BUMGT6935 Operations Management: Analysis of Big W Melbourne

Introduction:

The following report is going to analyse the operations management of Big W Australia. Operations management, according to Krajewski, Ritzman & Malhotra (2013), is one of the major areas of management study and approach that constitutes the entire process of a business. As a matter of fact, the entire process of the production, product design and the supply, customer service management and other sectors of the entire business is wholly known as operations management (Talk, 2016). In a single word, operations management is considered to be the holistic approach of the entire business. This paper is going to succinctly elucidate the operational ventures undertaken by Big W Melbourne.

Coming to the details of the company it can be stated that the company is a chain of departmental store spread around the entire country. The company is one of the largest chains of departmental stroes in the country. In terms of assessing the entire operational details of the company, following segments are going to be taken into consideration.

1. Business Strategy of Big W
2. Application of 4 Vs
3. Performance objective of the Organisation
4. Identification of Problem and Opportunities of Improvement
5. Design of the Operations System
6. Supply Chain Management
7. Quality Assurance through JIT and TQM and benchmarking method

Depending on the analysis of the entire operational process of the company, a possible recommendation is going to be placed upon the setbacks.

About the Selected Organisation:

Since the paper delves in to the operations management performance of Big W, a profound understanding of the company and its basic business criteria needs to be identified. Big W is a chain of discount departmental stores working in Australia. The company was founded in the year 1964 in New South Wales. A business wing of Woolworths Limited, Big W has now become one of the largest practicing stores in the country. Currently the organisation is operating more than 180 stores in Australia (134 stores) as well as the Asian countries (46). With more than 22,000 employees all over the branches, the organisation has become a giant figure in the sector.  The paper is going to analyse the entire process of operations specifically in the Big W store of Melbourne Australia.   Melbourne, being one of the most crowded cities in the country has opened a doorway for the store to perform its positive business practices. In order to provide better service to the customers in the city, the organisation has adapted several operational strategies. Due to its linkage with Woolworths Market, the Big W is highly expected to maintain a certain standard in customer service provision and in the stock of it standard products. (BIG W - Woolworths Group, 2017) 

Business Strategies of big W Melbourne:

One of the newest business strategies adapted by Big W Melbourne is the turnaround strategy.  Though the newest business strategy has been “awkward” in terms of making a proper business deals with the suppliers and the vendors, it has started making a difference in its operations. With the recruitment of its new CEO, Sally McDonald, the organisation has begun to mode in a different direction from the way it was expected by the business critics.  Since all the business wings of Big W are linked with each other in terms of strategising business plans, the existing business strategies are almost same for most of the branches in the country. However, there is a little difference in accord with the local customers and the local market statement. On the basis of the customer flow and the demand- base there are some specific strategies found out during the visit to the store. There is a growing rate of retail spending in the Australian cities. As a matter of fact, there are different stores on the same business that have been showing business interest in the city of Melbourne.  The Melbourne store of Big W has more competitors more than the other cities. Hence, operations management and the business strategies pertaining to the betterment of such have sought for an innovative change after the recruitment of the new CEO of the company. Competitors like Target and Kmart are the strongest competitors to Big W.

Presently Kmart has become the largest departmental store chain in the country. in this case there is a certain need for a revamp strategic planning against the existing one. Hence, in the year v2016, the organisation has undertaken the turnaround strategy.  In the recent years the organisation has pulled numbers of buyer contracts and intentions to purchase without explanation. Though the company has tried to keep this controversial, the news spread through different financial media services.  The main intention of the organisation was to put a certain check on the suppliers as there has been a need to cut the cost of supply and increase the amount of it. The contact with the suppliers has been held without any prior notice thus creating a platform for competition among the suppliers to the retails stores. The plan of the CEO consisted of cost cutting, brand rejuvenation and driving the growth of sales.

Transition of Direct Source Model:

In order to put innovation in the own brand, the organization has chosen the method of transition of its direct source model. The organisation has chosen to work with the local suppliers. As a matter of fact there is a direct need for identifying the suppliers who have direct access to the market and the resources. The organisation also chooses to perform effective business with the product agents so as to ensure an unhindered business transition.  There has been a thorough reduction of the customers of the organisation and the percentage of sales fell more than 39% in the financial year 2015-16. Hence, there was a certain need for the strategic changes in the business. The transitional business method of Big W ensures that the newly adopted business plan does not negotiate with the quality of supply from the contracted suppliers.  

V’s of Operations Management:

While understanding the 4 V’s of operations management one needs to focus on the dimensions of the business. The major change that the organisation has brought into effect is one the supply chain management.  4 V’s refers to: volume dimension, variety dimension, variation dimension and visibility dimension.  As a matter of fact there is a clear understanding of the exact method of how the organisation is running its operations management through the improvisation of its store management and supply chain management.

It has earlier been stated that Big W Melbourne has the objective of maintaining high volume of the products despite lowering down the cost of procurement. The suppliers to the company have been focusing on prospect of local supply so as to lessen the burden of contracting suppliers overseas. As the customers have the tendency to purchase products with lower price, the store also wants to g with the flow. As a matter of fact, there is a chance of creating the prospect of different segments such as the local supply chain as well as the range of greater retail business. In this case, the organisation does not tend to compromise with the products it provides to the local customers. There is also a tendency of repetitive tasks. It includes the repetition of the products it procures from the suppliers.  Since the store deals more with the city customers than with the national level customers, it has the possibility to provide them with good offer. The combination of volume and price from the suppliers’ point of view is quite profitable as there is a high possibility for the acceptance of the low cost supply method. However, the risk lies in the fact that the suppliers do not confirm and assure the organisation with the quality of the product in its supply line.

The variety dimension refers to the the varieties of different products approaching towards sales. In this aspect there is a high chance for the organisation to provide the customers with a wide range of varieties in one product as well as different products. For instance, the clothes available in the stores do not have much dimensional varieties. However, the store thrives to maintain the dimensional variety in the storage so as to create a broad platform in the product lining.  With the help of effective supply chain the operations of the product storage has put a positive impact upon the sales of the store.  In recent years the organisation has applied newer dimensions in its customer services through different delivery options. It is quite clear that the company aims at reaching to the greater number of the customers. Hence, with proper employee training and purchasing of the vehicles, it has ensured overt dimension in the service provision to the greater number of customers.

The variation dimension refers to the variation of same component. In this section, the dimensional performance of the store has been taken into consideration. As a departmental store, Big W does not offer multiple selections to the customers. Since, the company procure goods from the local suppliers; there is a mild chance of the products being various in companies.  As a matter of fact, the basic criterion of the store is to increase the number of singular products. For instance, Big W has more number of Nikon digital cameras than the other companies. Hence, the customers are left with very little choice. Due to local influence of the suppliers, the organisation cannot approach to them for increasing the variety in the products. Hence, there is little variation in the storage of same products in the store.

Visibility dimension refers to the ability of the customers to see and track their experience through the operations process. The customers demand in terms of the understanding level of the products and the service they are provided by the company.  Big W lets the customers track their product details and the products on offer with the help catalogue system.  Though online catalogue system is quite conventional, many companies have been using a detailed catalogue system that would provide a customer with the overview of its choice. Being a retail company, Big W provides the customers with high level of visibility.  It put direct impact upon the customer experience of the products or the services it provides to them.

Competitiveness of the Organisation: 

With the news of Woolworth’s resignation from Big W, the entire market of the organisation has been shattered. In this aspect there is a sheer understanding g of the ongoing market reputation of the company. The competitiveness of Big W was highly supported by Woolworths. Though the news was told to be a rumour, it was quite effective in creating a market sensation for the organisation.

Process Design:

Product design is also known as product development.  The product development or the product design differs according to the size of the company. Since big W does not produce materials the organisation does not focus on product design. The operations management of the organisation focuses on the process design. In this aspect there is a need for the company to change the process of the operations so as to bring vitality and advancement thus ensuring profit.

Big W’s process design team have identified that a process oriented approach needs to be followed while ensuring operations and future growth of the company. in order  to enable the factor, a process design team has been formed by the Big W management. The team operates from all of the departmental stores in the country. In terms of Melbourne store, it can be said that the process design team works on customer analysis and change in the mode of existing process according to the change in the requirement of the customers. The process design management has been adopted through the usage of ARIS Business Architect and ARIS Business Designer. A clear understanding of the relevant theories has been taken into consideration.  In order to assess the operational issues of the company, the TQM theory has been implemented.  There are different segments of total quality management.  This can be discussed with the help of customer focused system, total employee involvement, process- centred management, integrated system management.

Customer Focused Management:  

In order to make the customers determine the quality level of the products, the customer focus theory has been taken into consideration. According to this model, the employees are provided with adequate training to confirm customer satisfaction and customer need.  

Total Employee Involvement:

According to this theory, all the employees of a company tend to work for a common goal.  This is carried out with the help of empowerment of the employees. With the help of high performance work system an integrated improvement is ensured within the organisations. An example of empowerment of the employees is the self managed working of the teams.

Process Centred Management:

This is the most fundamental part of Total Quality Management.  According to this theory, a process is a series of measures that receives inputs- both integral and external. It then transforms those inputs into outputs. As a matter of fact, there is a clear understanding of the effective process that is defined during the process thinking.

With the help of continuous improvement based on the entire customer satisfaction level,

 These two are the key modelling tool for bring required changes. The key objectives of Big W’s process design are:

1. Developing Capability to implement Business Process Management
2. Establishing a centre of competency for the analysis of the process thus tending to reuse.
3. Deployment of an inclusive scheme and process enhancement methodology
4. Sustaining and mentoring projects to perk up outcomes of scheme at Big W

Fig: Process Flow Chart

Source: Created by the Author

Explanation of the Diagram:

In terms of making a proper design of the process, there needs a comprehensive understanding pf the entire process. The entire process for all the wings and the other business branches of the mother company Woolworths has been shouldered upon Leonardo Consulting.  Due to third party intervention in the business, the extra burden from the core business performance has been eased. Leonardo consulting with the help of process design team has been working comprehensively for bringing change in the organisation. Following factors have been taken into consideration while designing the business process of the organisation. These are: methodology, internal training, corporate governance, communication, process improvement methodology, process centric benchmarking, reusing of the business process or the products. The aforementioned diagram depicts the process of the store in terms of its operations and process management.  The methodology of the organisation in terms of providing the basic service to the customers, the company ensures proper modification of corporate governance. 

Process Technologies:

Process technology refers to the technological acceptance of the companies in bringing the required changes during the operations management process. With the assistance from Cognizant the company has undertaken several technologically advanced processes that could bring positive changes in the entire change management process. (Passion and Power: The Technology of Orgasm, 2017)

Supply Chain Network:

Fig; Supply Chain Network of Big W

Source: Created by the Author

Managing Supply Chain (Explaining the Diagram):

With the provision of effective vendor’s portal in the website of the company, the suppliers have been facilitated by the company. The company has provided the vendors with required information so as to contact the respective personnel in need. The vendor’s support home in this case has been effective in providing support to the suppliers. Since the organisation has decided to perform its procurement from the local suppliers, it has focused on effective relationship with the vendors (Information for Vendors, 2017).

With sixty days’ term on the payment procedure, there has been a clear description by the company pertaining to the payment in lieu of the supplied materials. With electronic Fund Transfer Method Big W performs its payment processes. Big W has also introduced Electronic trading method with the help of its technological advancement. The entire process is invigilated by the banking partner of the company. (bigw.com.au, 2017)  

Conclusion:

The organisation has different segments in terms of practicing effective operations management.  The major deficit found during the analysis of the company’s supply chain is the selection of the suppliers. Though the supply chain method ensures lesser cost on the procurement process, the quality needs to be assured.  As a matter of fact, there are different methods undertaken by the company in order to maximise the profit with low cost level and high dimensional work force.

Recommendation:

The company ought to recover the setbacks through the following recommended procedures:

1. i) Needs to ensure the quality over quantity of the procured materials
2. ii) Need to advance the integration between the suppliers and the stores
3. iii) Need to create a profile for the employees for better performance so as to ensure employee engagement

References:

BIG W - Woolworths Group. (2017). Woolworthsgroup.com.au. Retrieved 27 May 2017, from https://www.woolworthsgroup.com.au/page/about-us/our-brands/portfolio-businesses/BIG_W

bigw.com.au. (2017). Bigw.com.au. Retrieved 27 May 2017, from https://www.bigw.com.au/medias/BIG-W-Vendor-Guide-April-2017.pdf?context=bWFzdGVyfHJvb3R8MjA2MzU3OHxhcHBsaWNhdGlvbi9wZGZ8aDlkL2hhZS8xMDg5MjQzNzU1MzE4Mi5wZGZ8NTAzODhlNTdmZjkzYTBjYTZmMDZjNzdiNTYyN2E0N2FlMGQ4ODgzNTE3ODhiZTA1NTI1NmQxYjliYmVjOGFlZA

Information for Vendors. (2017). BIG W. Retrieved 27 May 2017, from https://www.bigw.com.au/help/vendors-content

Krajewski, L. J., Ritzman, L. P., & Malhotra, M. K. (2013). Operations management: Processes and supply chains (Vol. 1). New York: Pearson.

Passion and Power: The Technology of Orgasm. (2017). BIG W. Retrieved 27 May 2017, from https://www.bigw.com.au/product/passion-and-power-the-technology-of-orgasm/p/WCC100000000063852/

Talk, O. M. (2016). Operations management.