INTRODUCTION
Operations Management is the corner stone of the world in which we live. It is the involvement of all those with managerial responsibilities in any organisation, as they manage ‘the physical resources necessary to create sufficient quantities to meet market requirements’ (Mapes & New; 1987 cited Johnson 1998:7). The actual management of these operations is ‘concerned with design, planning, control, and improvement of the use of resources to produce goods and/or services for customers’ (Slack et al 2004)
As we all know, Tesco’s is Britain’s leading retailer and is the one of the three top retailers globally operating over 3700 all over the world in 13 different countries outside the UK including Ireland. (Tescoplc.com)
Every organization has an operations function as every organization produces some type of products and/or services(slack 2004,pg4). Tesco’s operating system is the driving force for the way it is run and this will be explored with attentions being paid to how it delivers its products and service to its customers.
There are several concepts that apply to operations management four of which will be explored, and demonstrated through the application of these concepts to Tesco. This report will exhibit the importance of managing operations within an organisation.
“People are definitely a company’s greatest asset. It doesn’t make any difference whether the product is cars or cosmetics. A company is only as good as the people it keeps.”Mary Kay Ash
TESCO & it’s BUSINESS CONTEXT
Tesco started off as a grocery stall set up in east London and owned by Jack Cohen in 1919 and 10 years later they opened its first store in Burnt Oak. In 1947 TESCO’s stocks were traded on the stock market and between the 1950-60’s Tesco’s grew organically until it owned 800 stores. On the 21st March 1997 Tesco purchased the retail arm of Associated British Foods, later that year Tesco forged an alliance with ESSO the petrol filling station and in 2003 Tesco launched mobile phone & landline services to compliment their internet service (tescoplc.com)
The operations of Tesco can be put into two main categories, core functions, and support functions. The core functions of Tesco as a business are its products/services development function, operational functions, marketing functions. The supporting functions of Tesco’s operations are finance and accounting, human resources and training, IT and MIS, purchases, sales, recruitment, operations, and customer care.(see appendix A)
TESCO’s Core Functions
The products and services development function ‘is responsible for creating new and modified products and services in order to generate repeat purchases and customer requests for service.pg 4 slack 2004. For example the activities that the managers responsible for food product development in Tesco may develop their food products to ensure that they are healthier which contributes to the lifestyle change of the general public and these changes can play a role in the Marketing function as this department which is responsible for communicating the organization’s products and services to its markets in order to generate an increase in customer spending habits, will then be able to devise a campaign encouraging healthy eating or financial rewards, for example the most recent Tesco campaigns have been that you don’t have to spend a lot to enjoy life’s little pleasures through their ‘double club card points campaign’ which allows club card members to use their point to buy cinema tickets, and tickets to some of the UK’s top attractions. The operations function within Tesco
TESCO’s Support Functions
ANALYSIS
Tesco’s Total Operating System
Tesco is a decentralised organisation, the responsibility for decisions to be made are spread across the various levels of managers. There are regional managers who are responsible for making decisions regarding that particular region and every store within that region has a branch manager who makes all the decisions concerning that store including recruitment. The advantages that this has on the operation of Tesco are that with each more senior level of management they are able to concentrate on more important areas, this also encourages local/branch managers to be more innovative and motivated, the lines of communication between the various levels of authority are simpler making it easier and more effective for things to get done in terms of staff and lower level managers having a better knowledge of how their branch is operated and can see where improvements can be made which also gives way to all staff being more involved and having the opportunity to develop their management skills.
The role of operations functions……
The tasks for the operations manager in Tesco are to control processes, costs, technology, staff, and activities. The tasks of the operations manager need to go through some kind of transformation to achieve the objective, the model used to explain this is the transformation model (see appendix C) This model takes into consideration Tesco’s macro and micro environment, where it ‘takes inputs from its environment and through a series of activities a transformation takes place to achieve an output’ which is the achievement of an objective pg84 BE book. An example of the transformation model used in a Tesco branch is as follows: