Operational Analysis and Effectiveness Introduction

Operational Analysis and Effectiveness

Introduction The well-functioning of any organization in general, and of retail operators that directly work with the customer, in particular, depends on the efficiency and effectiveness of operations. Nowadays, customers are more and more demanding with the quality of service they receive and pay for. Given the strong competition on the retail market, where customers can easily switch from one retail operator to another in case they do not receive the required product or service quality, it is very important for retail operators to create and maintain an efficient service system The operational structure, referring to production and concept, is defined by the number and content of operational units, in this case the actual supermarket locations, their size and actual location, by the internal organization, and by cooperation relationships that are established within these units, in order to ensure that the company's object of activity is directly accomplished (McNamara, 2008).

Situation Presentation The following analysis focuses on analyzing the operational structure and its effectiveness for a high profile supermarket retail branch. The competitive advantage created and maintained through the supermarket's activity on the market is represented by providing excellent customer service and products. The company's managers have understood that in order to create a sustainable position on the market, it is imperative that the supermarket raises to high quality standards regarding the products delivered to the customers and the services that create the distinctive identity of the supermarket. However, it seems that the supermarket is starting to lose ground in favor of its competitors because the quality of service provided by the supermarket to its customers is in decline. If the situation continues to follow this descending direction, it will most likely lose more and more customers, which will be translated in decreased market share and market value, which will further affect supermarket's activity. It is imperative that the supermarket improves its situation. In order to achieve this objective, a supermarket retail branch operations analysis must be conducted.

Operational Analysis Necessity within the Supermarket Branches As mentioned above, the decreasing level of the quality of service has determined the supermarket's managers to seriously develop an operational analysis process. In my opinion, such an analysis should be conducted even during periods of time when there is no apparent problem that requires an analysis. The reason behind this statement relies on the fact that operational analyses are not only designed to investigate and to solve existing problems, but to forecast and prevent the emerge of such problems. Operational analysis, no matter what type of company and issues it addresses, should be considered as a formal, periodic analysis conducted by "service teams on operational assets, or parts of assets, during in-service management" (FAA, 2007). The necessity of periodically conducting operational analyses consists in the fact that such analyses are designed in order to discover whether the operational asset in case has an effective and efficient contribution to the performance of the supermarket, to the coast and other financial objectives, and to the safety and needs requested by customers, which are situated in the center of the company's strategy. Furthermore, the operational analysis is intended to determine the cost and the efficiency, in other words the performance of the operational asset under analysis. The findings of the analysis must be studied in comparison with the standards and objectives established by the company. The analysis will allow for estimation of future costs, benefits, or possible shortfall that might be determined by changes in the macro and microenvironment, or by internal factors.

Operational Analysis Process Implementation In order to conduct an efficient operational analysis it is very important to clearly establish the duration of time within the analysis will be performed. Given the fact that the operational analysis will be a general one, including all operations that compose the service activity delivered to customers, it is recommended that the analysis is performed during a period of time generally characterized by steady sales, unaffected by seasonal factors. In other words, it is recommended to avoid the winter holidays, the summer season with special offers and promotions, or any other holidays, celebrations and events of national importance. Such periods are characterized by increased demand from customers, especially for certain categories of products and services, the supermarket's service activity will be subjected to increased pressure, which could affect the quality of service because of the above mentioned factors. Therefore, the results of an operational analysis conducted during such periods would not lead to conclusive, objective results that should allow for further analysis, decision-making, and future strategies. As a consequence, it is recommended to perform the operational analysis on the supermarket's branch service during the beginning of spring or autumn season. It is estimated that such an analysis could be conducted for one month's period, in order to analyze both the weekend and weekly activity.

Factors Affecting Customer Service In order to implement successful customer service strategies it is vital to take into consideration the factors that affect customer service, factors that influence the efficiency, the effectiveness, and the productivity of the operations addressing customer service. These factors can also be studied in the operational analysis. The results must be measured against quality standards previously imposed by the supermarket's managers in order to provide the best quality service for existing and potential customers. Generally, the most important factors that affect a company's customer service quality include people, process, and technology (Jones, 2000). As a consequence, the operational analysis should focus on following these directions. Other general factors that affect a company's strategic direction regarding operations management are represented by improving product quality or by reducing product cost (Davig et al, 1991). More specific factors of influence that derive from the factors previously mentioned include: improving product quality, reducing product cost, improving product design, improving service, improving inventory and control, reducing lead times, improving scheduling, improving materials handling. The supermarket in case has focused its strategy on improving product and service quality, rather than on reducing costs. However, the declining level of service quality has revealed that either the quality improvement strategy has exceeded the period for which it was applicable, or the strategy was not flexible enough in order to adapt to changes produced by the external environment.

Operational Analysis Strategy The lack of success produced by the supermarket's strategy regarding customer service, which is translated in declining quality of service, was probably produced by either internal or external causes, or both. In order to determine the exact causes that led to the current situation of the supermarket and to develop strategies to counteract their effects, it is recommended to conduct both an internal and an external analysis. External Analysis The external analysis consists in studying the external factors that might have led to the current situation or the stakeholders affected by the situation in case. Given the fact that consumers must be the center of the supermarket's activity and that the declining quality of service is directly affecting them, it is only reasonable to focus part of this investigation on the supermarket's customers. Customers cannot provide information on the reasons and causes that determined service quality to decrease. They can however provide significant information on future objectives the supermarket's managers should take into consideration. Therefore, it is very useful to analyze all complaints received during recent months from customers. In addition to this, it is necessary to spread questionnaires among the supermarket's customers in order to determine the problems they are facing in relation with their experience in the supermarket. The questionnaire must refer to personnel's service in order to determine whether employees' attitude towards customers has depreciated and to take suitable measures. It should also address issues related to products, their placement, price and other. Questionnaires must come in both written and oral form. Also, they should allow the interviewee to express other issues that the questionnaire failed to address. Based on the responses, the supermarket's managers can identify any existing or potential aspects that threaten the quality of customers' experience within the supermarket's branches. They can further develop strategies and sub-strategies that must take into consideration the aspects identified by customers as problems. Internal Analysis The internal operational analysis is intended to determine any aspects that affect the factors that further influence the supermarket's customer service and, therefore, the quality of the service delivered to customers. As mentioned above, the internal analysis must review operations regarding the most important factors of influence for customer service: people, process, and technology. In order to be efficient and to deliver high quality service to customers, the supermarket's organizational structure must a supple, flexible one. It must not be composed by many departments. It should have bigger and more important departments, rather than smaller departments that require a more complex informational and communicational system. The more department and compartments a company's organizational structure has, the more time is required for information to travel on both the vertical and horizontal direction. This situation further leads to problems regarding the informational system. As a consequence, information can become redundant, it may not be received by the desired receiver, or it may be distorted. All these affect the well-functioning of the company's operations. As a consequence, a series of malfunctions start to emerge, they determine other problems, which result in not reaching the company's objectives, decreasing quality of products and services, and increased costs. The same situation happens in the case of the supermarket's branches. Each of these branches is run by a general manager and they establish their own sets of goals and objectives that must be aligned with the general strategy and objectives established at the headquarters of the company. This way, each branch activates like a profit center. However, it is difficult to control the branches. Although they establish their own objectives also in accordance with the customer targets of each branch, the demographics and the characteristics of the market in which each brand activates, the branches must be controlled at the center by the general management of the company. As mentioned above, one of the most influential factors on customer service is represented by people. Human resources represent the most important resource any company can exploit in order to create value, competitive advantage, and profit. The importance is even greater in the case of a supermarket, whose activity is deal directly with customers. In this case, the quality of service is directly proportional with the quality of employees' work. In this case, given the fact that the quality of service is declining, it is obvious that employees do not reach their potential or their established objectives. It is clearly a matter of employee performance. The reasons for which customers may not be satisfied with the quality of service regarding personnel may include: the speed of service, waiting time, employees' attitude and behavior. In other words, employee performance must be analyzed. In order to do so, it is important to start by studying the relationship diagram, in order to see who reports to whom, who collaborates with whom, and who manages whom. Cooperation between departments and compartments must also be analyzed. The analysis must continue with studying the job descriptions, especially those of employees that work directly with customers. This step is very important because it must be clearly determined whether employees' decreased efficiency is because their job description does not compel them to improve their activity, or because they do not work as hard as they should. In case the problem refers to the job description, the Human Resources manager, in collaboration with the managers of other departments must improve them in order to adjust to the requirements of each position and to the goals and objectives established by the supermarket's managers. In case the problem is with the employees, the Human Resources department must analyze the situation and start implementing solutions. Employees that do not fulfill their duties must be sanctioned in accordance with the company's rules, agreed by each employee when signing the work contract. Also, employees' activity may be improved by improving their skills, abilities, and knowledge, particularly by following a series of training programs intended to develop customer service skills. Although it may seem like a significant financial investment that could be postponed for when the financial crisis diminishes, the investment will produce medium term and long term effects that supermarket's customer service will benefit from. The company must implement a continuous improvement strategy (McNamara, 2008). However, the decline of the supermarket's quality of service cannot be attributed to employees only. Technology is another factor of influence on the quality of service. If the supermarket does not involve new technology in its operations, whether one refers to machinery and equipment or to computer software, the business processes will be slower and they will not reach the established results. This will further result in unsatisfied customers that will turn to the supermarket's competitors.