BUSINESS SYSTEMS AND OPERATIONS

PART 1

B&M stores Business Operations Management

In any business, operations management is significant in ensuring there is efficiency. The success of a business lies in the efficiency in operations and management. For B&M, efficiency is very pivotal in its success given the tight competition in the UK market. A business strategy is created by the strategic plan, which is a long-range plan that ensures a business achieves its vision (Cummings and Worley, 2014 p 90). Business has different functions, and each function plays a significant role in supporting the success of the business (Barnes, 2001). The operations strategy adopted by a company develops the processes that will enable the business to deliver the products and services effectively to the customers. This involves undertaking different activities in consideration of the available resources leading to an efficient business processes model. The essential operation components include location and layout of the stores, capacity planning, handling of materials, products selection, process and product planning, inventory control, cost and quality control (Checkland 1999 p 20). All these components give a business a competitive advantage in the market.

B&M has three main objectives, which are low costs, quality products, and strategic sourcing. The comp nay sells grocery and non-grocery goods. The strategic plan of the company is using the grocery as the traffic driver. Customers are attracted by the low prices for grocery and in the process end up purchasing more than the grocery (Slack et al, 2004 p 34). The main objective of the B&M Company is to sell quality products at low prices. The company has a low price policy and manages to maintain it through high sourcing capabilities, low rent high traffic locations, and minimal investments. The company stores are not the most pleasing, but they offer customers the pricing policy they need.

B&M utilizes the 'one in one out’ policy to minimize the storage level while at the same time allowing the company to concentrate on the highest demanded products. This allows the company to manage stock and reduce the warehouse costs. B&M sources grocery products from local firms. The company specializes in offering better terms to the suppliers as opposed to their competitors. The company pays suppliers in cash for larger volumes enabling it to get the best prices as opposed to payment terms. The non-grocery products are sourced through the design and purchasing team. B&M designs the products and then sourced directly from factories in China. With no intermediaries, the company can secure the best prices.

B&M utilizes two store formats, which are small high street locations and larger big box locations. This allows the company to target customers in the streets and the parks. With the weak economic environment experienced in the UK in the years 2007-2011, B&M took the opportunity to seize space. With the decline in incomes, many stores were closed, and property owners were desperate to rent their stores. B&M was able to acquire attractive stores in high street locations at extremely low rents and favorable terms. Further, the company did not just concentrate on the high street locations rather it also looked to take their business out of town in big box sites, which were vacated over the low economic period (BBC, 2014). To maintain a high quality in products, the company sources grocery mainly from local suppliers and pay them cash on delivery. In addition, the non-grocery products are sourced directly from the manufacturer. This keeps the company ahead of its competitors in the industry.

Soft Systems Methodology (SSM)

Developed in the year 1991 by Peter Checkland, SSM is a tool for problem solving where issues can be complex in nature. SSM helps in formulating and structuring problems in human situations together with how the situation can be improved mostly in the management of change. Just like other systems approaches, the major objective of SSM is to compare the real world and the conceptual world. Such a comparison results in a better understanding of the world improvement ideas are discovered. SSM has seven stages, which tackle both the real world and conceptual world (Burge, 2015 p 15). The first stage is the problem situation, which tackles the real world.

The Problem Situation

Within the UK market, the grocery retail market is very competitive. Companies such as TESCO, Sainsbury’s, ASDA, and Morrison’s dominate the sector. Though B&M does not primarily concentrate with groceries alone, groceries are the traffic drivers in the company stores. Its major competitive advantage is high-quality groceries at low prices, which allows customers to utilize the discount policy in purchasing other non-grocery products in the stores. Most of these retailers in the grocery sector are increasingly adopting the internet as a tool of operations (Econsultancy, 2014). There is a shift in the purchasing patterns among the consumers in the UK. With the development of tablets and smart phones, more consumers have access to online shopping which has increased the trend of online grocery shopping.

Online grocery has emerged due to consumer’s habits and time convenience. With online shopping, a consumer can shop from the comfort of her/his house or in the office. In today’s economic environment, convenience is the key attribute to consumers. Consumers have tight schedules and have no time to visit stores to shop physically. In addition, physical shopping takes time and resources. Home delivery through online shopping is more convenient to the consumer. Currently, almost all the industries have adopted the online model of business. From selling of products to an offering of services, online business is the revolutionary competitive advantage being utilized by companies in this century.

The analysis above highlights why it is significant for B&M to introduce the online shopping service. The company had 450 outlets in the UK alone and targeted to reach 850 outlets. With its low prices, consumers have moved from the big supermarkets to the company’s stores. However, competition in the retail industry is very stiff, and the company has to indulge in online business for it to maintain its competitive advantage (Ocado Media Information, 2010). However, B&M faces many challenges in line with taking operations online. These challenges pose a complex problem when it comes to system management. The company has to consider the components that are involved in its operations model as it introduces the online operations.

Online Retail Sector models

When indulging in the online operations, the company should consider the factors that may affect them in taking a centralized or decentralized approach to managing stock, value chain, delivery chain and cost implications. There are different solutions within the sector that can be evaluated. Major retailer in the UK is the Tesco Company. Tesco is one of the retailers operating online. Tesco succeeded in its online efforts by utilizing the already available assets as opp

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