar, (2003) support that service processes require the participation of the customer without the customer, service processes cannot take place. Service at Woolworths are produced and consumed simultaneously at the point when the customers are shopping at Woolworths.
Woolworths have established the standards from the manufacturing to the retail outlet, the quality services which are provided by the Woolworths staff. Which are inventory handling, displaying goods on shelves and helping customers for the customers within the outlet, with low customer interaction. The various varieties of tangible products are available at Woolworths which requires the least customer service delivery. As the customers select the goods and bring it to the counter for purchase.
The self checkouts counters are also available at the various other outlets of Woolworths, for the ease of the customers to cut down the need of the service from the Woolworths staff, though they have a staff available for the help of the customers at the self checkout counters and this cannot be considered as the pure form of service. So, organizations those are dependent on customer participation causes difficulties in managing effective service process design. Service is provided by a service delivery system which includes facilities, processes and skills needed to provide the service (Stevenson 2009).
In the case of Woolworths retail outlet there is inadequacy found in measuring service quality performance based on discussed criteria which leads to poor service quality and declining customer satisfaction.
Forecasting is considered to be the most important function in the retail organisation, as it enables the mangers to foresee the future needs and perform the related functions accordingly. Such as ordering of the next supply, managing the inventories, staffing is also equally linked with the forecasting functions. The quality of this business can only be good on the basis of its forecast. In today’s economy where business condition is unstable forecasting is a bit difficult. (Aviv.Y, 2001). The Woolworths branch at Sydney CBD is also struggling with the forecasting issues, due to lack of countable performance of the Grocery manager. Retail organizations today must strive to satisfy the unique demand for each of their customers. Gone are the days of the mass market where a single assortment, standard pricing and a single “average location” forecast would satisfy consumer demand in all stores. To be effective, forecasts today must account for demand differences across all stores, geographies and product lines.
The store manager is also incapable in providing the commendable performance due to the lack of interest and the availability of the old procedures. The resources available to them are not adequate and lack the evidence. The manger is completely dependable on the quantitative approach which includes the past historical data or the casual variables to forecast demand whereas the forecasting of the demand of the goods sold also requires the qualitative approach that is the incorporation of the factors such as the decision makers emotions, personal experience and value system.
Demand and Capacity management
Heizer and Render (2003) suggested that in the view of service industry scheduling customer is demand management and scheduling workforce is capacity management. Heizer and Render (2003) also support that the demand management is attempting to influence when customer attend the service and capacity management is ensuring the organization capability to meet the demand.
In the operation of retail industry such as the Woolworths store, demand management is the management of the demand created for the goods and services at the store by the customer intended to purchase the goods and service according to their taste and preferences. Planning and providing the customers goods and services they desire at the time of their shopping is the capacity management. Various customers visit the store on daily basis and purchase the goods and consume the services according to their ease, the staff at the Woolworths is unable to handle the demand and deliver the goods and service according to their capacity. Understanding the demand is not sufficient to manage the demand fluctuation. It also involves the organization’s capacity to fulfill the demand. Therefore, it is imperative for an organization to understand its capacity constraints in terms of time, labor, equipment, and facilities. The major challenge faced by outlet is the short of the capacity to minimize the waiting time of the customers at the purchasing counter. The lack of equipment and staffing during the peak hours has created a gap between the demand and the capacity of fulfilling the demand. Klassen K.J & Rohleder T.R. 2002.
Supply Chain management
Supply chain management is considered to be the oversight of the materials, information and finances as they move in to a process from supplier to manufacturers to wholesalers and from retailer to consumers at the end. Supply chain management is said to be the integration of the activities that procure materials and services transform them into intermediate goods and final products and deliver them to the customers
Effective Supply Chain Management can offer customers high quality products and services with low prices (Waller L.D 2003). Supply chain management involves the coordinating and integrating these flows with in and among the companies. The ultimate goal of the effective supply chain management is said to reduce the inventory and with the assumptions that products are available when needed, (Render.B, Heizer.J 2003). Supply chain management includes determining the following for the effective running of the operations. Transportation vendors, Credit and cash transfers, Suppliers, Ware housing and inventory
Woolworths being a growing super market store in Australia, they have large number of suppliers supplying the various goods in store. However this store of Woolworths faces many challenges with the supply chain management, Such as the bulk order delivery of the goods at the receiving dock and lack of storage space for the certain products. Also the inappropriate tracking system of receiving and ordering of goods, they also suffer from Bullwhip effect, staffs of Woolworths branch stand helpless for the insufficient delivery of the goods and services by the suppliers. Due to the management problems the staffs of the Woolworths fails to provide the quality of goods and services to its customer due to the ineffective inventory management systems and control. Also due to the poor handling of the stock, store also suffer from the various product in to dump due to their expiry date and out of demand.
Human resource issues
Human resource foremost objective is to manage labour and design jobs so people are effectively and efficiently utilized and also they have the quality of work life in an atmosphere of mutual commitment and trust for instance the job which is not reasonably safe also for which the pay is equitable and also achieves the physical and physiological requirements. Various following issues which have lead to the performance of the staff to decline and ultimately loss to business. Memmott & Growers (2002)
“Job design refers to the way tasks are combined to form complete jobs” (Robbins and Stuart-Kotze). Using job design principles results in clear job descriptions, a motivated workforce and successful completion of tasks. People are assigned to a job because they are perceived to be able to fill its requirements. . A proper job design makes jobs meaningful, interesting and challenging. Individual needs, task attributes and work setting lead to performance and satisfaction (Wood et al. 2006).
According to Stevenson (2009) job design is one of the oldest aspects of operations management. Work design refers to specifies the tasks of each individual’s in terms of working environment and methods of doing job is called job designing.
The job design helps in smooth running of the operations; the Woolworths human resources department recruit the individual for the specific job role centrally and appoint it to the various stores. Staffs at the CBD store are appointed but there is no further induction programme to guide their duties and to use it skills for serving the customers and gaining the customer satisfaction. The store manager should have the various programmes to develop their staff according to their skills and the environmental conditions. They should more specifically distribute the staff according to the need and requirement of the task with the proper planning; this will help the store in attaining the proper utilisation of the labour and time for the specific job. The staffs at Woolworths get exhausted or losses interest by repeatedly performing the same task again on daily basis. The branch management due to lack of coordination between the store and lack of supply management system fails in designing the job for the better utilisation o the labor force. The staff also lack in control or quick decisions required at the time of operations.
Although the standard work schedule in Australia is still five days and 8- hours a day and which includes the half hour break. The Woolworths store at CBD largely experiences the no show and the absenteeism of permanent staff, which results in loss of customer satisfaction and reduces business. The reason of no show and the absenteeism is the unsuitable working hours for the staff and also the long working hours lead to the no show of staff on the day of work.
The above discussion of the psychological components of job design provides the insight into the factors that contribute to the job satisfaction and motivation. Motivation is a key factor in the smooth and effective running of any business. It influences the quality and the productivity of the employees working in the organisation. Monetary satisfied employee is more likely to perform well comparative to the less satisfied staff. Employees are more likely to continue their employment at a company where they can communicate openly and freely with all aspects of management, up and down chain of the command. This benefits not only the employees also the organisation (Slack et al, 2004).
Work life balance from employee apparent is described as the maintenance of a balance between work life (the time spent for working at job) and life at home (that is different roles and responsibilities at home) whereby it is further been described as participation in one role has made difficult to be hundred percent in another role (Barodel, Tharenou, & Moss, 1998). Due to lack of staff at the Woolworths the current staff is made to perform long hours and given limited off, which has currently resulted in the poor performance standard by them, as they are not been able to maintain balance between their professional and personal life.
In order to solve the various issues with the Woolworths branch following strategies will be drawn in the further part of Essay.
A well functioning process delivers the proper service. In addition Schroeder (2008) draw two key issues in service designs are the degree of variation in service requirements and the degree of customer involvement and customer contact in delivery process. These issues have an influence on determining the degree to which service can be standardized. That is every customer gets more or less the same service or highly customized to customer requests, and exactly the same service is virtually never repeated for the another customer.
Woolworths Management facing challenges in designing service process to match with the requirement of the customer. The important tools that can be applied to the designing process of the service are Service matrix and Customer contact matrix. Teasley. C. E. III & Ready. R. K. (1991).
In case of Forecasting, Forecasts drive a business’s production, capacity and scheduling system which can directly affect the operation in finance, marketing, and personnel planning department. To maximise use of resources, capacity planning should be carried out. Klassen and Rohleder 2001) recommend four general strategies for demand forecast and capacity planning. Firstly, “match” that states matching capacity exactly to demand. Secondly, “provide” that maintains capacity at a certain level that can afford maximum demand. Thirdly, “control” that control demand to be at average level and fourthly, “influence” which influence in reducing magnitude of peaks and valleys of demand and match capacity to the resulting pattern.
It is an important tool for the Woolworths management to overcome the forecasting issues as it will help in gaining the knowledge about the customer taste preferences and demand for the various goods and services at Woolworth store.
Retail-oriented operations management research has focused on a variety of issues, including forecasting techniques, the use of vendor-managed inventory (VMI), and the operational antecedents of service quality and profitability. Organization having well operation system delivers the proper service. (Andrews and Parsons, 1989). The two key issues which are considered in service design is are the degree of variation in service in service requirement and the degree of customer involvement and the customer contact in delivery process these issue have raised the concerned for the determining the degree to which and what standards the degree can be standardized. According to the Hayes (1996) another strategy that can be effective is the customer contact matrix. In this system the customer contact is eliminated for the better efficiency such as the self checkout counters which help customers in purchasing the goods at the counters of their own, the Woolworths management needs the self checkout counters also the staff which help them in guiding the customers from the selection to the purchasing goods, other system are costly but they require high interaction of the staff with the guests, with the low involvement of staff for the service and customers full involvement in purchase increases the rate of high satisfaction among the customers.
Demand and capacity management strategies
To determine the capacity of resources and maximizing the use of the resource, also to achieve profitability in the operations Break even analysis is the efficient tool for evaluating the capacity (Waller L.D 2003). With the help of this tool branch management can analysis the status of the store, as it provides the clear picture of the number of the goods produced and sold. This advance tool is appropriate to measure the large investments involved. This approach will help in gaining the clear picture of the branch goods produced and sold.
Another tool for the total quality management is the six sigma. Six Sigma is the comprehensive system for achieving and attaining the business system. By implementing the Six Sigma improvement model which first defines the critical output and identifies the gaps for improvement, secondly measures the work and collects the data for the process that can help close the gaps. Thirdly analysis the data fourthly improves the data by modifying the or redesigning the existing procedures and lastly control the new process to make sure the performance levels are maintained
Implementing the Six Sigma is a big commitment is the Woolworths management implements in the operations to improve the quality of the service and the goods it will help in raising the customer satisfaction.
Planning and Scheduling System:
To attain the efficient operation system, that is the capacity of the outlet, customer demands. Woolworth’s management can use the advance planning and scheduling system. With the help of this system the Woolworths management can use the linear programming techniques and other algorithms to develop planned schedules. In this system the Woolworths can manage the future demand efficiently for instance what to order and how much to order to the various suppliers.
Effective human resource
Labor planning is the means of determining the staffing policies dealing with the employment stability and work schedule. The major problem with the Woolworths CBD branch is to maintain the work schedule of the employees. In today’s fast pacing environment the employees require the flexi timings at work. Flexitime allows the employees within limits to determine their own schedule, as this policy provides employees more sovereignty and independence on the part of the employee.
Similarly it is effective for the management on the cost point of view as it enhance the job satisfaction. Another option is the flexible work week; this plan often calls for the fewer hours but the longer days in week
With the help of the flexibility in the working hours of the employee Woolworths can gain the job satisfaction from the employees by managing the staffing according to the employees availability, as it will help them in gaining freedom to work and manage their social life.
Managers in the organisations must build or rebuild loyalty and commitment, and create a positive organisational climate in which employees are motivated to achieve at high levels of work performance .To motivate the employees monetary rewards take the form of bonuses, profit and gain sharing and incentive systems. To motivate the employees the various schemes can be adopted such as the incentives system is based on personal productivity of the employee. It helps in motivation the employees to produce or give the best above the predetermined standards.
Also the staff must be maintained with the different job role every week. That is variety is added to the employees prospective of job. It helps in marinating the interest of the employee at workforce
Finally concluding the essay, the issues raised in the essay due to incapable delivery of employees is affecting the operations performance standards. Various issues, such as the poor service design and selection, process inadequacy, inefficient supply chain management, improper forecasting, and inefficient human resource system. In balance capacity management is together affecting the customer’s satisfaction standards.
Due to the nature of the retail industry in the process of customer service, the design of service for the customers should be present. Changing according to the change in the customer requirement is the basic ingredient of the retail industry; customer satisfaction can be gained by providing better delivery of goods and services to its customers. If the customers are satisfied they will not only provide repeat business but also share their personal positive experience with others. Customers with the high level of satisfaction will provide profitability to the business than those who are merely satisfied.
To maintain the high standards of the employee performance it requires the employees who are flexible, smart, presentable, and adaptable.
Quality control is the important factor for the retail outlet. For the better quality and minimizing the errors the Six Sigma can help in improving the quality control tool in the branch. As the part of the action plan, the major focus of the management should be in minimizing the efforts
Essay raises the issues which as the efficient operation managers are assessed and various operations tools to improve the quality of the service and the personal performance of the staff. With the implementation of the strategies such as the Six Sigma, incentive system and work schedule will help in improvising the performance standard of the staff.
The Sydney CBD Woolworth is currently requires the designing of the operation system that is the management communication strategies. The employee at Woolworths have suffered from the improper design system and management strategies which lead to the loss of motivation and resulting in the decrease of their own personal performance system.
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