Operations Management in Business - WH Smith

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Operations Management in Business


Contents

WH Smith Introduction

Task 1

Task 2

Task 3

Referencing

WH Smith Introduction

WH Smith was first created by Smith Family in 1792 as a newsagent, in then became the company with the name “WH Smith” in 1828 and launched the website WHSmith.co.uk in 1999. This success fully growing company opened many stores in Rails stations, High Streets, Shopping Centers and gradually lost its profit of £135m. The arrival of Kate Swann made WH Smith to run as the profitable company in a decade. The success of her achievement is based on how she organized and worked towards her goal. Throughout this report there are many explanations related to WH Smith’s success using operation management skills by Kate Swann.

Task 1

Operation is the key part of the business which produces goods and services. It involves in planning organizing, controlling an organization operations. Organization without a planning will never be able to success in its business. According to the scenario, the success of profit is based on the Operation Management, which involves a complex set of management activities involved in planning how they wanted to improve their sales organizing leading, by cutting the costs. Kate Swann managed to achieve the target of turning WH Smith into a profitable company by taking into account of the operational management. Following the principles of operation management in an organization will help the company to reduce the cost of products and services and also in the mean time it will help to increase the customer’s satisfaction towards the product quality and the services. As the operations function is responsible in goods and services, it is important to support the input and output to be delivered on time scale. Various input such as capital, labor, and information should be measured in order to obtain desired outputs. The role of operation management is to improve productivity which will help to improve the organizations financial and also to meet customer’s competitive priorities. In the scenario it shows that Swann has targeted the teenagers and as well as young women for stationeries this make the targeted users to be satisfied as well increase the sales in WH Smith.

The key elements of Operation managements are known as Business logic, System theory. Kate Swann has understood the business logic in how to increase the profit for WH Smith. She understood how to target the customers and increase the profitable margin. In her success we can see that she has cut the cost persistently which is one of the element in business logic. Applying system theory to a business helps to find out how the environment impacts business process.

According to the report of “Our Quality Commitments to Our Customers” in WH Smith website it clearly says that WH Smith is responsible to fulfill the minimum standards required by the law. If WH Smith reduces the standards and quality towards their customers due the cost effective they might not be able to success in our goal. For example Funky Pigeon greeting card shop which was open online is a best known website because customers get best services. Even though it was introduced to the market 2 years ago it has been famous. The reason behind this is their quality and services that they have been giving to their customers so far. The customers get the opportunity to choose their cards with uploading their own pictures and also the cards ordered by the customers are delivered very next day to their required address. This will impress the customers and make them come back.

The online strategy objective of WH Smith is to launch the Funky Pigeon which sells greeting cards, personalized gifts and cards according to the customers need. The products that are sold in this website are very quality as well as cost effective. The services given to the customers are very dependability as funky pigeon is a fastest delivery service. It has the next day delivery services for their customers. More customers may prefer to visit their website as they are not limited by options in cards. The customers got the verity of option in choosing cards. As funky pigeon allows the option of personalizing the gifts or cards the customers may be satisfied in choosing any of the products from them.

System is known as the collection of parts which can function independently for the success of the common purpose. For example, System contains the Input – Process- Output in an organization. It is essential that all the collection part in a system work collaborate for a company to be successful. WH Smith should follow each parts as Input and Process and output to make their company to run in organize planning and control and to be on right track Sub-system is known as the complex collections of many Systems in order to achieve the common purpose. In other words it contains many Input many process and many output to achieve the goal of the company. WH Smith may contain many system and sub-system diagram for the organization. Following diagram shows the system function in WH Smith.

Task 2

Strategic planning is an organizational management activity which helps to set priorities, strengthen operations, and to ensure that employees work towards the goals to achieve success. An effective strategic planning articulates not only where and what actions needed to make progress, but also how it will know if it successful. In order to implement success strategic planning need to follow the performance of operational management. Operational management is essential for all organizations. The strategic planning mostly deals with activities of any business organizations such as operations, sales, finance concerned with different level managers. Operational management is focused with the production / services provider level of organizations. There are three stages of strategic planning. They are known as Economy, Efficiency and Effectiveness. To achieve the profit margin Swann has introduced the stationeries targeting the teenagers and young women. WH Smith started to sell stationeries and sweets at the checkouts. This is a good example that Swann has used one of the strategic planning elements known as Economy. As it is essential assign that right resources has been used at the right time at the right place and right cost which a management should consider in business objectives. In other hand WH Smith has the big online strategy Funky Pigeon where they work in very cost effective. “Swann announced she was pulling out of selling music and DVDs”, she has compared the market and in order to increase the profit margins. And the comparison stores such as HMV thinks that it’s brave. As she consider the Efficiency, she has compared the performance target she kept to increase the profit of WH Smith. Even though WH Smith has its high street retail it has target the online retailers by introducing Funky Pigeon card site. Effectiveness is determined by examining the objectives and achievement of a company. WH Smith was been losing by 135m due to Swann’s strong operational management the company has turn into profit of £106m.

Quality is very important for an organization. An example of good quality product with less cost is when a customer who consumes the product and services has nothing or less to complain about the product. In the scenario it says “WH Smith now sells roughly £65 of goods for every £100 of custom” the success is they have carefully reviews the objectives. WH Smith has to review the existing products carefully in order to compare the function of the product required by the customer, who demands them in lower cost. Kate Swann has carefully reviewed and decided that selling of Music and DVD’s are not profitable and not worth of reducing cost. So she completely stopped selling DVD’s and started introducing new ideas on selling new products in WH Smith. They target certain age group to boost their sales. As we can see in the scenario that it says the teenagers and the young woman have been aimed for stationeries. What Kate Swann has done leads WH Smith for its success.

Following the performance objective it helps to add value to the customers in delivering quality products or services. The Quality, speed, dependability, flexibility and the cost may defer as performance objectives. Quality services as known as error-free services. There may be no any complains about the product satisfaction. This can be improved by getting customers feedbacks. For example if we take WH Smith the quality can defer as the store cleanliness, an appropriate and attractive outlet and also very friendly and helpful staff so the customer may like to visit the store often. It also includes the goods conditions. As we see WH Smith has a big online strategy Funky Pigeon card site. If they fail to deliver their customers goods on time, they may have bad viewpoint against their services and none of the customers like to continue doing shopping with them. When we look at the WH Smith store it all depends on a customer asking for a product or services and getting it to them, in another word satisfactory of their shopping in WH Smith. As we see in the scenario it says that Swann plans to open more shops which are stuffed with stock and screaming promotional banners. This is a role of operational management to achieve as it’s based on dependability. It increases the product or service in the market. WH Smith has sold stationary targeting the teenagers and young women and they also started to display sweets at the checkout make customers to purchase them. If they have not been flexible in introducing new lines to their sales they will not be able to achieve success in their business. Swann also cuts down the cost in order to boost her profit margins. These are the importance five performance objectives that underpin operation managements.

Task 3

For a good operational planning is very important, this will lead the organizations to know what they have to do next, in order to deliver best services to the customer’s demand. Planning and controlling related to each other. It is essential to consider these methods in an organization like WH Smith as they helps for the effective outcome. Planning helps what to do and when to do in other hand controlling involves making sure that the plans are taken place. The planning and controlling involves cost estimation, work measurement, planning, routine concerns. Based on this scenario we can see that WH Smith has planned how to fulfill the needs of their customers. Kate Swann for example knew that young women and teenagers will purchase their stationeries and mean time the sweet has been display near the counter in order to promote it to their clients. If Kate Swann didn’t think of what customers normally demand, WH Smith may not be able to satisfy their customers.

Linear program is a mathematical technique designed to help to plan and make decisions. This will help to maximize or minimize some quantities such as profits or cost. Liner program requires action on what to choose, where Kate Swann need to introduce displaying sweets near the checkout. One of the examples of WH Smith success in applying linear program in operational management is when Kate Swann stops selling music and DVDs to increase the profit margin.

For renovating WH Smith shops there are certain tasks need to be planned. The following table is the tasks listed down for the shop renovation.

Activity

Duration

A

Structure repair

4

B

Ceiling

2

C

Flooring

4

D

Electrical & Power require

1

E

Main Shop area tidy

3

F

Exterior Walls repair

2

G

Paint outside

1

H

Check out area

1

I

Shelf

2

J

Alarm

1

  • D must follow A
  • G must follow A and F
  • H must follow A, C, D and F
  • I must follow A, C and E
  • J must follow A and D

The above network diagram is an for an WH Smith renovation.

WH Smith was running with lose until Swann take over to make it a profit. When we look into the operational outcomes we can see clearly that the WH Smith lose of £135m turned into profit of £106m. Another example of operational outcome is targeting of displaying sweets at the checkout and also selling stationery aiming teenagers and young women.

Quality can defined by the process through which a business seeks to make sure that the product quality is maintained or improved meantime reduces the errors. It requires both management and employees make every effort for perfection. And according to the Scenario it sets an example Kate Swann stops selling music and DVDs and also the checkout assistants attempt to force-feed the chocolates displayed at the checkout areas.

Without planning and controlling an organization will be hard to monitor. It is essential to follow the concepts of Operational management in order to achieve success in an organization. Kate Swann’s success is based on how she followed the operation management skills in order to bring the profit to a company which was running in loss. As Kate Swann follows these skill it states in the scenario that she has the ability to make a unpleasant shops to have profit business.

Referencing

  • Six Sigma, [Online],

Available: http://www.isixsigma.com/implementation/financial-analysis/cost-quality-not-only-failure-costs/

  • Operations Management, fourth edition,[ Online],

Available: http://wps.pearsoned.co.uk/ema_uk_he_slack_opsman_4/17/4472/1144836.cw/

  • The Guardian,[online],

Available: http://www.theguardian.com/business/blog/2013/jan/23/wh-smith-kate-swann-profit

  • Introduction of Operation Management, [Online],

Available: http://highered.mcgraw-hill.com/sites/dl/free/0070951675/436573/samplech01.pdf

  • Muhammed Akram Khan, Performance Auditing – The Three ‘E’s, [Online],

Available: http://www.asosai.org/journal1988/performance_auditing.htm

  • Operational Planning, Wikipedia, [Online],

Available: http://en.wikipedia.org/wiki/Operational_planning

  • Linear Programming, [Online],

Available: http://wps.prenhall.com/wps/media/objects/2234/2288589/ModB.pdf

  • Sree Rama Rao, (2009) Operational Planning and control decisions,[Online],

Available: http://www.citeman.com/5031-operational-planning-and-control-decisions.html

  • Quality management, Wikipedia, [Online],

Available: http://en.wikipedia.org/wiki/Quality_management

  • WH Smith, About WH Smith, [Online],

http://www.whsmith.co.uk/fcp/content/Help-AboutUs-AboutWHSmith/content

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