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[OPERATIONS MANAEMENT] July13, 2014
N a t i o n a l I n s t i t u t e o f B u s i n e s s M a n a g e m e n t Page 1
Table...
[OPERATIONS MANAEMENT] July13, 2014
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Intro...
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Metho...
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Intro...
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As a ...
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 En...
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Operations management new

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Decisions of Operations Management
Location Planning
Layout Planning
Supply Chain Management
Product and Service Design
Process and Capacity Design
Production Scheduling
Managing Quality
Maintenance Management
Job Designing & Human Resource

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Operations management new

  1. 1. [OPERATIONS MANAEMENT] July13, 2014 N a t i o n a l I n s t i t u t e o f B u s i n e s s M a n a g e m e n t Page 1 Table of Contents Introduction ..................................................................................................................... 2 Objectives........................................................................................................................ 3 Methodology.................................................................................................................... 4 Introduction to Keells .......................................................................................................5 Analysis........................................................................................................................... 7 Decisions of Operations Management............................................................................ 7 Location Planning.................................................................................................7 Layout Planning ................................................................................................. 12 Supply Chain Management ................................................................................. 20 Product and Service Design................................................................................. 23 Process and Capacity Design............................................................................... 24 Production Scheduling ........................................................................................ 25 Managing Quality............................................................................................... 25 Maintenance Management................................................................................... 26 Job Designing & Human Resource ...................................................................... 26 Findings......................................................................................................................... 28 Recommendations .......................................................................................................... 29 Conclusion..................................................................................................................... 30 References ..................................................................................................................... 31
  2. 2. [OPERATIONS MANAEMENT] July13, 2014 N a t i o n a l I n s t i t u t e o f B u s i n e s s M a n a g e m e n t Page 2 Introduction As the global economy slowly turns itself around and begins its long-term recovery driven by rapid growth in Asia, greater stability in the United States and the Middle East, tempered somewhat by Europe’s continuing economy troubles. Sri Lanka today stands on the verge of success and prosperity. With the permanent peace to the country in May 2009, the Sri Lankan Government has accelerated economic progress through a series of measures such as control of inflation, Reduction of interest rates, encouragement of tourism sector……etc. Therefore today’s business organizations should have to have a well-managed Operations Management strategies within the organization in order to get the maximum output from its employees as well as to increase the efficiency and effectiveness of the day to day work activities in an economical way while reaching the objectives of the organization. It doesn’t matter whether the organization is large scale or small but almost all the organizations should have to achieve their best not because they have to but to survive in the market while achieving the organization’s goals and objectives. So having a well-managed Operations Management strategies are a complete and utter plus point for any organization where every organization is looking for maximum efficiency and effectiveness. To the module “Operations Management” We have been asked to fulfill a report as the end semester assignment on the topic of “Operation Management Practice in a selected organization”.We have chosen “Keells Super” which is one of the leading shopping Centers in Sri Lanka for our assignment. As one of the leading shopping Centers in Sri Lankan market, we had the argument of what would be the operation management strategies of Keells. So it’s one of the best chances we’ve got to study the operations management practices in an organization where we can recommend some other our views points as well. So with that, we are pleased to present the operations management analysis of Keells on behalf of the Operations Management module. By studying this report you would be able to understand the layout, location planning and supply chain management of Keells Super and how effective it has established within the Keells Super.
  3. 3. [OPERATIONS MANAEMENT] July13, 2014 N a t i o n a l I n s t i t u t e o f B u s i n e s s M a n a g e m e n t Page 3 Objectives  To get more knowledge about the practical side of the Operations Management practices.  To learn about the Operations Management of an organization and to identify its effectiveness and weaknesses.  To forecast / predict the future economic situations with regard to the Operations Management practices.  To cover our assignment of writing an analytical report on Operations Management.  To confirm the knowledge which we have learnt by Operations Management module.  To write a report in proper way according to its formal format.  To build good relationship among our group members.
  4. 4. [OPERATIONS MANAEMENT] July13, 2014 N a t i o n a l I n s t i t u t e o f B u s i n e s s M a n a g e m e n t Page 4 Methodology As mentioned in introduction, we have been asked to fulfill a report on “Operations Management Practices in a selected organization” for the Operations Management module. We selected Keells Super for our assignment as mentioned earlier and we have been advised to collect relevant information, study the information we collected and report the Operations Management practices we have learnt/studied with the findings and recommendations. We used following methods to collect information about the Operations Management practices of Keells Super,  Field Visit  Conduct Interviews  Browse internet As the very first step we had a field visit / observation visit to Keells Super which is situated at Galle town, Kaluwella. The Supermarket manager warmly welcomed us, and we were directed to the operations manager, then he conducts a brief seminar about the Keells Super and the keels Supers’s Operations Management strategies. Other than that we browsed internet for the definitions and to find out the details about Keells Super. Finally we analyzed the information we collected with the theoretical Operations Management strategies we have learnt at the university and here we have presented the relevant information with the examples as it is helpful for you to get clear knowledge about the Operations Management strategies of Keells Super.
  5. 5. [OPERATIONS MANAEMENT] July13, 2014 N a t i o n a l I n s t i t u t e o f B u s i n e s s M a n a g e m e n t Page 5 Introduction to Keells The origins of John Keells Holdings lie in a produce and exchange broking business started by two Englishmen, Edwin and George John, in Colombo, Ceylon, in the early 1870s. E. John & Co. was one of a handful of broking companies that helped build tea production and export into the mainstay of the colonial Ceylonese economy. In 1948, the year of Ceylon's Independence, E. John & Co. merged with two London- based broking companies to form the private limited company of E. John, Thompson, White & Co. Ltd. Business opportunities in a fledgling post-Independence economy spurred growth and expansion throughout the Fifties and Sixties. The name that is now synonymous with Sri Lankan business leadership came into existence following the acquisition of another Colombo broking company, Keell & Waldock Ltd, in 1960 the resulting entity being named John Keell Thompson White Ltd. As Ceylon modernized, becoming the Republic of Sri Lanka in 1972, social and political change helped drive John Keells' expansion and diversification. The growing economic importance of travel and tourism was reflected in the acquisition of Walkers Tours & Travels, the leading inbound tour company of the time, and the Mackinnons’Group, which had extensive interests in shipping. Thus began a process of diversification that has resulted in today's 70-member conglomerate. The parent firm, now known as John Keells PLC, became a public quoted company in 1974. In October 1986 a newly incorporated John Keells Holdings Ltd. (JKH) acquired a controlling stake in John Keells Limited and obtained a quotation on the Colombo Stock Exchange amidst a heavily over-subscribed public share issue. A leading supermarket chain in the country which has been in operating for the last 20 years and has been focusing on offering the best in range, quality products and services to our valued customers reaching out to a cross section of Sri Lankan consumers. Currently they have 45 supermarkets and rapid expansion plans are underway to make their presence felt in more locations. The wide range of products include groceries, essentials, meats, vegetables, fruits, bakery, dairy, household, toiletries and home-ware such as linen, books, stationery, pharmacy and beauty counters at selected outlets.
  6. 6. [OPERATIONS MANAEMENT] July13, 2014 N a t i o n a l I n s t i t u t e o f B u s i n e s s M a n a g e m e n t Page 6 As a retailer committed to uplifting the standards of the supermarket industry in Sri Lanka, Keells Super challenged itself to earn the stamp of quality from the Sri Lanka Standards Institute, the very first supermarket chain in the country to do so. This exclusive recognition means that customers can be assured of the quality and hygiene of the stores as well as its products consistently. The certification was awarded following a rigorous checking and testing process over a period of time at each certified store. Apart from the testing of the products sold, the certification covers areas of environmental hygiene, hygienic production of food in production bakeries and kitchens, transport, handling and storage of foods, cleaning, maintenance, temperature control, pest control systems and preventive/control measures for hazards. In a market environment which has faced public criticism doe to hygiene and safety factors, customers of Keells Super can now enjoy the freedom and satisfaction of shopping from groceries to fresh foods, with Keells Super-fast earning a reputation for its fresh foods. The certification also required specific conditions for primary food items such as dairy, poultry, bakery, fresh fish, fresh and processed meat products, fresh fruits and vegetables. What is also interesting is that the safety, hygiene and quality tag had to be earned by ensuring that the equipment and fittings used to handle food items, and even the store staff themselves, complied with the requirements. So, come over to Keells Super with confidence and enjoy your shopping in safe hands.
  7. 7. [OPERATIONS MANAEMENT] July13, 2014 N a t i o n a l I n s t i t u t e o f B u s i n e s s M a n a g e m e n t Page 7 Analysis In this analysis you can have more knowledge about Layout Planning, Location Planning and Supply Chain Management strategies of the Keells Super according to the Operation Management functions. Decisions of OperationsManagement Location Planning Location planning decisions are very vital for all types of business units. So every firm must use location planning techniques because it affects the cost, selling price and demand of the product. Facility location for production and service operations can have a great impact on investment and operating costs. Location can be identified as, “Named geographical place that provides permanent facilities for movements or goods or is designed for a stated purpose” Facility location also known as location study, with mathematical modeling and solution of problems concerning best possible position of facilities in order to minimize transportation cost and avoid placing hazardous. It is not practical for many service providers to provide the service at the customer location. Therefore, service providers need to consider the customers’ cost of transportation to and from the service location.
  8. 8. [OPERATIONS MANAEMENT] July13, 2014 N a t i o n a l I n s t i t u t e o f B u s i n e s s M a n a g e m e n t Page 8 Need of Location Planning 1) Expansion If the company wants to expand and diversify its activities, they will have to search for a new location for setting up their new business unit. In this case they will need a location planning. 2) Cost advantages The existing plant is not near a market place, it will increase the transport cost. This will also increase the cost of the product. To avoid this, the company will search for a new location which is near to the market. 3) Discovery of raw material Generally a plant must be located at a place where raw material is available. 4) Additional facilities New facilities may be necessary to improve the quality of work, to meet rising demand and etc. 5) Political and social changes This may make the existing location unattractive for doing business. Social changes may require production of eco-friendly goods. This may require a change in location. 6) Increasing product demand Demand of the product may increase at other places. So the company will have to start a branch in another state. This would lead to a search for new location.
  9. 9. [OPERATIONS MANAEMENT] July13, 2014 N a t i o n a l I n s t i t u t e o f B u s i n e s s M a n a g e m e n t Page 9 Factors affecting location decisions  Proximity to customer How close the business is to their customers. This is very vital for a service organization. Every business depends on its customers for its very survival. Owners of retail and service businesses usually need to locate their businesses primarily based on customer volume and convenience.  Business climate This refers to the location of competitors and the supportive environment available for the business operations.  Infrastructure facilities Accessibility of proper road network, water supply, electricity, waste disposal and drainage system.  Quality of labour Can the organization obtain skilled labours at lowest possible cost.  Proximity to suppliers An organization is depending on suppliers (distributors, wholesalers, manufacturers, etc.). So the organization should have a easy access to the suppliers.  Political climate The political stability is very important when selecting a location. Otherwise the organization could not be able to do their business activities.  Government conditions To become a successful organization government conditions should favorable to the organization.
  10. 10. [OPERATIONS MANAEMENT] July13, 2014 N a t i o n a l I n s t i t u t e o f B u s i n e s s M a n a g e m e n t Page 10  Environmental implications Pressure groups may be major barriers to the business activities. So there should consider environmental implication when selecting the location.  Competitive advantage Competitive advantage is a advantage that gives a gain over other competitors. So when selecting a location the organization needs to see whether they get any competitive advantage.  Host community Surrounding community can impact on the business. So as other factors we should consider the culture, the value system, the education level and the standard of living of the people when selecting a location. Techniques for facility locations  Factor rating method  Centre of gravity method  Transportation model  Break even analysis method Analysis
  11. 11. [OPERATIONS MANAEMENT] July13, 2014 N a t i o n a l I n s t i t u t e o f B u s i n e s s M a n a g e m e n t Page 11 Proximity to Customers As supermarket chain Keels targets all level of customers in low level to high level. Proximity to customer is one of the main factors in their location planning. According to Keells Super location planning standards they always start their new outlets within one kilometer from main bus stand and railway station. In Galle, Keells Super outlet situated 550m away from Bus stand. As they target all level of customers, They expect those customers will come to their outlet. However it didn’t success as Keells Super wishes. Because those customers access Cargills food city near by the stand. This outlet is easy to customers who use vehicles. They provide spacious parking facilities in their premise. Business Climate Keells Super has three competitors in Galle. Pagoma Food Mall, Sea Line Food City and Two cargills outlets compete with Keels super. According to Keells manager they take only Cargills food cities as their main competitor. First Cargills food city in Galle situated near by bus stand and it has massive customer base. But lack of parking facilities and difficulties in vehicle handling reduce their high-end customers. Keells use this fact as their opportunity. And they start this outlet with eliminate that parking and space problems. That opportunity gives competitive advantage and increase high end customer base of Keells Super. After establishing keels outlet, cargills expand their food city chain with opening new large other food city in center of the city with spacious parking facilities. It attracts all level of customers because of their easy access and its advance strategy of both food City and KFC restaurant under one roof. Keells super outlet situated in Kaluwella area. This area is consisting of number of slow moving businesses such as jewelry industry and showrooms. Because of that reason number of customers accesses are low in that area. It reduces Keells customer base. Current customers are looking easy flow access at their shopping journey. Since there are no related and supportive neighbor businesses in Kaluwella area it breaks shopping flow.
  12. 12. [OPERATIONS MANAEMENT] July13, 2014 N a t i o n a l I n s t i t u t e o f B u s i n e s s M a n a g e m e n t Page 12 Infrastructure Facilities As Keells outlet situated in Kaluwella area it benefited all municipal infrastructure facilities offered by Galle Municipal Council. Keells outlet benefited from proper road facilities. Keells premises bounded to two roads and one of them is the Colombo-Matara A2 road. Quality of employees Keells recruits their supermarket employees within 10km area of outlet. It is not a difficult thing to find experienced super market employees from this area. Safety As the selected place situated in highly urban area location safety is ensured for Keells Super. Area haven’t prerecords as a criminal area or not socialized behaviors. And always area consists of policemen and police station is situated near by outlet. Environment Galle area was highly affected from 2004 tsunami disaster. Most business places in Galle city and Kaluwella area were damaged from it. After disasters most buildings are designed to face high water levels. Keells Super layout floor also build few feet above from land level. This area hasn’t any other environment problems according to history records. Because of that safety of customers and products are ensured. Layout Planning A layout can be simply defined as the way of arranging or placing any kind of good or object…… etc. within the organization, in order to increase the level of efficiency, effectiveness in an economical way Today’s business organizations should have a well-managed layout system within the organization. So having well manageable layout gives the maximum output from its employees as well as to increase the efficiency and effectiveness of the day to day work activities in an economical way while reaching the objectives of the organization.
  13. 13. [OPERATIONS MANAEMENT] July13, 2014 N a t i o n a l I n s t i t u t e o f B u s i n e s s M a n a g e m e n t Page 13 A good retail layout depends on how the varies measures of customer satisfaction are met on your layout. The layout is the key performance measure of business & it’s a special language to communicate company image to the customer. Customer loyalty, emotional connection, customer convenience and level sales can be influenced by the layout. When planning retail layout you have to mainly consider about these four factors Walking Space A good retail store layout allows for sufficient walking space for customers. If the store provides shopping carts, then there must also be space for customers to stop near a product display and park a cart without disrupting the flow of traffic. This is very important in retail layout design. Flow The layout of your retail store should allow customers to enter from the front and be encouraged to walk to the back of the store. This increases the amount of time that the customers spend in the store that they will buy more products. The layout aisles should be design that brings customers through the front door with impulse products and some high-demand items works customers to the back of the store with higher priced items and then allows them to exit through aisles of more impulse items at the cash register locations. Eye Level Putting products at the proper eye level will help to improve sales. But it is important to remember whose eye level you are trying to reach. If you are trying to sell tennis racket to adults, then put the tennis racket at adult eye level. A toy you are trying to sell to children needs to be at a child's eye level. Display Cases Display cases are important functions in the layout of a retail store. Expensive product can be put in a lighted display case to draw attention to it. You can increase the effectiveness of a display case at the cash out area by putting a sales associate there to engage customers and answer questions.
  14. 14. [OPERATIONS MANAEMENT] July13, 2014 N a t i o n a l I n s t i t u t e o f B u s i n e s s M a n a g e m e n t Page 14 Importance of layout A proper layout plant reduces manufacturing costs through reduced materials handling, reduced personnel and equipment requirements and reduced process inventory. Proper layout planning has so many advantages. Some of these advantages are,  Economies in handling  Effective use of available area  Minimization of production delays  Minimum equipment investment  Improved quality control  Avoidance of bottlenecks  Better supervision  Improved employee morale and Reduced number of accidents Types of layouts Process Layout It is also called functional layout. It is generally associated with batch production. Factory is divided into similar process units. And within these similar process units all similar facilities are grouped together. Example Movie sets or studios Product layout It is also called line layout. The layout plant, size and shape of building, location and shape of storage yard, position of material handling equipment is such that material is flowed in one direction at the steady rate. All equipments and machines used in this process are of special type and highly trained labor is used in this layout. Examples are assembly lines of automobiles, refrigerators, radio, televisions and air conditioners. Project layout It is also called fixed position layout. In this type of layout product to be produced remain at fixed position and machine, material and man are brought at the assembly position. Examples: Aero plane, ships and heavy machines.
  15. 15. [OPERATIONS MANAEMENT] July13, 2014 N a t i o n a l I n s t i t u t e o f B u s i n e s s M a n a g e m e n t Page 15 Cellular Layouts Primarily this type of layout is an attempt to reduce the complexity of process layouts. It divides transforming resource up into small clusters which can be used to act upon different products or product groups. Within each cell layout can be almost identical to product layout.
  16. 16. [OPERATIONS MANAEMENT] July13, 2014 N a t i o n a l I n s t i t u t e o f B u s i n e s s M a n a g e m e n t Page 16 Layout of the Keells Super – Galle Branch (B) ) (A) (A) (C) (A) (D) (E) (F) (G) (H) (J)(I) (M) (L) (K) (O) (N) (1) ) (A) (A) (2) ) (A) (A) (3) ) (A) (A) (4) ) (A) (A) (6) ) (A) (A) (5) ) (A) (A) (7) ) (A) (A) (8) ) (A) (A) (9) ) (A) (A) (4) ) (A) (A) (10) ) (A) (A) (4) ) (A) (A) (4) ) (A) (A) (4) ) (A) (A) (1) ) (A) (A) (1) ) (A) (A) (1) ) (A) (A) (1) ) (A) (A) (2) ) (A) (A) (2) ) (A) (A) (2) ) (A) (A) (2) ) (A) (A) (3) ) (A) (A) (3) ) (A) (A) (3) ) (A) (A) (3) ) (A) (A) (5) ) (A) (A) (1) ) (A) (A) (2) ) (A) (A) (3) ) (A) (A) (4) ) (A) (A)(6) ) (A) (A) (1) ) (A) (A) (1) ) (A) (A) (1) ) (A) (A) (1) ) (A) (A) (1) ) (A) (A) (2) ) (A) (A) (2) ) (A) (A) (2) ) (A) (A) (2) ) (A) (A) (2) ) (A) (A) (3) ) (A) (A) (3) ) (A) (A) (3) ) (A) (A) (4) ) (A) (A) (4) ) (A) (A) (4) ) (A) (A) (5) ) (A) (A) (5) ) (A) (A) (5) ) (A) (A)(6) ) (A) (A) (6) ) (A) (A) (P) (P)(P)(P)
  17. 17. [OPERATIONS MANAEMENT] July13, 2014 N a t i o n a l I n s t i t u t e o f B u s i n e s s M a n a g e m e n t Page 17 (B) (1) Cool water (2) Cool drinks (3) Bill Payment (4) Water (7) Canned soft drinks (5) Red bull (8) Cooler (6)Bottled soft drinks (9) Biscuits (10) Coffee (C) (1) Liquid milk (2) Juices (3) Coca cola (D) (1) Chocalates (2) Noodles (3) Deserts (4) Clearance corner (E) (1) Marshmallows/ Samapoosha (2) Desert ingredents (3) Cereals (4)Spices (F) (1) Trollys (2) Samahan/Marmite/Jam (3) Mortin /Car wash (4) Pharmacy (5) Fruits and Vegetables (G) (1) Munchee products (2) Milk Powder (3) Tea (4) Energy Milk powder (6) Anchor (H) (1) Torch battery (3) Washing (4) Landry powder (5) Magazines (6) Lysol (I) (1) Flora Paper (2)Shaving (3)Perfume (4) General needs (5) Stationary (6) Lipton (J) (1) Tooth paste (4) Freelan (K) Rice (L) Freezers (M) Cheese and Butter (N) (1) Ice cream (2) Freezers Analysis Keells have unique layout plan for their supermarkets. They have three levels in their supermarket chain according to outlet size. They named them as Medium, Large and Extra-large. Galle branch is a large outlet. This layout plan was designed according to basis of easy access. Front shelves are consisting of morning needs such as breakfast preparing solutions. Middle of the layout consist with daytime needs and general needs. Front morning solutions are for quick customers who visit morning. They are looking quick solutions for their needs in minimum time. They do not wish long shopping at morning time. Middle level is for daytime customers. They spend more time in
  18. 18. [OPERATIONS MANAEMENT] July13, 2014 N a t i o n a l I n s t i t u t e o f B u s i n e s s M a n a g e m e n t Page 18 shopping and purchase lot of things such as general needs and vegetables. This level has high variation in products. Keells uses Grid layout plan for their supermarkets. Keells Large consists with 8 large two side shelves and long wall shelves in sides. Every two side shelves consists two side shelves those are maintain by unique products. Those small side shelves are owned by leading companies after paid to Keells. Every main shelf has six racks. Planogram of shelves based on two dimensions. 1. Product type 2. Price 3. Safe Relative products are stored in one shelf. It improves free flow relationship at shopping in Keells Super. They store those relative products according to left to right price ascending order. It helps customers to identify price changes in same product category without checking prices one to one. When applying these standards, Keells also presents these products according to brand identifications. When arranging products in shelves, Keells pay their attention on safety too. They store most weighted products in bottom rows and soft weighted products in top of the shelves. Keells do not use product category variations vertically. Because if there is vertical product variation, it leads to get low attention from customers towards top and bottom product lines. Specially 4th and 5th rows bear most identical products and products with reputed brand names. It gives direct idea product category immediately. Keells Super highly concern about this eye sight matching strategy when presenting products. Each product and brand category in the shelves has reasonable space and availability of large quantity. Shelves are not consist with small amount of products in single category. It improves ability of product availability even at fast moving situations. It gives reasonable time to fill shelves. All shelves hold price tags relevant to products in that partition. It gives information of price without examine product to find its price. Ice cream, meat and other cold needed products are store in transparent refrigerators for easy selection. Because of this there is no need to open the refrigerator to select
  19. 19. [OPERATIONS MANAEMENT] July13, 2014 N a t i o n a l I n s t i t u t e o f B u s i n e s s M a n a g e m e n t Page 19 and find products. Continuous opening of these large refrigerators do huge electricity waste. Fruits and vegetables are store in open shelves with special cooling system to protect freshness. Those shelves are designed for maintain minimum wastage through elimination of one on one storage. All shelves are around five feet in height. It maintains easy access at the purchasing. Anyone can easily get top row items without help of employees. It improves both customer and employee safety at handling items. There is four feet gap between large shelves. That gap is enough for three parallel human exchanges and two parallel cart access. Side shelves do huge contribution in pushing customers to buy those reputed strong brands. These small side shelves are designed according to brand preferences and themes. At Keells Galle, there are side shelves for strong brands like Anchor, Munchee, Redbull, Coca Cola, Eveready, Lysol, Signal and Freelan. Side shelves at front of the layout are for products with special offers. These front shelves easily attract customers at their paying time. Customer has to spent sort of time at cashier point till checking and billing their purchased products. Keells front shelves with offers motivate these customers to buy those products and customers also pay their attention towards these eye-catching offers. Keells use this customer’s attraction behaviour on offers as their core strategy. There are four cashiers in Galle Keells Super market. All these cashiers are separated and it improves free flow among them. These separated shelves are placed in as saving large space around them and it reduces queues in rush hours. This layout design has proper air condition system and there is no any difficulties in breathing even rush times. This layout designed with proper light system which provides same level of soft light all the day. There is camera system which covering whole layout. It ensures safety of people, illegal behaviors and thieveries. Front of the supermarket made by transparent glasses and it is absolute requirement for modern competitive retail outlet. This transparent glass wall gives inside view to out. However according to Keells Super layout they do not placed shelves near to front wall. All shelves are places five meters away from front wall. In Keells Galle outlet view through front glass directs eye to four front cashiers instead of attractive
  20. 20. [OPERATIONS MANAEMENT] July13, 2014 N a t i o n a l I n s t i t u t e o f B u s i n e s s M a n a g e m e n t Page 20 Supplier Manufacturer Distributor Retailer Customer products. Direct view of products through front wall increases the prosperous of the supermarket. Keells has ability for this change since their front wall has no issues from direct sunrise. Front of the building has huge name board of Keells Super in ash colour building background. This front image is not giving enough impression on keels Super since their main competitor use same theme colours to their outlets in maximum level. Inside of the supermarket is not holding their colour theme strongly. Combination of theme colours hold huge place in increasing customer attraction. Entrance of the outlet consists with small staircase and it slightly de-motivates customers and entrance in not hold attractive welcome look. Supply Chain Management Definition of 'Supply Chain Management - SCM' Supply chain management is the streamlining of a business' supply-side activities to maximize customer value and to gain a competitive advantage in the marketplace. Supply chain management (SCM) represents an effort by suppliers to develop and implement supply chains that are as efficient and economical as possible. Supply chains cover everything from production, to product development, to the information systems needed to direct these undertakings Supply Chain Management Supply Chain management plays a vital role in appropriate operations management. Supply chain management involves managing the flow of materials and information from suppliers and buyers of raw materials all the way to the final customer. Its aim is to reduce the overall cost and improving the quality and the delivery of the service. Team approach is essential in supply chain management. It requires the cooperation from all the departments such as marketing, purchasing, operations, and engineering. It will result in more satisfied customers. It has become possible with the development of information technology tools which assist in collaborative planning and scheduling.
  21. 21. [OPERATIONS MANAEMENT] July13, 2014 N a t i o n a l I n s t i t u t e o f B u s i n e s s M a n a g e m e n t Page 21 The technologies help to combine the supply chain and design collaboration, which enables companies to respond better and faster to changing market needs. The companies which have achieved great success through supply chain management are Dell Computer, Wal-Mart and etc. Today businesses must think in terms of a global marketplace in order to compete effectively. This includes the way they view their customers, competitors, and suppliers. Key issues are meeting customer needs and getting the right product to markets. Operations management is responsible for most of these decisions. Operations Management decides whether to tailor products to different customer needs, where to locate facilities, how to manage suppliers, and how to meet local government standards. Also, global competition has forced companies to reach higher levels of excellence in the products and services they offer. The use of best supply chain management should be used in supermarket retail branch for excellent management of the operations. There are 3 different types of supply chain management flows:  The product flow: It corresponds to the flow of goods to customer from supplier.  The information flow: It corresponds to the flow of transmitting orders and updating the delivery status.  The finance flow: It corresponds to payment schedules, credit terms, consignment and title ownership arrangements. Supply chain management Principles 1. Try to know the product closest to the customers and speed conversion across the supply chain. 2. Manage the raw materials wisely to reduce the total cost of owning materials and services. 3. Develop supply chain that supports multiple level decision making. 4. Scale the success of the product reaching the customer effectively and efficiently. 5. Listen to market vibes and change the supply chain accordingly. 6. Customize profitability of customer.
  22. 22. [OPERATIONS MANAEMENT] July13, 2014 N a t i o n a l I n s t i t u t e o f B u s i n e s s M a n a g e m e n t Page 22 7. Serve segment customers based on service needed and adapt the supply chain to serve with profitability. Supply Chain Benefits  Cost  Reduced inventories  Reduced waste  Reduced total system costs  Service  Establishment of a collaborative framework  Near real time information flow  Reduced variation and increased quality  Business growth opportunities  Preferred source for new opportunities  Expanded benefits to other customers Keell’s Method of Managing the Supply Chain Keells supermarket has been able to assume market leadership position primarily due to its efficient integration of suppliers and distribution to stores. Keells’s supply chain begins with strategic sourcing to find products at the best price from suppliers who are in a position to ensure they can meet demand. Keells establishes strategic partnerships with most of their vendors, offering them the potential for long-term and high volume purchases in exchange for the lowest possible prices. Technology plays a key role in Keells’s supply chain, serving as the foundation of their supply chain. Keells has a good information technology infrastructure. Its network design allows Keells to accurately forecast demand, track and predict inventory levels, create highly efficient transportation routes, and manage customer
  23. 23. [OPERATIONS MANAEMENT] July13, 2014 N a t i o n a l I n s t i t u t e o f B u s i n e s s M a n a g e m e n t Page 23 relationships and service response logistics. When the stocks reach the minimum level at the Keells supermarket-Galle, an electronic message will aggregate to the warehouse at Colombo by this network. Then the shortage level will be full filled within short time. Their delivery dates are, Monday, Wednesday and Friday. In addition to that Galle Supermarket maintains a small store. Keell’s supply chain management strategy has provided the company with several sustainable competitive advantages, including lower product costs, reduced inventory carrying costs, improved in-store variety and selection, and highly competitive pricing for the consumer. This strategy has helped Walmart become a dominant force in a competitive global market. As technology evolves, Walmart continues to focus on innovative processes and systems to improve its supply chain and achieve greater efficiency. Products like Cigarettes, Yoghurt, Chicken, Ice-cream (Elephant House), Eggs, etc. will be purchased by the agents in Galle. To get a new supplier they give the priority to customer expectations and the approval will be given by the Head office Colombo. Product and Service Design Companies choose various ways to design their products and the type of services they provide, which include: standardization, mass customization, delayed differentiation, modular design, and robust design. Deciding which method to use is very important along with deciding the company's target market. Deciding the right method, establishes good productivity and efficient way of operations. Service design is an activity of organizing and planning people, communication and material components in order to improve service quality. It is the interaction between the service provider and customers and the customers' experience. A service is anything that is done to or for a client and is created and delivered simultaneously Product Designers conceptualize and evaluate ideas and themes they find profitable. The designers make these ideas tangible through products using a systematic approach. Difference between service design and product design: Service design is an intangible aspect while product design is tangible. Services are generally created and delivered at the same time and cannot be held in inventory like actual products. Also, services (especially quality one) are highly visible to customers.
  24. 24. [OPERATIONS MANAEMENT] July13, 2014 N a t i o n a l I n s t i t u t e o f B u s i n e s s M a n a g e m e n t Page 24 Process and Capacity Design Capacity refers to a system's potential for producing goods or delivering services over a specified time interval. Capacity planning involves long-term and short term considerations. Long-term considerations relate to the overall level of capacity; short- term considerations relate to variations in capacity requirements due to seasonal, random, and irregular fluctuations in demand. The most important concept of capacity planning is to find a medium between long term supply and capabilities of an organization and the predicted level of long term demand. Organizations also have to plan for actual changes in capacity, changes in consumer wants and demand, technology and even the environment. When evaluating alternatives in capacity planning, managers have to consider qualitative and quantitative aspects of the business. These aspects involve economic factors, public opinions, personal preferences of managers. Three key inputs to capacity planning: 1. The kind of capacity that will be needed 2. How much capacity will be needed 3. When will it be needed. 6) Material requirements planning and Inventory Control Material requirements planning (MRP) is a production planning and inventory control system used to manage manufacturing processes. Most MRP systems are software- based, while it is possible to conduct MRP by hand as well. Success of an operation department of any organization is dependent upon an efficient production plan. One of the key essential of a production plan is material and manufacturing planning system. Material requirement planning plays a pivotal role in assembly-line production. Material requirement planning is a system based approach, which organizes all required production material. Inventory Control is the supervision of supply, storage and accessibility of items in order to ensure an adequate supply without excessive oversupply.
  25. 25. [OPERATIONS MANAEMENT] July13, 2014 N a t i o n a l I n s t i t u t e o f B u s i n e s s M a n a g e m e n t Page 25 It can also be referred as internal control - an accounting procedure or system designed to promote efficiency or assure the implementation of a policy or safeguard assets or avoid fraud and error etc. Production Scheduling Scheduling is an important tool for manufacturing and engineering, where it can have a major impact on the productivity of a process. In manufacturing, the purpose of scheduling is to minimize the production time and costs, by telling a production facility what to make, when, with which resource, and on which equipment. Production scheduling aims to maximize the efficiency of the operation and reduce costs.  Master Production Schedule (MPS) is a plan for production, staffing, inventory and resources. It is usually linked to manufacturing where the plan indicates when and how much of each product will be demanded. This plan quantifies significant processes, parts, and other resources in order to optimize production, to identify bottlenecks, and to anticipate needs and completed goods. The MPS translates the business plan, including forecast demand, into a production plan using planned orders in a true multi-level optional component scheduling environment. Using MPS helps avoid shortages, costly expediting, last minute scheduling, and inefficient allocation of resources. Scheduling Types Companies use backward and forward scheduling to allocate plant and machinery resources, plan human resources, plan production processes and purchase materials. Forward scheduling is planning the tasks from the date resources become available to determine the shipping date or the due date. Backward scheduling is planning the tasks from the due date or required-by date to determine the start date and/or any changes in capacity required. Managing Quality Quality refers to the ability of a product or service to consistently meet or exceed customer requirements or expectations. Different customers will have different
  26. 26. [OPERATIONS MANAEMENT] July13, 2014 N a t i o n a l I n s t i t u t e o f B u s i n e s s M a n a g e m e n t Page 26 expectations, so a working definition of quality is customer-dependent. Some of these consequences of poor quality include loss of business, liability, decreased productivity, and increased costs. However, good quality has its own costs, including prevention, appraisal, and failure. Successful management of quality requires that managers have insights on various aspects of quality. These include defining quality in operational terms, understanding the costs and benefits of quality, recognizing the consequences of poor quality and recognizing the need for ethical behavior. Understanding dimensions that customers use to judge the quality of a product or service helps organizations meet customer expectations. Having good quality is a competitive advantage against others who offer similar products or services in the marketplace. Maintenance Management The term of maintenance covers all activities undertaken to keep equipment in a particular condition or return it to such condition. Maintenance management is not to repair broken equipment rapidly. Modern maintenance management is to keep the equipment running at high capacity and produce quality product at lowest cost possible. Objective of the maintenance is as priority one, to create an availability performance which is suitable for production demands in the organization. No mechanized company has yet succeeded to produce with stopped equipment production buy availability performance from maintenance. Job Designing & Human Resource The objective of a human resource strategy is to manage labor and design jobs so people are effectively and efficiently utilized. Good job design is needed to ensure appointees have the skills and capabilities to be successful in performing the role and is fundamental to a well-functioning organization. job design means the ways that decision-makers choose to organize work responsibilities, duties, activities, and tasks. Job Redesign thus involves changing work responsibilities, duties, activities, and tasks. Through job design, organizations
  27. 27. [OPERATIONS MANAEMENT] July13, 2014 N a t i o n a l I n s t i t u t e o f B u s i n e s s M a n a g e m e n t Page 27 try to raise productivity levels by offering non-monetary rewards such as greater satisfaction from a sense of personal achievement in meeting the increased challenge and responsibility of one's work. Job enlargement, job enrichment, job rotation, and job simplification are the various techniques used in a job design exercise.
  28. 28. [OPERATIONS MANAEMENT] July13, 2014 N a t i o n a l I n s t i t u t e o f B u s i n e s s M a n a g e m e n t Page 28 Findings  Location of Keells Super Galle outlet is relatively far from crowded area of the city. This outlet situated 550m away from Galle main Bus station and crowdful area. Middle of the city consists of major businesses, banks and fast moving businesses. In this area has two main Cargills Food Cities. Current location of the Keells Super breaks the expectation of the most customers to easy access.  Lack of supportive business around the Keells outlet is huge problem for customer attraction. There are no related businesses and fast moving product businesses near by the Keells.It de-motivate customers to use that area recently.  This outlet faces to A2 Colombo-Galle main road. Under new road development project increased the width of the road and separated road into two lines using concrete line. Because of this separation customers with vehicles are faced road accessing difficulties when entering and exiting.  There is no any bus stop within 400 meters to both Galle and Colombo sides.  There are no powerful identification signs in Building  Maintenance of layout standards are broken in some places. Some products are presented in out of the shelves and different shelves due to space problems.  Due to standards, outlet could not get maximum benefits from glass front windows.  There is standard for store Chemicals and food separately. But front shelves with products with offers hold both chemicals and food products in single shelves  According to Keells supply chain, they receive ordered products in Monday, Wednesday and Friday. There are shortages in some slow moving products due to lack of attention to fill those products.  There are issues in appointing new suppliers and new products. Appointing process takes long time and it is controlled by Colombo head office.  Since their main competitor is most reputed and one of the large market share holder in dairy products and sausages, Keells face problem of unavailability of those reputed brand in their outlets.
  29. 29. [OPERATIONS MANAEMENT] July13, 2014 N a t i o n a l I n s t i t u t e o f B u s i n e s s M a n a g e m e n t Page 29 Recommendations  Mother company of Keells Super has solid base in Sri Lankan market. So they can pay their attention to move this supermarket towards middle of the city.  Improve front look using theme colors and sign boards to attract customers.  Rearrange spaces for fast moving products  Place shelves near by the front glass window and entrance to attract more customers.  Appoint employee to maintain order of product placing according to standards.  Give more attention to save international standards of product placing instead of store opposite products in same shelves.  Just in time supply method is most suitable for this type of supermarkets.  Make time saving and flexible method to appoint new products and suppliers. It is most needed requirement in this competitive market.
  30. 30. [OPERATIONS MANAEMENT] July13, 2014 N a t i o n a l I n s t i t u t e o f B u s i n e s s M a n a g e m e n t Page 30 Conclusion Analysis of location planning layout and supply chain management regard to Keells Super Galle outlet indicates its advances and defects according to operations manage ment theories. As this is one of the main outlets of island wide Keells Supermarket ch ain defects doing huge damage to image of whole chain. At starting Galle outlet they failed to place it competitive location in Galle. It fails to c ompete with Cargills food cities at Galle city. Cargills compete with step ahead in loc ation planning. In layout planning, Keells has good view and plan with advanced strat egies. But layout has pay much attention on front appearance since current businesses are running on outlook and competitive advertising their most important factor in layo ut plan is spacious layout design. Product ordering and receiving system of Keells Sup er should to be more flexible appointment of new quick system to compete with comp etitors. According to this analysis Keells need to take action to do and face huge diffic ulties with their current location and need to do modifications in supply chain.
  31. 31. [OPERATIONS MANAEMENT] July13, 2014 N a t i o n a l I n s t i t u t e o f B u s i n e s s M a n a g e m e n t Page 31 References  Production schedule definition, getting the facts on business dictionary. Available from:www.businessdictionary.com [Accessed 10th July 2014]  Chase RB,Shankar R,Jacobs FR,Aguilano NJ, Operation and management,12th edition

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