Sainsbury’s Operations Management
The major role of operations management is to make use of company strategies by ensuring that they are put into action, through various ways (Misra, 2008, p. 895. Sainsbury’s is one of the leading global retailers, competing with regional heavyweights such as Tesco, among others. The company was started in 1869, and right now it has about 1,200 supermarkets and stores around the globe, it has about 161,000 employees, better called colleagues (J-Sainsbury’s, 2014). Sainsbury’s has a team of managers, who are responsible for the implementation of important company strategies on a daily basis. Figure 1 below shows Sainsbury’s financial position in 2014.
|Amount||£357Million||14.5%||16.7%||£12.7 billion||24 million||161,000|
|Description||Underlying half year pre-tax profit||Underlying half year basic earnings share||The market share||Group Sales (Half Year)||Weekly customer transactions||Employees (Colleagues)|
At the helm of the operations board is the Chief Executive (Mike Coupe), then the following heads: John Rodgers (Chief Financial Officer); Helen Buck (Business Development Officer); Rodger Burnley (Retail and Operations Officer); Tim Fallowfield (Company Secretary and Corporate Services Director) and Peter Griffiths (CEO Sainsbury’s Bank), among others (J-Sainsbury’s, 2014). Most of the operations led by various managers in the company are aimed at enhancing the company’s position in the market, and making it more appealing to its clientele in the end. For instance, the retail company works on an ecosystem-related operations management plan, which aims at enhancing the conservation of fisheries (Sainsbury, Punt & Smith, 2000, p. 731). The company uses the Management-Strategy-Evaluation design as a way of focusing on all the important details that enhance effective operations management (Sainsbury, Punt & Smith, 2000, p. 731). Figure 2 below shows the operational data in terms of environmental conservation, even as the company continues to expand.
|Description||Annual Carbon emission reduction||Electricity supply from green power||Stores with natural refrigerant||Solar Panel installed|
There are many factors affecting the performance of any business, such as Sainsbury’s, and most of them are external. One such factor is the availability of strong competitors such as Tesco. Market entrants also divide the market share, as they come up with brilliant strategies to win their customers. Just as it is for other competitors in the market, it is the aim of every operations manager to ensure that the major objective of each activity is high consumer satisfaction (Parker, 2012, p.45). Economic stability of different nations is yet another factor influencing the decisions of Sainsbury’s, especially in terms of expansion. Economic meltdowns, for instance, affect customers’ purchasing power, and this also applies to political instability. The power of the customers due to the availability of competitors and substitute goods also influence Sainsbury’s prices. This is the case too where the suppliers have an increased power, as a result of supplier collusion, among other factors.
The role and importance of effective operations management
Supporting the Company’s Strategies
That operations management is an essential part of a business is a fact, and this manifests itself in a number of ways. For instance, it is the role of the process of operations management to support strategies that are developed by the board of directors (Pycraft, 2000, p.43). In this approach, it is the work of the operations management to come up with the essential resources that are going to make it possible for company strategies to be realized at the end of every operation (Pycraft, 2000, p.43). It is the work of the operations management to come up with ways that will ensure the most sustainable production processes, which ensure maximum cost-cutting for the company, as much as the strategies would allow.
It is the work of the operations management to ensure that the final product stand out in the market, as a better option among many. One thing for instance, is ensuring that the product is made through green processes, and that it is of high value, such as the fish. This positioning of products will come in the form of differentiation, where a company like Sainsbury’s sells the same product as Tesco, but makes it look different to attract more consumers. This will ensure more unique product details, and better prices, making it possible for the retailers to make more profits (HSC, n. d).
Product Differentiation for Varying Consumer Demands
The use of an effective operations management plan ensures that the business focuses on different customer demands (HSC, n. d). For instance, Sainsbury’s is a major retailer that deals in a huge amount of products, which target many different categories of consumers. In order for the company to focus on various consumers as effectively as possible, there is a need to ensure that a blanket strategy is developed, and implemented for the same. Such a strategy is then shared among the many departments of a company such as Sainsbury’s as seen above. Moreover, it is the operations management team that is responsible for the management of production processes up to when products reach the clients. For example, in the fisheries management plan stated above, it is the work of Sainsbury’s to manage fish rearing up to when various finished product are sold to customers (Sainsbury, Punt & Smith, 2000, p. 731). This is an effective way of enhancing product quality; hence, positioning products as of high value in the market.
The availability of an operations management plan makes it possible for the business to integrate various departments (HSC, n. d). Just as stated above, the Chief Executive comes up with a strategy, which ensures that the various involved departments know their roles towards the company goals in each project. The manager divides work among the departments and shows them where they need to integrate with other sectors and how they would be able to do it. Without a well-strategized operations management, it would be difficult for the departments to realize how they are supposed to contribute in various roles during the processes involved. This merit makes operations management an important tool of avoiding conflicts and saving time in the process of product development.
Performance Objectives of Sainsbury’s
- Great food
- Sourcing with integrity
- Respect the environment
- Sound Community Social Responsibility
- Great workplace for the “colleagues” (J-Sainsbury’s Annual Report, 2014)
4 Vs of Operations Management
- Volume: Sainsbury’s provides more food for less money
- Variety: Sainsbury’s provides different types of products in varying tastes
- Variation: services can be online or on-site, and there are delivery services too.
- Visibility: product labelling and shelf positioning makes it possible for store shoppers to see what they need. This is the same on the online stores. (Managers Door, 2013).
The operations performance objectives of organisations
Every organization has its own objectives when it comes to operations performance. For many retailers like Sainsbury’s customer service delivery is at the top of everything. For Sainsbury’s, for example, this all begins with the perfect treatment of its staff, using the slogan, “How we manage is how we serve” (Lewis & Trevitt, 2000, p. 6). According to this strategy, a satisfied staff member is usually capable of offering quality services to clients at all times. Therefore, the goal of high quality service delivery for customers becomes realisable. It is also the objective of organisations to ensure that the clients not only get quality services, but also receive quality goods every time they do transactions. For Sainsbury’s, this has been done through effective operations management, for instance through the fisheries management plan, where the production of high quality fish is ensured right from the farm level (Sainsbury, Punt & Smith, 2000, p. 731).
Colleagues who are satisfied always ensure that company goals succeed. Sainsbury’s has always wanted to ensure that its clients come back at all times. In a situation where delivery services are required, happy colleagues will always ensure time is kept (Annual Report, 2011). Through this annual report of 2011, the company found out that it was able to record at least 21 million transactions on a weekly basis, in the food sector, and this was higher than its previous fiscal year (Annual Report, 2011). This was a sign that the operations management’s goal of reduced prices and enhanced product quality worked perfectly, thanks to making Sainsbury’s a “Great Wok Place”.
Businesses also have the goals of enhancing their competitive advantage through growing in other ventures. Sainsbury’s has focused on this by developing non-food sectors to get a larger share of the market (J-Sainsbury’s, 2014). For instance, it developed the banking services as a way of grasping the financial market, to increase its growth. Moreover, other sectors such as the clothing brand, made it possible for the company to multiply its sales, according to the 2011 Annual Report. With these objectives, Sainsbury’s has been able to survive tough competition from many huge and small market entrants, to remain a force in the market, for many years. This is a sign of the important role an effective operations management strategy plays in the development of any business.
HSC., (n. d) Part 1: Role of Operations Management.
J-Sainsbury’s. (2014) Board Management
J-Sainsbury’s., (2014) Annual Report and Financial Statements, 2014.
Lewis, R., & Trevitt, R. (2000) Business: Vocational A level. Cheltenham: Stanley Thornes.
Managers Door., (2013) Top 5 – The Four V’s of Operations Management.
Misra, K. B. (2008) Handbook of performability engineering. London: Springer.
Parker, D. W. (2012) Service operations management: The total experience. Cheltenham: Edward Elgar.
Pycraft, M. (2000) Operations management. Cape Town: Pearson Education South Africa.
Sainsbury, K.J., Punt, A.E, & Smith A.D.M., (2000) Design of operational management strategies for achieving fishery ecosystem objectives. Journal of Marine Sciences, 57, 731-741.