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Azam Super market is a newly opened family business owned by siblings Jaswindher singh, Pervindher and Hardeep Kaur based in UK. Azam Super market is mainly focuses on grocery, offering a wide variety of Indian food and dairy products. The organisation has got 5 full time employees and 2 part time employees under the administration of Hardeep Kaur, as she looks after administrated related activities. At the mean time Jaswindher singh support the business related activities like marketing and advertising and Pervindher singh responsible for purchasing or approving of goods and services needed by the organisation. Within short span of time Azam super market gained the trust and value of the community around the area and become a strong SME in that particular area. Now business is going up to next level with a constant increase in number of customers. The owners are really busy with business promotion and the increasing number of customer becomes a difficult task for them to satisfy each and every customer's need and to operate in their traditional way. This report overlooked the concept of new economy and old economy in context of operations management based on Azam super market.
The Internet is a very important new technology, not surprisingly, has received much attention from entrepreneurs, executives, investors and business observers (Porter, 2001). The New Economy concept has been associated with an enormously wide variety of meanings. According to Shepard S, "By the New Economy, we mean two broad trends that have been underway for several years. The first is the globalisation of business. Simply put, capitalism is spreading around the world - if not full-blown capitalism, at least the introduction of market forces, freer trade, and widespread deregulation... The second trend is the revolution in information technology. These two broad trendsâ€¦ are undermining the old order, forcing business to restructureâ€¦."(PAULRE B, online). The combination of rapid growth and the enthusiasm associated with advanced technologies has made New Economy companies magnets for talent management and particularly for ambitious young (Hayes, 2002).
Old and New economy
New Economy business model brought a new approach to design business (Walters D, 2004), some researchers understands that the new economy as a source of value creation (Fuentelsaz L, et al 2002 online). Meantime some studies based on macroeconomic shows that there is no such thing as new economy in comparison 20 - 30 years ago with present system of doing business has resulted the globalisation and unpredictable environment. (Barton J et al, 2002 online). All these studies prove that the new economy has played a vital role in changing the face of business world. Literally, the meaning of new economy differs, but the key output of this concept is purely based on the combination of information technology and the globalisation.
Contrary, the concept of old economy started in the beginning of industrial revolution and it is very excellent at the huge production and utilization of physical objects (Plisch S & Glick B online 2004). "AÂ termÂ forÂ the old blue chip industries that enjoyed fabulous growth during the early parts of the century as industrializationÂ around the globe,Â and particularly in the United States,Â expanded.Â Since the new economy has arrived, old economy companiesÂ haveÂ still experienced growth, but at a declining rate". (Anon, Online)
The main objectives of new economy in operations management
Discover key strengths driving the new economy
To find out how marketing and business environment has been changing as a result of the new economy.
Investigate how the technology has changed the approach marketers use customer databases.
Identify with how business people practice consumer relationship management
To reinforce competitive advantage linked with being early to market by finding methods to boost its customers cost of switching to a competitor.
To become more flexible to meet customers need in real time
Source: James K E (2003) and Hayes R H (2002)
The main drivers of the new economy
Globalisation: Today business is faster and pervasive because of the globalisation. Distance is no more an issue for companies and most of the organisations profit comes from outside of the headquarters.
Knowledge Management: Knowledge management is playing an important part in operations management. In current scenario, the knowledge component of services and products has increased dramatically and become the dominant figure of customer value.
Change: Companies are facing immense competition from their rivals. Drastic increase in competition forcing organisation to search for new and more human ways to increase productivity and competitiveness.
Digitalization or information technology: The power of internet made revolutionary changed entire concept of doing business or operations management in organisations. Internet emerged as a new ways of building and delivering products and services.
Source: James K E (2003) & Kotelnikov V (2010)
New Economy Vs Old Economy
Given below issues simply shows the massive difference between old and new economy
Visit the book store
Visit the website
Walk around the campus to departments, registrar's office to register modules
Access via campus website to register for education
Buy film, use camera, take picture, take it to processing
Visit the ticket office, pay cash
Metro cards, electronic cards, online booking
Visit store, pay, go
Use self service kiosks
Visit bank, queue, withdraw money, deposit money etc..
Use debit or credit card, online transactions etc...
Contrasting Old and New Economy Operations Management
Based on products and services
Success was calculated by share of market
The highlight of typical enterprise was on scale and competence
Control constant flows through internal processes
Different Ways to Compete
Based on information's
Success was calculated by time to market & site visitation
The highlight of typical enterprise was on connecting technology
Network of collaborators
Packages of compatible products & services
Manage dynamics of extremely flexible and embryonic products within networks
"Indirect" control (trust, incentives, etc.)
Get to high volume
Source: (Anon, Online)
Challenges posed to new economy in context of operations management
Apparently, development of new information technology systems has made new economy companies a cutting edge in the industry and particularly can attract young talent pool in to their management Hayes R H (2002). But it is obviously clear that lack of proper planning and innovation on these, allow the companies to treat them by getting bad decisions that have wrinkled the attractiveness of their industries and undermined their own competitive advantages (Porter, 2001).
According Hayes R H (2002) there are 5 challenges posed to operations management by the new economy.
Analysis of organisational unit in a company
Operations management is concerned with inputs like constant services and products
Operations managers interference to control the all process should affect organisations activities
Budget controlling has a vital role and a major concern for all operation mangers
Identifying competitor's strength throughout the process and put superior performance against them to get into the market.
Evaluation and design of operating and management information systems
Management information systems are defined as a study of computer based systems in management and business (Laudon, J P & Laudon, K C, 2007). OCC defined MIS as a system of process that gives the information essential to control a company successfully and it also generates important components of prudent and reasonable business decisions. (OCC, 1995 p-1).
Role of MIS
MIS has a key role in the successful management because of the following reason:-
Information is the familiar denominator underlying the management operations of organising, directing, planning and controlling.
MIS are closely associated to the basic system objectives, strategies and polices introduced by the management.
MIS gives information to the management in the organisation as per the level.
MIS brings different type of systems like analysis systems, query systems, decision support system and modelling systems to the cater of the various needs of the organisation.
MIS improves organisations efficiency and it affects the performance and productivity.
(Bagad, V S 2009 p-2-2)
MIS should be design to achieve following goals
For effective planning and controlling
Policy and decision making
Planning and scheduling
Improve interactions among the employees
Reduce production cost of organisation
Source: (Bagad, V S 2009 p-1 & OCC, 1995 p-1)
Fundamental Role of MIS
MIS performs 3 key functions in an organisation
Support of business operations
Support of managerial decision making
Support of strategic competitive advantage
Managerial Decision Making
Fig 1 shows fundamental role of MIS in an organisation
(Bagad, V S 2009 pp 1-3)
Business operations: In business operations MIS can be useful in different type of applications like recording customer transactions, billing, cash management, total sales calculation, inventory etc (Bagad, V S 2009 pp1-3).
Managerial decision making: Decision making process is depends upon manager's decision whether to invest in a particular product based on the sales history of the product (Bagad, V S 2009 pp 1-3).
Strategic Advantages: Strategic advantages can be gained by the innovative use of IT over competitors (Bagad, V S 2009 pp1-3).
Risks Associated with MIS
Management's decision based on unproductive. Inaccurate MIS might increase risk in certain number of areas like pricing, credit quality, liquidity, foreign currency or interest rates. An ineffective MIS may causes operational risk and can harmfully affect an organisations scrutinizing of its fiduciary, consumer, fair lending, Bank Secrecy Act or other complaint related activities (OCC, 1995 p-3).
Operations Management for Azam super market
Operations management is very important because it can reduce costs, it can increase revenue, it can reduce the need for investment and it can also increase innovation. Operations management is the activity of managing the resources which are devoted to the production and delivery of products and services (Slack, N, et al., 2010). All operations produce products and services by changing inputs into outputs.
The case study about Azam super market reflects the importance of proper design, planning and control in the organisation. Azam super market is a SME, so in practice managing a SME has the same as a managing a bigger organisations. Smaller companies may don't have the resources to offer individuals to specialized tasks. So people may have to do different jobs as the need arises. Such an informal structure can allow the company to react rapidly as opportunities or problems present themselves. But decision making can also become confused as individuals roles overlap. Small companies may have exactly the same operations management issues as large ones but they can be more difficult to separate from the mass of other issues in the organisation. (Slack N, et al, 2010 pp 8-10)
Advantages of operations management in SMEs
The main advantages of operations management in SMEs like Azam Super market are everybody in the organisation has much broader jobs. It's very expensive to have the funds for the expenses of having professional in specialized areas. So they can maintain their philosophy of quality amongst everybody in the company and it helps them to react very quickly when the market demands it. If an idea looks promising they can create a small and informal team together to look at it further.
The transformation process
Fig 2 Input - Output transformation model
Source: (Slack N, et al 2010 p-11)
If Azam super market wants to be a successful organization they have to have good organization skills and they can deliver quality services. It should have done by its operations management or managers. The activities or inputs are converted into fine outputs in the form of customer satisfaction. This can be making it possible with the help of efficient and effective staff system and facilities. Operational mangers should consider all employees as, who are responsible for managing all resources of the organization. They have similar set of responsibilities and activities and are called by different names in different organizations.
Management information systems for Azam Super Market
MIS play a vital role in the organization on the utilization of physical, human and financial resources of a productive system. In any business all the managerial task such as finance, functional, material, HR, manufacturing and R & D support all managerial tasks becomes more effective (Bagad, V S 2009 p-2-3). MIS offers applications like supply-chain and inventory management, enterprise resource planning (ERP), customer relationship management (CRM), sales and marketing, product lifecycle management (PLM), help desk software, sales force automation, and human resource management software.
Increasing demands in Indian food in the UK require SME like Azam super market to implement above mentioned applications to improve the efficiency and performance of the company to meet the needs of the customers. An effective implementation of these applications in Azam Supermarket, leads to systemization of the business operations also the stream lining of business activities.
Fig 3 shows the support of MIS in the management functions
Management information systems
Source: (Bagad, V S 2009 p-2-26)
Management information system helps to accomplish goals of an organisation effectively and efficiently. Is also helps to carry out all business operations smoothly.
Process Design in Azam Supermarket
"To design is to conceive the looks, arrangement and working of something before it is created. In that sense it is a conceptual exercise. Yet it is one which must deliver a solution that will work in practice. Design is also an activity that can be approached............." (Slack N et al p-87 2010)
Fig 4 The design of products/services and process are interrelated and should be treated together
Source: (Slack N et al p-88 2010)
Process design and product design are interrelated and it has a very vital role in Azam Supermarket. If the product or process is not well designed the quality of the product may suffer. Further, the product has to be manufactured using materials, equipment, and labour skills that are effective and affordable; otherwise, the expenditure will be too high for the market. The main purpose of the process design must meet or exceed customer's expectations. Process design brings together marketing analysts, sales forecasters, engineers, finance experts, and other members of a company to assume and plan strategically. It is electrifying and imaginative, and it can bring success or failure for a company.
In addition, Volume and variety have a major affect on process design in any organisation. The overall nature of any process is strongly influenced by the volume and variety process.
The design of product and services in Azam Supermarket
In any organisation a customer should first notice the quality of service and products they are being delivered. If both quality and service are not good enough to satisfy customers it should have a negative impact on the whole business process. In this case study Azam super market is really focussed on delivering good services and products to the customers. The operations management team in this organisation is well aware about the importance of design. It also helps their business connect strongly with their customers by anticipating their needs. It also brings them to generate new ideas and turn them into practical.
In any organisation location is one of the most important factors that decide company's future. Location decisions will usually have an effect on organisations overall performance and once location has taken it is very difficult to undo the decision (Slack N et al p-147 2010). For Azam Supermarket Location is very crucial because of their products, that mainly focuses on a particular community. If Azam supermarket opened a retail store where their target market is minority they can't perform well and it ultimately result in the loss of the organisation. So it is important that to find a location where their organisation can perform well. The main objectives of location decision are to achieve an appropriate balance between 3 related goals:
The geographical location of the operation
The revenue potential of the operation
The service the operation is able to provide to its customers
(Slack N et al p-148 2010)
Internet information systems exist to serve and support the activities of the organisation of which they are a part. Hence, any change in information systems must seek to improve the ability of the organisation to accomplish its goals. There different methods for identifying and evaluating the goals of the organisation and of measuring the contribution alternative systems designs may make to the achievement of the goals (Land, 1976).
Implementation of successful information technology along with the operational management should bring Azam super market in pole position in their particular target industry. This report is an attempt to find out the importance of MIS in SMEs like Azam Supermarket. It would be arrogant to claim that in particular at this premature stage of digital embracing, that the tough lessons learned in taking customers information products online are directly applicable to specialist publishing markets such as STM. The truth remains that enormous transformation is on the way for information contributors of all kinds, and we have hardly begun to see the effects of it yet. We cannot send away the early facts of changes in revenue portfolios and mainly in the way that customers come up to information online.