Abstract
This document aims to do a critical review on the Baby Time retail store operations management to provide an analysis and evaluation to the problems that are identified and to suggest a feasible solution to handle the identified problems. The areas concentrated on are the stock maintenance, delivery of goods to customers, Billing and maintaining the faulty products under warranty.
The report absorbs and identifies that there is no proper mechanism to record the Stock movement. The manual entry of records causes major delay. There are various issues identified for further consideration and counteractive action by management and this paper explores the operations and practices that presently exist at the store. Accordingly, few problems have been identified and recommendations are made consequently.
Organization Background
Baby time is a retail and online store established in 1989 deals with all kind of baby products, accessories and equipment. The store stocks all famous baby product brands like Babystyle, Concord, Quinny, Maxi-Cosi, Britax, I-Candy, Graco, Maclaren, V&M, Baby Bjorn, Cosatto, Phil & Teds, etc. under one roof.
Baby products and equipments play an important role in the families. Normally in UK, it is a rule that the babies must be carried in the push chairs and when travelling in the cars, proper car seats must be used for the safety reasons. Also other accessories like baby cots, cot beds, baby blankets, bath tubs, toys, etc, are often purchased in the families.
According to the babies’ and children’s toiletries products market research, the market for baby accessories increased by 8% from 2007 to 2009 to an estimated worth of GBP 358 million. Increased growth of child population and parent’s interest in providing very best products to their infants and kids, safety of children, rising attentiveness about the correct ways of parenting are considered as important drivers for the development.
(http://academic.mintel.com/sinatra/oxygen/display/id=394606)
Baby Time sales all the baby products under one roof for almost 20 years and has huge customer base in UK.
Problem Statement
This paper explores the operations related to the BabyTime retail store. The operations of the Baby Time store can be classified as
- Management operations including store maintenance and administration
- General sales including managing if till and receipts
- Customer Service
- Inventory management
- Operations related to promotions
When exploiting the operations of the store, it is identified that there is no proper co-ordination between these major operations. In the present situation, it is very difficult to imagine any organization or business performing high without proper information system. A proper information resource management system or method is required to maintain the equipment, facility, property, capital and employee of baby time. The implemented system should replace the old fashion paper work.
Retail industry is the business mush involved with the information systems and Baby Time is also one among them. But the issue is that the system doesn’t have a systematical information management process. If the company can implement a system or software that can link all the operations of the store and remove the errors like repetition of information and redundant activities. Therefore it is recommended to use the computer based information system to replace the old fashion paper work and excel based spreadsheet methods.
Operations Management
The main aim or goal of organizations revolves around either production and or services. In general the operations are apprehensive to productive activity and operations management is related to ensure that such productive activities are carried out effectively and efficiently. The dictionary explains the meaning of operation as �[the] way a thing works; piece of work; military activity; surgical work”. If we observe closely, the common elements are activity and work, which in turn can be defined as purposeful activity, so the management of operations can be defined very simply as the management of work, or more precisely as the management of any productive activity. Operating effectively is usually taken to mean operating a way which achieves the desired output. Management control is concerned with ensuring that this happens, but is also concerned with efficient use of resources, i.e. at lowest reasonable cost; thus operations management can be defined as �ensuring that productive activities are carried out effectively and efficiently” (Galloway, 1996).
In big companies operations management plays crucial role and acts as an important functional area. The operations management has so much important as it deals with customer satisfaction and often expressed in terms of providing value for money. Operations management is therefore significant to any firm’s success.
The goal of good operations management is to ensure that the customer gets the best product or service, at the lowest cost. In summary, knowledge of operations can on an individual scale:
Improve our purchasing power by increasing our awareness and discrimination;
Improve our personal effectiveness and efficiency in work and in using services.
And on a national scale it can;
Improve the competitiveness of manufacturing and service industries, and thus benefit the national economy (Galloway, 1996).
Discussion
The success of a retail store like baytime normally depends on a good plan that’s been executed well. The structure of a retail store can be consider as an interesting mixture of management and store employees who collectively work for the success of the business by executing various tasks.
The operations of the store that include receiving the goods, handling the stock in the store like moving the goods from storage to the shelves, arranging them properly for display to customer, re-arranging the items that were discarded by the customers, billing and checking out the customers.
So it is better to understand the problems linked to the store execution and must include the factors that manipulate the quality of execution that affect sales and overall satisfaction of customer.
The operations of the store play significantly important role than any other aspects of retail business (Salmon, 1989). If the store operations execution fails then customers won’t be able to find the products they want even if the product available in the store (Raman et al, 2001a). According to the report by Raman et al in the year 2001, around 65% records pertain to inventory were in accurate and 16% of stock is missing from the shelf even if it is available in the store. These kinds of issues are mainly due to improper processes of management in handling inventory, merchandise and employee turnover.
Three approaches related to inaccurate inventory problem were pointed by DeHoratius and Raman (2003)
1. The root causes have to be identified and eliminated and prevention has to be taken
2. The errors has to be identified and corrected by proper inspection polices.
3. A proper software solution needs to be integrated in to the inventory management.
Ton and Raman (2004) show that if the store handles more and more verity of products in higher quantity then there is a great chance of the stock not displayed in the shelves but available in the back room and not reaching the shelves and so subsequent loss of sales. Corsten and Gruen (2003) explain the basic and fundamental causes for the out of stock issues and explain the mechanisms that can solve the issues of stock handling and improving sales.
Empirical evidence was provided by Ittner and Larcker (1998) regards to the satisfaction of customer that is directly associated with various levels of business-unit and firm level operations. But they also point the negative relationship between profitability and satisfaction.
The sales per labor hour is directly affected by customer satisfaction (Sulek et al, 1995) and Babakus et al. (2004) establishes a link between customer satisfaction and quality service operations of the store and find that proper, organized operations has a major impact on store-level profit. So undoubtedly there is a close relationship and link between management practices to productivity and the performance of a company (Wall, 2005)
To summarize, based on different researches, in the view point of customer satisfaction employees are considered as the facilitators of the sales who will be considered as critical factors by helping the customers in detailing about the product, brand and price and also navigating the customers in the store to different shelves, showing the product, explaining it and cross-selling.
Operational management is a subject that uses sophisticated analytical methods to create better decisions. It is utilized for issues related to the execution and co-ordination of the operations within an organization. The study of operations management generally involves the development of a scientific model that attempts to abstract the essence of the real problem (Hillier and Lieberman, 2005).
As the rivalry in the service oriented business turns out to be more and more technology oriented, and as the customers won’t be able to give the direct feedback about the service, the companies themselves had to analyze and asses their level of service otherwise they may have to lose their customers to their rivals who provide good level of service. To be a successful organization, companies need to combine the traditional tools of operations management along with fresh ideas to provide high quality service.
The purpose of the operations management is to create and deliver the goods and services to the customer. Operations management consists of �systematic direction and control of the processes that transform resources (inputs) into finished goods or services for customers or clients (outputs)” (http://openlearn.open.ac.uk/mod/resource/view.php?id=161697).
These operations or functions can be viewed differently by splitting each operation in to various processes called process view. This process view is said to have more advantages then the regular functional view as it concentrates more on customer satisfaction.