Evaluating strategic objectives of functions management within the organization: The chosen traditional business is a local supermarket called "Istanbul Supermarket" situated on City Street. The supermarket provides variety of food and non-food products. The start of the statement will verify Istanbul Supermarket's operation in detail by using 4Vs and the last mentioned will be about its competitor "Old Avenue Central Shop" a local supermarket near Old Road tube train station on City Road.
The operation of Istanbul Supermarket is a tiny retail supermarket offering food and non-food products in a one floor shop. Many inputs are being used in to the local supermarket procedures. Inputs can be divided into four categories. First, the materials used in the operations are goods for sell that happen to be food and non-food products. Second, human inputs, there are 9 employees in total including cashiers, stock clerks and managers. Customers are the most crucial human type in the supermarket operations comprising local customers and Asian people. Finally, information and technology, these inputs used in this operation are very simple. Store size is relatively small so the price and stock data is principally maintained by people's recognition and memory. There are only two cash machines and one computer in operation for product charges and checkout. Finally, there are many facilities included as the inputs which are air-condition, automatic entrance doors, music, lavatory and they provide Oyster service, mobile top-up and E-pay services.
The general reason for supermarket is to provide various types of products to serve customers' needs. Thus, the end result of the operation is the combination of customers and goods bought from the store, implying that customers are content with the provided goods to fulfill their needs. The nice services and standard tips of the staffs through the purchase are also essential.
1. Purchasing and Delivering Process: Buying process depends on how fast the merchandise are sold which is particularly very simple process. Presently, there are just 4 suppliers for Istanbul Supermarket where they made advanced purchase for day-to-day delivery for deli sandwiches, dairy and bread. Fruit, veggie, and other standard products are ordered straight from Cash & Carry or wholesalers using its own truck once a week. Dry out foods and bottled waters are found form Cash & Take twice weekly.
2. Inventory management process: Istanbul Supermarket only retains the product on shelves segregated by product categories. The brand new delivered products are out of the blue stored in the shelves. They enough time inventory by causing a purchase only when particular products are practically out of stock.
3. Shelve screen process: According to the Istanbul Supermarket, there is no specific strategy for shelve display. Most of the products are organized according with their categories and brand. Fast-moving and popular products are stored in the convenience place for grab.
4. Sell goods process: The ultimate procedure for Istanbul Supermarket is the sell goods process. The inputs are being changed to guarantee the need of customers.
Istanbul Supermarket Operation:
In order to spell it out the operation of Istanbul Supermarket, the four characteristics, 4Vs, of demand is adopted to explain the way the process be managed referring to Slack, et. al. books (2006). This part will be the analysis of the way the 4Vs involved with each procedure for Istanbul Supermarket.
Ordering and Delivering process is determined by the volume of products sold. Originally, they place an order with suppliers for milk, bakery, and deli sandwiches with specific amount and also have them delivered every morning. Other products will be purchased and found by the stock clerk from Cash & Hold, a huge wholesaler for local supermarket. Usually, the order level is dependant on the prior sell record and the amount of inventory. This involved with high volume but relatively low variety for every kind of products. For example, there are only three types of milk nevertheless they are sent at considerable amount. Even though the demand for every single product is varying and unstable, Istanbul Supermarket continues to be struggling to keep a great deal of inventory anticipated to lack of inventory space. They only fill in the empty racks by purchasing products from Cash & Take and sometimes, they need to let some products out of stock. However, this technique is not obvious to customers.
With their limited inventory space, the inventory management process is involved with a low quantity but very high variety of products to ensure that there are at least extra of each product when they run out of stock unexpectedly. A good supermarket has to ensure that there surely is no vacant shelve for every particular products. The variance in demand is also crucial because the store has to cope with standard seasonality of customers' needs, thus it's important to have many varieties of product ranges. Customers are not obvious in the inventory management process.
Shelve display process is very important. The general purpose is to appeal to the customers with high presence and high variety of products. Products are evidently obvious to customers and in order to make it easier for customers to discover a particular product, Istanbul Supermarket has arranged the shelves according to the type of products with a high variety of every product category and relatively low level. For example, there are various brands of potato chips and biscuits on the cabinets. In addition, there exists high variation popular for each individual person. Some individuals quickly drop by and grab convenient products but some of them are looking for fresh or iced foods, and baking elements, thus, Istanbul Supermarket has to design shelves screen for consumer's convenience where convenient and fast-going products would be positioned along the entry and on top the aisle and the rests are positioned according to their product types and brands.
Sell goods process involved with an extremely high variety of products and relatively low quantity since each individual often buy a single little bit of different kind of goods simultaneously. The variation popular and visibility is seemingly high in this process. The goods sold reflect the necessity of every customer. The demand for customers is arbitrary according to their preferences. They could not choose the same thing at the same amount each day.
In the entire local supermarket operation, Istanbul Supermarket's operation generally met the quantity and variety requirement where there is relatively low level and high variety. Supermarket often offers various varieties of product types to cover the basic need of customers and also to serve individual choices. For Istanbul Supermarket, they provide different kinds of food products ranging from dairy products, bread and bakery, potato chips and biscuits, freezing foods, canned and dry out foods, fresh fruits and fruit and vegetables, and Asian foods such as noodles, Asian soups, Asian options, and ingredients. There are also different sorts of non-food products including toiletries, kitchen products, cigarette, and health and beauty products. Not only there are numerous sorts of product types offered at Istanbul Supermarket, they also offer many brands in each product types.
Systems to ensure quality of product and services: Majorly Process Type, Design, Technology, and Job Design
Process structure can be defined in customer-contract position and product-process position. However, in Istanbul Supermarket, it is difficult to design the operation type as developing or service. For most food manufacturers, the key processing process type is batch process with medium amount and variety. They produce a variety of sorts of foods corresponding to preference, color, consumer eating habit, and packaging. Because of limited capacity and resources, Istanbul will not produce its own private label products, so they are not manufacturers. But their products hugely rely on the meals manufacturers in batch process, so Istanbul, ґs process type is more or less batch process. Istanbul is more like something shop reselling consumers goods, providing Oyster, mobile top-up, and E-pay services. They sell different kinds of foods based on consumers, ґ different eating habits and preferences. This is some sort of customized service they provide. In words, Istanbul, ґs process is thought as mixed process structures, median customer participation, high resource overall flexibility, but low capital intensity.
Information and communication have important influences on business functions, decision processes, and trading-partner relationship in food retailing. These mixed together as local supermarket operations can affect productivity at the store level with different store size and format. Istanbul supermarket has limited information and technology, and stock-keeping products (SKU), a listing management system that permits the store to systematically monitor its inventory or product supply. In food dealer store, many products are fresh food with a shelf life of the couple of days and need to replenish cabinets daily or several times each day; others are consumer durables with longer display time. Technology can be implemented to manage display and inventory keep track of. However, there is merely basic technology found in the store, two cash machines and one computer in the back-office, therefore the store need to improve the technology with limited capacity need.
Istanbul Supermarket, s process layout is the blend of functional layout and cell structure. In functional layout, same resources are located together and various items take different flows. In Istanbul supermarket, products are shown according to different functions. The best inside area is for non-food products, such as home goods, health care items, and toiletries. There is a tiny room for Asian foods, which is the uniqueness of Istanbul Supermarket getting a lot of Asian customers. Because of the same need of frozen cupboards technology, holding iced vegetables, junk food, and seafoods are displayed mutually. Another competitive benefit of Istanbul comparing to its rivals is its selling of fruit and vegetables, which are viewed in linear shelf space alongside one another to catch the attention of customers. Furthermore, cell structure also appears in Istanbul Supermarket. Cell structure is suitable for similar process need and less problems with intricacy and efficiency. Essentially the most front side shelf of Istanbul is utilized for breads, sandwiches, treats, and drinks. The cell layout plays a part in consumer, ґs convenience by providing foods to folks who are in a rush.
According to Slack et. al. , (2006), job designs in low size and high variety process are directly defined with wide-ranging department of labor, undefined jobs with decision-making discretion, and job dedication is task based mostly. In Istanbul Supermarket, there are 9 employees with 3 cashiers, 2 stock clerks, 3 professionals and 1 operating managers. All of them has quite similar simple tasks, and there is high job versatility as people can work across their own responsibility. The manager is also the owner of this store, and he has close romantic relationship and communication with other staffs. As a result, there should be more specific division of labor so that employees have more responsibility because of their own job.
Strategic obstacles for Business local Competitor: Old Block Central Shop.
Plenty of local supermarket operating along the town Road, Old Block Central Shop is selected as main local rival for Istanbul Supermarket. Both of these are situated on City Highway where Old Road Central Shop is near to Old Street tube place and beside Starbucks while Istanbul Supermarket is just about 500 meter away. With all the proximity of these location and similar standard products sold, they are considered competitors.
In standard, inputs for Old Avenue Central Shop act like Istanbul Supermarket nonetheless they add non-food products like stationery, souvenir, mags and paper. However, Old Street Central Shop offers significantly less variety in the food category. The store only has one procedure director and 4 employees. Old Street Central Shop customers are different group. Since it is located near tube train station, almost all of them are workers and non-local customers. The outcome of the procedure is also the positioning between customers and goods to ensure customers satisfaction and serve their needs.
The basic process at Old Street Central Shop is relatively similar to the Istanbul Supermarket. However, there are currently 10 suppliers. Since you can find more product types offering, the store has to deal with an increase of suppliers. Daily delivered products are newspaper publishers and newspapers. They purchase presents, souvenirs, and stationeries from Cash & Take every month. The way they manage their inventory is however, quite not the same as Istanbul Supermarket. Old Road Central Shop has bigger inventory space where they store inventory separated by the categories and brands but almost all of the merchandise will be placed on the racks in full. The shelves screen pattern is dependant on product category and the level of popularity of products. In each category, products within the same brands are placed together and separated by their sub-category, features and sizes. Lastly, the sell goods process is to meet consumers demand.
The businesses of Old Neighborhood Central Shop are referred to using 4Vs and in comparison to those of Istanbul Supermarket. Old Block Central Shop shows a comparatively higher amount and lower variety in placing your order and delivering process. Most of the products have longer stay days and nights so that they can order a considerable amount simultaneously. The larger inventory space can be an advantage. The volume of inventory is specially higher where they can store more product systems and decrease the order and delivery rate of recurrence. The variability in demand is higher in the inventory management process as it is mixed up in seasonal change and unforeseen demand from vacationers or non-local customers. For shelve display process, both stores have the same level of visibility. Sell goods process is inarguably similar for both stores where the advertising process is very highly obvious and trustworthy on demand deviation. It involves in a very low level and relatively high variety for one purchase.
Consider the quantity and variety requirement of Old Road Central Shop, it has similarly low volume level and high variety. Its high variety of non-food products such as newspaper publishers, mags, souvenirs, and stationeries does not accounts much for the upsurge in sale quantity. However, the Istanbul Supermarket has higher sales volume due to its high variety in foods attracting residents as well as Asians people living near by.
Comparing the procedure kind of both Istanbul supermarket and Old Avenue Central Shop, both of these have put together process types of batch functions and service retailers. As both intake foods and other products that are produced in manufacturers in batch process. Furthermore, both provide other services aside from offering products. However, Old Block Central shop just provides mobile top-up service. On this aspect, Istanbul Supermarket gain more client satisfaction. Alternatively, Old Road Central Shop is more proficiently operated with its technology as they have barcode scanning system. Istanbul has two cash machines and simple rates machine, without barcode scanning system, it uses longer time for checkout and problems possibly occurred by cashiers' problems. However, even though Old Avenue Central Shop has barcode scanning system, it still lacks in technology for inventory management. Thus, both need to improve their machines, equipments, and devices at affordable costs. The design of Old Street Central Shop is clearer than Istanbul as they have less variety of products. Due to its prime location near pipe stop and bus stop, its main shelf space is good for drinks and snack foods. As shows in Exhibit 2, it has another shelf for milk, and a brand shelf space for drinks and alcoholic beverages, and a series shelf space for snacks such as dried out food, biscuits, and chocolates. Discussing job design, Old Neighborhood Central Shop has broader section of labor and relatively low job versatility as it includes only 4 employees for your store.
Improve organizational performance: Recommendations:
Small food store operators know about growing competitive pressure from bigger sellers. What they feared most using their company competitors are wide assortment of products, low price of dried out groceries, location of their competitors, and the attractive with their physical facilities. The key to retail success is to align core retail techniques, possessions, resources, and flows of information and products to strive for maximum balance among each one of these critical elements. For Istanbul Supermarket, the current operations are stable and controllable by managers. However, far better and profitable businesses are in expectation. Based on the current different techniques, design, technology, the most necessary advice and improvements concentrate on new information and technology system, buying and delivering processes, and inventory management.
In order to maintain customer satisfaction, retailer should make sure over 95 per cent availability of products. Barcode scanning is important as it permits managers to trail both at the pallet and circumstance lever, and at the checkout. Professionals can adopt slim thinking in modernizing its resource chain, and this can help minimize stock holding, reduce lead times, increase food SKU, and maintain high service levels. IT system is essential for store management, and the primary objective of It really is to give attention to customer's benefits. Information and technology employed by retailers includes data-mining techniques, general market trends, scanning data, and loyalty-card programs. However, for the Istanbul case, IT systems are too costly and complicated to carry out with limited capacity and resources. Therefore, the simple improvement is to use barcode scanning system as they already have computers. They are able to buy a barcode scanning device and software for retails with significantly less than 600, with significantly beyond the rates profit, also for stock monitoring in order to reduce stock and ensure supply. This simple system is beneficial and deserving as it enhances comfort and reduce fatigue.
As inventory presents a huge percentage of total assets, vendors are paying close attention to inventory productivity. Inventory is good as it could help to ensure certainty and flexibility, and allows benefit of short-term opportunities. However, overabundant inventory is bad since it ties up money and it is costly credited to obsoleteness and high administrative costs of storage space. More seriously, based on item-level models, there is a negative relationship inventory turnover and gross margin corresponding to price changing and service level. As a result, the optimal volume being ordered explained as Economic Order Amount is necessary. For Istanbul, the most products they stock are dried food, iced food, and non-food items. It includes only one fridge in store, so they have to limit the holding quantity of iced food to fill the refrigerator. For dried food and non-food items, retaining cost relates to expiry and having space, and order costs are related to delivery cost and order quantity. Consequently, the best way is to order in relatively high quantity as this has lower inexpensive price and ensure availableness, but make sure you limit the quantity in space for storage. Using 'the ABC system' is rational for Istanbul, as it could stock more low consumption value products such as non-food items but stock a small advertising with high consumption value products such as frozen foods and other conventional food.
According to the survey of 102 households in central-city's super fruit and veggie needs, it revealed that higher fresh vegetable availability within 100m of any dwelling was a positive predictor of vegetable intake, but fruit availability had not been related with consumption. Because of the perish ability of the fresh foods, Istanbul Supermarket staffs pick up by themselves every week from wholesaler to guarantee the freshness and availableness. In order to reduce throw away cost, Istanbul Supermarket is way better off making a study from neighborhood home to improve their service and food availability. Here, supply chain management is necessary in order to lessen or eliminate uncertainties in either shortage or redundancy. Istanbul must shorten its purchasing lead times, reduce its batch size, and decreasing cost of handling orders. Despite top quality products, there a wide range of private label foods. Thus, it will control the quality, dependability and stability of suppliers. Single-sourcing or fewer suppliers might be logical because it ensures stronger relationship, lower price with potentially better quality, and high dependability.
In words, each one of these process are related to consumer satisfaction in quality and price. In such a competitive industry, even though there are many large supermarkets, most people prefer to go to the nearest food retail store for convenience. However, people are considering the lower prices provided by supermarket. So Istanbul Supermarket must reduce its product price by more efficient inventory management, ordering and delivery process, and better information and technology system with affordable capacity use.
Implementation Task Planning
According to Slack, et. al. 2006, "project planning process determines the activities, length, resources, and how the work is allocated". The first step of project planning is to identify the actions. This job can be break down into three key activities and seven sub-activities as provided in Amount 1. The next step is the estimation of that time period and resources as provided Number 2 and the third step is the estimation of dependencies among activities. This activity dependencies will be drew on Non Network Diagram.
Figure 1: Step 1 1: Work Breakdown Structure
Select Businesses Area.
Target Interviews and business understanding.
Design the scope
Analysis of problems and execution plan
Review the Implementation
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