Operational Management case study. The author has attempted to view the case study through the prism of Operational and supply chain management and critically evaluates how Marsden community Stores has transferred the valuable operational concepts.
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The author has attempted to view the case study through the prism of Operational and supply chain management and critically evaluates how Marsden community Stores has transferred the valuable operational concepts. Marsden Store is a grocery chain with 215 outlets located in the major towns and cities in England with an average size of 6500 sq feet. The USP (Unique Selling point) is the strategy that it has adopted. Niche Strategy, where price, location, convenience, and an adequate product range were seen as major criteria to maintain customer loyalty. The operations in the Marsden community centre can be acknowledged by number of laws operating undercurrent such as Theory of Swift Even flow, law of variability, laws of quality, law of bottlenecks, law of factory, trade-offs and theory of Performance frontier. The author strives to present a balanced picture of Swift even flow and critically examine how the trade-offs are linked with the performance and operating frontier of the Marsden community store. The Supply services department of the store was regarded as the heart of the Marsden customer service drive. The author also attempts to take help of the data and the survey of the gap analysis and pilot research, which gives him valuable insight about the Store in future. "The Theory of Swift Even Flow" and "The Theory of Performance Frontier." Schmenner and Swink (1998) state, "The more swift and even the flow of the materials through a process, the more productive that process is". It means the productivity of any process increases; if the materials can move more swiftly with no bottlenecks and if non-value-added wasteful steps of the process are either eliminated or reduced greatly.
A performance frontier is defined by the maximum performance that can be achieved by a manufacturing unit given a set of operating choices. Asset and the Performance frontier are the two powerful index of measuring the performance of a firm (Schmenner and Swink, 1998). Operational effectiveness and strategy are both essential to superior performance (Porter, 1996). Superior performance in one competitive objective is gained primarily by lowering performance in another (Da Silveria and Slack, 2001). Moreover the law of trade-offs suggest, "A manufacturing plant cannot simultaneously provide the highest levels among all competitors of product quality, flexibility, and delivery at the lowest manufactured cost." (Schmenner and Swink, 1998). For example Ikea serves customers who are happy to trade off service for cost. In the same way Southwest Airlines has trade off all its activities to deliver low cost, convenient service on its particular types of route. Fig: 1 Source: Schmenner and Swink (1998) Journal of operations management 17 (1998) 97-113 In fig 1, There are three operating state for a manufacturing plant according to Schmenner and Swink, 1998. Plant A is underutilized and inefficient. Rationalising resources and resolving inefficiencies lead to position A1, where plant encounters its operating performance frontier. Operating policy changes improve the frontier and move the plant to position A2, where technological and asset constraints begin to affect performance." The author attempts to show the steps taken by the Marsden to improve the operational efficiency of the company. The improvement of operating frontier can be seen in the light of rationalisation policy adopted by the store.
In supermarket Supply service department is regarded as being at the heart of the customer's service drive. Thus the main objective of supply chain is to fulfil customer demand through the most efficient use of resources Right Product in the Right Place at the Right Time for the Right Price Source: Fisher et al., (2000) Harvard Business Review July- August 2000 pp. 117 The supermarket industry is very competitive and one means of remaining so as to reduce cost which may provide a competitive advantage. This might be achieved by adopting both lean and agile strategies. There are five operational performance objectives like quality, speed, Cost, dependability and flexibility which are inevitable for any organisation. They can only achieve if the organisation adopts both lean and agile approach 'Leagile'. Cost is a function of what business pays for its inputs such as materials, labour and facilities. This partly depends on the 4 V's of operations that is; volume, variety, variation and visibility and is also governed by how good the operation is at the other performance objectives like quality, dependability, flexibility. All these theories helps retailers to follow the holy grail of retailing (Fisher et al, 2000); to offer right product, in the right place, at the right time, for the right price, in the right quantity. From the above discussion it seems that Marsden were following the holy grail strategy by offering products in the right quantity at the right time which helped them in captured enormous amount of data that retailers should gather about the point of purchase, buying patterns and customer's tastes.
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