Ops Mgmt Report

Operations Management | [Course Title] | [Date]
Operations Management
Report

Table of Contents
Executive Summary.......................................................................................................................................................2
1. Introduction...........................................................................................................................................................3
2. Statement and Analysis of the issue ...............................................................................................................4
2.1 Performance Objectives ....................................................................................................................................4
2.2 Transformation Process ....................................................................................................................................6
2.3. The Four Vs .........................................................................................................................................................6
2.3. Service Concept..................................................................................................................................................7
2.4. Operation Strategy............................................................................................................................................9
2.5. Process Design and Layout ............................................................................................................................10
3. Key Observations.................................................................................................................................................13
3.1. Observations during non-peak hour and night shift..............................................................................13
3.2. Observations during Peak Hour...................................................................................................................13
4. Capacity Management .......................................................................................................................................14
4.1. Capacity Management and Performance Objectives .....................................................................14
4.2. Demand of Asda’s Operations ..............................................................................................................14
4.3. Asda’s Capacity Management Plan......................................................................................................15
4.4. Asda’s Capacity..........................................................................................................................................16
5. Recommendation and Implementations Plan ............................................................................................17
6. Appendix................................................................................................................................................................18

Tesco
29%
Asda
16%
Sainsbury's
17%
Morrisons
11%
The Co-
operative
6%
Waitrose
5%
Aldi
5%
Lidl
4%
Iceland
2%
Others
3%
MARKET SHARE
1. Introduction
Asda, achain supermarket in the UK is amongst the top four performing in the UK, coming
in third with a market share of 16.2%. It is privately owned by Walmart, the American
retail giant. Asda operates with over 525 stores in the UK, and employs over 175,000 staff
(2), offering low cost and honest products. In recent years, it has branched out to offer a
wider range of services, in areas such as pharmaceutical and financial. Our focus Asda
store at the Brighton Marina boasts a large complex and great locale. This makes it very
well accessible to customers around the Brighton area by car and public transport links,
providing free parking as well as providing a large variety of goods and services catering
to a wide array of customer needs. This report focuses on the Brighton Marina ASDA
superstore and aims to discuss and analyse its current operations. Consequently,
providing any recommendations as to the improvement of their operations in the future.
which should include a summary of the organisation’s market positioning (keep this focused upon how
such positioning influences the nature of it operations).

2. Statement and Analysis of the issue
2.1 PERFORMANCE OBJECTIVES

Performance
Objectives
Analysis
Quality: 6 Quality is of high importance to customers when they engage in grocery
shopping. The end product’s quality is affected by each of the prior
staged in the operation chain, before it reaches the consumer. Asda,
graded at 6, competes on a fairly medium level of quality in comparison
to its market competitors. Asda offers a range of quality in their products,
from cheaper “Smart Price” options to more luxury “Extra Special”
options.
Speed : 7 Customers can be served quite quickly in Asda, with staff constantly
places on the shop floor to help assist customers. Speed is improved also
with the option of self-checkout along with tradition till check-out in
order to move along queues at peak times more efficiently.
Flexibility: 8 Asda offers good to very good flexibility, as on the shop floor they offer a
variety of product quality and options, as well as three different ways a
customer can choose to checkout, those being self-checkout, till
checkout, and a larger self-checkout for more items. These checkouts can
be opened and closed in order to adjust to different levels of demand at
peak and non-peak times. Furthermore, the home delivery service readily
offers alternative products of similarity if the product a customer orders
becomes unavailable.
Cost: 8 Asda competes strongly in cost as it markets as one of the cheaper
supermarket options, especially in regards to the big 4, that is,
Sainsbury’s, Tesco, Asda and Morrisons [1]
ASDA’s customers regard value for money with high importance, thus
ASDA’s ethos of providing products and services at an affordable price is
paramount to the success of their operations.
Although there are cheaper alternatives in the market, Asda offers a good
combination of low price and satisfactory quality
Dependability: 9 Asda ranks high in dependability, as it carries a variety of stock on the
shop floor as well as surplus in backroom storage, in order to be able to
replenish any items that have sold quickly. Additionally, they offer
specialized customer service services online and instore to be able to aid
customers with any issues or enquiries they might have. Furthermore,
ASDA offers home delivery options to online customers at very affordable
delivery costs starting at £1.

2.2 TRANSFORMATION PROCESS
Inputs Transformation process Outputs
 Low prices on
products
 Fast service
(delivery, check
out time)
 Customers inputs
(request for a
certain product)
 Parking facilities
 Selling goods and
services to targeted
customers while
providing a fast service
Transforming resources
 Receiving stock from
suppliers and stocking
them in the supermarket
 New staff training
 Cashiers checking out
customer’s items at tills
 Customer
receives goods
and services
 Customer
Service
2.3. THE FOUR VS
Low High
Volume
Variety
Variation of demand
Visibility

Volume ASDA has a standardised procedure and work system. Most of the labour are
doing the repeated work. Such as checkout and stocking. Low unit costs of
ASDA indicates the high volume
Variety ASDA have a standardised operation process. The staffs would just provide the
billing and checking service. They are following the basic guidelines of the
employees, instead of basing on what customer wants. The variety of ASDA
would be low.
Variation in
demand
ASDA would provide different products range based on seasonal demands.
Such as more Christmas decoration and food when it comes to mid-November.
Enhance that the variations is from medium to low.
Visibility Customer could do all the shopping by themselves base on ASDA’s clear layout
and self-checkout system. which indicates less interaction with the employees.
in addition, online delivery system of ASDA even provides to customer an
option with lower visibility
2.3. SERVICE CONCEPT
Organisation: ASDA
Organization Ideas:
Smile and save. You'll be 10% better off at Asda
Service Experience:  Convenient and easy online shopping
 Many checkout options
 Wide range of products
 Clear designated aisles
 Good customer services
 Easier shopping with Click and Collect services
Service Outcome:  Freedom of selection and self-services
 Reasonable or lower prices of goods
 Good shopping experience
 High quality, safety and hygienic food

Services Operation:  Far away from city centre
 Car park for Asda customers
 Faulty toilet operations
 Expired foods
 Opened 24 hours from Tuesday - Friday
Services Value  Value for money compare with others supermarket
 Get cheaper price if buy in bulk
 Everyday low price strategy
 Free parking for maximum of 4 hours in front of Asda
Asda is classified within the ‘Mass Service’ sector as a supermarket retailer (Slack,
Chambers and Johnston, 2010). Though it is a high labor intensity service process, there
is limited customer interaction due to the nature of involving technology, i.e. self-
checkout machines, in the process. A supermarket’s operation also offers low
customization as it is produced for the masses. Another common characteristic of a
mass service operation is allowing customers to choose the products themselves from
the display shelves.

Stage 1
Internally
Neutral
Stage 2
Externally
Neutral
Stage 3
Internally
Supportive
Stage 4
Externally
Supportive
2.4. OPERATION STRATEGY
Asda’s operations are found to be internally supportive, their coherent operational strategy has
helped them to remain competitive. Asda’s low-cost approach is their main strength and has based
many of their strategies on it.

2.5. PROCESS DESIGN AND LAYOUT
2.4.1. Process Design
Online Shopping Process Map
This Asda superstore provides home delivery and in-store pick for customer’s online
purchases. Once the online shopping order is confirmed, Asda would prepare the
groceries to get ready for delivery within the customer’s chosen time slot.

In-store Shopping Process Map
The in store shopping in ASDA resembles much like a batch process. Customer entering
the store, selecting their items before they checkout. Customer interaction with staff is
low and minimal, with the interaction times narrowed down to the optional help from
floor staff and checkout operators. Hence, the simple design of Asda’s in store shopping
process.

2.4.2. Layout
The layout of ASDA is functional, as shown in figure 1. This Asda superstore boasts a huge
area to accommodate a huge crowd and a wide range of products. All products have been
segmented and separated into its respective aisles. Example, frozen and chilled foods are
located together so as to concentrate all the common technology together. This helps
ease the search for similar products and keeps traffic flowing in a singular direction. This
also helps to increase overall efficiency of the operation, such as when Asda service staff
wishes to help a customer locate a product, they could just cite the aisle number. The
checkout lanes are spread across the bottom of the shop to accommodate as many
checkout lanes as possible.

3. Key Observations
Asda’s operations were observed on 3 occasions, covering the non-peak hours, peak hours of a
weekday and weekend and the night shift in order to a holistic view of the supermarket’s 24-hour
operation. The operations were found to have done very well in some sectors and not so efficient in
others. The observational data has been supplemented with an interview with a floor manager and
this is reflected below:
3.1. OBSERVATIONS DURING NON-PEAK HOUR AND NIGHT SHIFT
Asda’s operations ran smoothly without much of a hiccup due to the low traffic of consumers. Floor
service staff were sparse and not easily located. Lastly, the checkout operations were found to be
efficient with the checkout operations running smoothly and keep the queueing time short.
During the night shift, Asda’s staff were mainly there to stock the shelves to prepare for the next
day.
3.2. OBSERVATIONS DURING PEAK HOUR
Asda’s operations were placed under greater pressure as the peak hour crowd streamed in. With
the help of the huge store, the crowd dispersed efficiently. However, it can still be found to be
difficult in maneuvering around with trolleys within lanes as they get congested. A number of
empty shelves were observed as well; this would mean poor inventory management by Asda.
Asda’s free parking up to a maximum of 3 hours helps to encourage the crowd. Floor service staff
were busy helping out customers and were hard to reach at times.
The toilets are placed on a different floor and did littleto manage the crowds. There was a lack of
clear toilet signage to inform customers, and is located quite a distance from the shopping area.
The toilets were found to be in an unpleasant state with some of the equipment being faulty and
thus, causing a mess at the entrance.
It was also found that the Asda petrol station provides cheaper petrol and is one of the crowd
drawers that leads shoppers to Asda’s superstore.
Checkout operations were found to have operated efficiently, with the added lanes as well as
checkout options.
The customer service desk was observed to be chaotic, and without a clear queue line distinction,
customers would crowd over the desk, each clamoring for the staff’s attention.

Queueing time
Peak hour
Avgtime inCashiercheckout 12 mins
Avgtime inself-checkout(trolley) 7 mins
Avgtime inself-checkout(basket) 2 mins
Non-Peak
Avgtime inCashiercheckout 2 mins
4. Capacity Management
Managing capacity helps to effectively set the efficient capacity of the business’s operations so as to
cope with the current demand and demand fluctuations. Asda’s operations have short-term and
medium-term fluctuations and constraints, which has to be properly managed. For example, Asda’s
capacity is constrained by a few factors, such as the occasional Valentine’s day or Christmas gift
wrapping service and the number of cashiers available. During such occasions the gift wrapping
service or busy cashiers will be at the capacity ceiling and may cause a bottleneck. As such, capacity
management is important as it helps to smooth Asda’s operations.
4.1. CAPACITY MANAGEMENT AND PERFORMANCE OBJECTIVES
Capacity management helps to maintain Asda’s performance objectives, speed, quality,
revenues, dependability and flexibility.
 Speed of response to customers in the queue could be well managed with more
available cashiers and self-checkout options
 Quality of service is not compromised as shop floor staff are not rushing to help
multiple customers
 Revenues of Asda will be maximised as customers are not subject to long queues
and eventually leave the store
4.2.DEMAND OF ASDA’S OPERATIONS
4.2.1. Daily Demand Fluctuations
As a supermarket retailer, there are daily demand fluctuations. Asda’s operations are low in the
morning, building up higher in the afternoon lunchtime period as well as the after office hours

evening time. Asda is well equipped to handle short-term demand fluctuations with their
numerous cashier tills as well as self-checkout options that ease queues (refer).
4.2.2. Weekly Demand Fluctuations
There also exist weekly demand fluctuations for Asda’s operations, with Mondays and Tuesdays at
the low end, building up into the week; peaking at Fridays and Saturdays (Appendix 1)
4.2.3. Seasonality of demand
Supermarkets ramp up operations in preparation for festive occasions. Festive occasions, such as
Christmas, Easter and Halloween draw in a bigger crowd during the festive trading weeks. Seasonal
foods such as turkey, pudding or cake would be more popular during the Christmas periods and
not so much in the other months.
4.3. ASDA’S CAPACITY MANAGEMENT PLAN
With regards to Asda’s predictable demand variation, Asda employs a variation of capacity
management plans
4.3.1. Chase Demand (Seasonal Periods)
Asda applies the chase demand plan in accordance with the seasonal periods. This helps to
minimise waste of goods as well as employ better use of resources, such as labour. Seasonal periods
such as Christmas require different number of staff (shop floor, customer service and home delivery
staff), in order to cope with the capacity.
Methods of adjusting capacity for Chase Demand
The chase demand plan requires Asda to make adjustments and the
a. Overtime
During Christmas, Asda offers overtime hours to its staff in order to cope with the increased
capacity.
b. Varying the Workforce by hiring part-time
During Seasonal periods, Asda has to be able to cope with the increased capacity and they do it by
hiring more staff.
Seasonal Positions
 Grocery Colleague
 Home & Leisure Colleague
 Chilled Colleague
 Produce Colleague
 Checkout Operators
 Shop Floor Service Staff

 Home Delivery Service
 Customer Service
4.3.2. Manage Demand
The manage demand plan is one that is most commonly used in supermarkets. Asda employs
price promotions such as multi-buys, price deals and seasonal offers. This offers helps to get
the most out of demand during peak hours such as lunch meal deals as well as stimulate
demand during off peak timings. Example: during Black Friday sale, the items chosen to go on
sale were selected on different days to manage crowd and demand.
4.4. ASDA’S CAPACITY
Checkout lanes in Total
CashierCheckout 22
Self-checkout(Trolley) 4
Self-checkout(Basket) 12
Total numberof checkoutoptions 38
Checkout lanes available peak hour
CashierCheckout 13
Checkout lanes available non-peak hour
CashierCheckout 7
Checkout Processing
Peak hour
Avgtime inCashiercheckout 3.3 mins

Non-Peak
Avgtime inCashiercheckout 3.5 mins
Avgtime inself-checkout(trolley) 4.5 mins
Shop Floor Service Staff
PeakHour 4
Non-Peak 2
Use fig 8.15 on page 232.
5. Recommendation and ImplementationsPlan
The first recommendation would be launching a new shuttle service for ASDA. Based on
the feedback from customers who shops at ASDA from the city centre and from the
university. Although there are two regular bus routes to go to ASDA in Brighton, it
usually takes more than 40 minutes one way. Leading to some customers to shop at
another nearby supermarket. Despite ASDA’s large car parking capacity beside their
supermarket, it is hard for students living in the universities to go for shopping without
owning a car. In order to attract more potential customer to come for shopping, and
control specific peak time of working. ASDA could offer shuttle bus services in city
centre and in the Universities in daily service. Customer would appreciate this service
because of its convenience ASDA created for the consumers. At the same time, the
shuttle bus service in the city would be a great advertising opportunity for ASDA.
However. barrier of the shuttle bus service would be if the city council will allow the
ASDA to use the bus lane in the Brighton. Besides the potential cost of money in this
service.
The second recommendation we made for ASDA is thinking about planning a new same day
delivery service. Based on the feedback we collected from customers after visiting the ASDA located
in the Marina, we are confident that ASDA provides a wide range of services. However, since ASDA
has many strong competitors, and is quite far away from the town in Brighton,it should develop a
strategy to have a competitive advantage. So the feedback was all positive, however the main issue
was always the location. ASDA is one of the cheaper supermarkets in Brighton and therefore
students prefer to get their groceries from there. Though its location is inconvenient for students,

they tend to use the online shopping option. Having a same day delivery service would allow a
convenient and quick way to deliver groceries to our customers. So far no other supermarkets in
Brighton offer a same day delivery service, so this would be beneficial to the demand for our
products as we will be the only ones providing it. The same day delivery service, similar to our
normal delivery, will have an additional charge. This charge will probably be higher than our
normal delivery charges as customers will be more eager to get their products, and therefore willing
to spend more.
6. Appendix
Appendices, to include any appropriate calculations, background data etc.
Please limit the use of appendices and do not include pdf documents.
Typically, appendices may include images of the operation and/or
interview transcripts
Asda Peak Hours
Monday
Tuesday
Wednesday

Thursday
Friday
Saturday
Sunday
Introduction sources

Introduction of Asda Points of information to include:
1. Profits
2. Growth
3. Owned by Walmart
4. What does it do?
5. “It shows it’s possible to run low-cost hypermarkets and still enjoy strong profits.”
6. Private Co.
7. Market industry health
8. No. of stores
Sources
http://www.statista.com/statistics/300543/asda-number-of-stores-in-
the-united-kingdom-uk/
http://www.theguardian.com/business/2014/oct/10/asda-supermarket-5-percent-profit
http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/11919322/Asda-accounts-
reveal-profits-are-holding-up-despite-sales-slip.html
http://www.thisismoney.co.uk/money/news/article-3321847/Aldi-bigger-market-share-Waitrose-
Kantar.html
http://www.bbc.co.uk/news/business-34842198

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