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Primark Stores Limited is a major clothes and linens retailer in the UK and Republic of Ireland with over 200+ branches including other European countries. Primark commenced its initial operations in 1969 under the name Penneys in Ireland, were it still runs its Head quarter operations. It is also a subsidiary of Associated British Foods plc. It has become a well established family name in recent years
From the first Penneys store in Ireland to the latest flagship store in Liverpool, the Primark story has been one of continuing success founded on a unique combination of fast fashion and lean operations. Since its inception in Ireland Primark gradually increased its stores across Great Britain which it predicted as a major market in the retail industry especially in the European region. The prediction turned out to be a success story where the number of stores increased gradually and targeted all the key high street regions.
Primark has set a benchmark for many companies to follow in a segment of the market labelled the value sector. The company was founded to produce clothing that is value for money, in other words you are paying for the quality of the product and not for the label that come attached.
Primark currently caters in the following regions in Europe with a total of 200 plus stores and further plans ongoing for future expansion and renewing existing stores.
The objective of this report is to highlight key areas of operations at Primark and it various approaches. The areas cover in this report includes Establishing customer requirements, operational activities, controls and evaluations and progressions etc.
Establishing Customers Requirements
Operations management involves managing activities associated with production and distribution of goods and services. While producing and distributing goods and services, a manufacturer should have a goal to accomplish and strategies of achieving it (Shim & Siegel, 1999). Primark stores ltd is an organization which is the largest clothing retailer by volume and the best budget store on High street in Great Britain according to All business (2009). The store establishes its customers' requirements through market segmentation which entails establishing a target market in which to sell its products. Target marketing enables Primark to position itself and its brands against competitors in the clothing industry hence increasing its sales.
There are various ways of segmenting a market such as; based on geographic conditions, demographic, psychographic, behavioural characteristics among others (Proctor, 2000). Primark segments its market according to demographic factors such as; age and gender. It targets customers of below 35 years of age and mostly females in high street locations (Allbusiness, 2009). Its clothes and designs are simple, of high quality and cheap and it offers the most popular sizes although recently it offers apparels and accessories to all human sizes (Fabe, 2008). Target marketing enables organization to employ the best market mixes and hence reduce wastages and maximise profits (Kotler & Armstrong, 1999). Primark doesn't advertise its products hence reducing operation costs.
Primark has been listed in the forefront in the past and during recent times of exploiting child labour through its supplier's who have been inefficient to heed for basic law. It is also accused of exploitation and abuse of labour force and poor work conditions (Fabe, 208). This impacts negatively on its image and may discourage customers.
Primark has taken steps in order to tackle this issue by terminating its contacts with suppliers who are identified to repeat the same error and violate its ethical values.
Operational Systems and Processes
Customer satisfaction is the ultimate goal of all organizations. The operating systems and processes are therefore geared towards satisfying customer needs. According to Muffatto & Panizzolo (1995), planning, design and monitoring are the processes required for a company to achieve customer satisfaction. Inappropriate choice of process leads to poor performance. Primark has established different branches in different countries ensuring efficient distribution and thus satisfying customers. Recently, Primark has partnered with Island pacific to install high value innovative software that assists in customer and vendor relationship management, merchandising, point of sale, planning and demand forecasting. Shim and Siegel (1999) argue that these processes comprise operations management which assist in customer satisfaction.
Primark is involved with batch processing which entails clear identification of position of markets its dealing with and thereafter setting operation functions in line with the market. Galloway (1993) observes that batch processes are the best as they satisfy an order easily and can cope with minor changes without difficulty. It is also a member of ethical trading initiative and has established a code of conduct for its suppliers to ensure ethical standards are maintained (Primark, 2010).
Primark focuses on value of product in term of low price and good quality as stated in its slogan, "Look good, pay less" (Primark 2009). In order to deliver its promise, many resources have been used which can be described as follows:
Skills and knowledge of human resource from both internal organization and supplier sides play an important role to drive primary and support activities in effective way.
Customer service employees are trained to handle buyers effectively. An unsatisfied customer who has a complaint resolved is source of positive word of mouth thus attracting more customers (Stauss & Seidal, 2005).
Acquiring many prime locations for its outlets in many countries such as UK, Spain, Ireland, latest in Germany and Portugal which deliver convenience to customers and also provide cost saving and increase opportunity to make the profit to its business.
Primark is a lean business organization that caters for customers needs (Primark, 2010). Its operations are based on giving value to the customer while eliminating waste such as; excess inventory, overproduction and underutilized staffs (Carreira, 2005). To ensure quality, each finished part is examined after manufacture and defects identified and returned to production line for rectification. This ensures smooth flow of the process until the desired product is achieved. Lean technique thus enables Primark to satisfy customer requirements.
Capacity is the volume of output produced at a given period and the ability of a facility to handle the production. It enables a firm to identify the amount of materials required for optimal production so as to avoid overproduction or delay in production. Short-term capacity planning includes; offering overtime, increasing shifts, hiring casual labourers, subcontracting facilities, modifying output and demand (Inman, 2010). Long-term capacity planning includes opening new branches or adding capital equipment. Inman (2010) identifies four techniques of capacity planning; use of overall factors, capacity bills, resource profile and capacity requirements planning (CRP) used in conjunction with manufacturing resource planning. At Primark capacity planning is identified through its historical data, government statistical information and immigrations statistics. Since its 40 plus years in trade, Primark has adopted various tools and methodologies to overcome any crisis or shortage in its product availability.
Primark utilizes a web-based planner across the board to eradicate any shortage and a tool for multiple functionalities such as:
Supply chain audit
Performance management system
This formation helps the management to extensively and independently monitor and audit its programmes. Computerized customs clearance, dedicated warehousing and distribution services facilitate stores in their control of stocks to support sales. Computerized up to the minute sales and stock information, by size and colour is available to management at any time.
Primark has always shown commitment to having the best form of solutions to internal and external consumers. At the same time maintaining quality and competitive advantage over other retail fashion competitors.
Primark stores are mostly used for distribution of clothing through the form of retails stores, while manufacturing work is subcontracted abroad. The process of manufacture involves assembly line until a product is achieved. Finished garments are distributed to Primark stores by suppliers. Primark stores across all the stores have a similar layout presented, regardless of various location; its customers find it convenient to make purchase as the layout made available in all regions remaining the little or unchanged. It employs top trendy designers who have been with for a long time to setup layouts for any new outlets and refurbished ones. The layout is sectioned with reference to departments, internal staff identify product by its Kimball number also referred as the bar code number. The current sects and brands in use as follows:
Baby wear (Early days)
Girl's wear (Young dimension YD)
Boy's wear (Rebel)
Ladies wear (Atmosphere
Lingerie (Secret possessions)
Men's wear (Cedarwood, Denim and Butler and Webb)
All stores are generally run by the following set of staff representing its outlets:
Retail sales representative
Stock control assistant
Back office staff
Human resource team
Scheduling entails resource allocation to tasks in order to achieve objectives. It is a decision-making process regarding the best mix of resources and tasks (Pinedo, 2008). After capacity planning, scheduling is carried out to make sure raw materials and resources are available at specified time. At Primark, the suppliers are given instructions regarding quality production, product specification and lead time (Primark, 2010). It's upon them to use resources and deliver goods in time according to set time target in order to satisfy customer requirements.
It entails management of sales, purchases and payments to control operation costs. According to Cheng & Choi (2010), Primark uses Global Quick Response (GQR) to manage inventory. Primark offers different new fashions frequently hence has high stock turnover. It uses "advanced inventory management and tracking systems that monitor movement of goods on hourly basis in all stores" (2010: 56). It has also advanced warehouse facilities that enable flexibility, speed, productivity and low costs and large scale global contracting. The major advantage of Primark in terms of inventory:
Internal warehousing support maximum storage for key goods, slow moving products stored directly in store shelves.
Dedicated staff allocations for stock control enables accuracy of inventories and minimize damages and losses.
Higher turnover reduces the worry for capital tied up.
Primark sales mainly depend on an hourly and daily basis. Due to change in the pace of the fashion industry and Primark's capability of renewing fashion through its fashion designers it sticks to a certain type of design for a short term and creates immense demand which eventually attracts more sales and inventories covered.
Monitoring and Evaluation
Monitoring involves assessment to check whether goals are being met while evaluation is analysis of progress towards meeting objectives. Monitoring and evaluation are used to measure the performance of a business in the global market. Primark monitors and evaluates its operations based on the ethical trading policy which emphasizes on quality without oppressing workers (Primark, 2010). It values human rights, employment conditions, business practices and suppliers. Suppliers have a code of conduct to govern their operations and frequent audits are carried out to establish whether they are conforming to standards. Performing suppliers are given high volume orders. Audits are used to establish turnover level, production process and share of supplier's production. These determine whether Primark will be able to meet customers' requirements as its performance depends on the suppliers. Recently, Primark has acquired Entropy supply chain monitoring software from BSI systems for auditing (Primark, 2010).
Primark stores ltd is a leading retail chain in GB that offers high quality inexpensive clothes to young people located at high street areas and with various branches in Europe. Primark has own strong brands which also source for the organizations performance and productivities. Now days many of the branches of Primark's are situated in every town and high street in UK, so that every customers can gets easily accessible required products. Low prices and best quality's also helping in performances of the Primark
Operations management in the supply chain entails lean techniques and all activities are directed by customer needs or values. It is a member of ethical trading initiative that takes care of workers needs and its suppliers are governed by a code of conduct and are audited frequently to monitor progress. This ensures labour standards are maintained and employees are not exploited.