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Environmental Factors Affecting The Operations Management Commerce Essay

Paper Type: Free Essay Subject: Commerce
Wordcount: 2764 words Published: 1st Jan 2015

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Increase emphasis is going towards reduce waste, recycle and reuse product parts. Societies and communities have stressed the need on enteritis whereby controls over waste disposals, global warming and other environmental issues are highly expected. Meeting Environmental quality standards are one of the key main aspects played by operations management

The significance of this issue is demon- started by a set of standards termed ISO 14000. Developed by the International Organization for Standardization (ISO), these standards provide guidelines and a cortication program documenting a company’s environmentally responsible actions.

Key environmental factors basically affecting operations management can be identifiable as MICRO and MACRO environmental aspects as:


Labor inefficiency

Organizational structure

Organizational culture





Economic conditions

Governmental issues and regulations

As far as the Alton Ltd is concerned one of the key environmental aspect can be indicated to be the change in economic environment of UK where the purchasing power of the people goes

Down then adverse impacts could be expected. As a result visitors may demand even lower prices than 19 pounds per head having in mind the 2o million pound investments made to improve activities in the park. As a precautionary measure Alton can enter into a hedging deal if the economic conditions expected to be unacceptable.

Higher labor cost would be another environmental fact that can bring down the profit margin if the company has no proper control over the number of employees assigned irrespective of peak or off peak.

Different perception of work measurement(

As far as work measurement is concerned it is a process of establishing the precise time duration that would be efficiently taken by a qualified worker at a designated degree of performance.

In the view of work measurement there are number of techniques have been set up to full fill the purpose. Regardless of whatever the technique in use the basis consists of three phases

an psychotherapy phase in which the job is spited into convenient, isolated components, commonly known as elements;

a measurement phase in which the specific measurement technique is used to ascertain the time required (by a qualified worker working at a defined level of performance) to complete each element of work;

a amalgamation phase in which the various elemental times are added, together with appropriate allowances (see below), to construct the standard time for the complete job.

The techniques used to measure work can be classified into those that depend on direct observation of work, and those that do not.

For example, some techniques, such as pre determined motion systems and the use of synthetic or standard data can provide times from simulation or even visualization of the work. However, the data on which such techniques are based were almost certainly based on earlier observation of actual work.

Choosing a measurement technique

The choice of a suitable measurement technique depends on a number of factors including:

the purpose of the measurement;

the level of detail required;

the time available for the measurement;

the existence of available predetermined data;

The cost of measurement.

It can be said that there is a tradeoff between some of these critical factors. For example techniques which derive times rapidly may result in relatively less suitable for some processes. Some purposes, such as the establishment of individual performance levels on short-cycle work.

The main advantage of structured and systematic work measurement is that it enables a common platform for appraising and comparison of all types of work. The results obtained from work measurement are commonly used as the basis of the planning and scheduling of work, manpower planning, work balancing in team working, costing, labor performance measurement, and financial incentives. They are less commonly used as the basis of product design, methods comparison, work sequencing and workplace design.

2 Task two

Various Operation strategies adopted by Tesco Ltd

According to the given scenario (scenario 2) Tesco is a leading giant with its core strategic business unit being chain of super markets having its presence in overseas as well. Number of operational strategies can be quoted in the given scenario which is attributable to strategic, tactical and operational levels.

According to Tesco with its reputation to value as a strategic measure it has launched a web page that facilitated non food items as well as financial services

As per the tactical aspect Tesco has introduced different formats for shopping accompanied by It assisted improved customer relations that will affect long term sustainability of the entity

Through operations management Tesco will be in a position to maintain its critical success factors like “Own Brand image” and tightened supplier relations that gains cost advantage, in turn will add value to its short, intermediate and long term decisions in a more favorable manner.

For an example, given the fact its sales growth reads around 21.9%. Cost allocations, budget preparations and controlling distributions to high sale segments and assigning employees to appropriate outlets can be strategically determined through effective and efficient operations management.

Strategic importance of operations management in the decision making process

3 Task three

When it comes to designing of a product or services number of factors will affect the process such as

Customer expectation

Threat of substitutability

Product or service viability

Restrictions from government and various social organizations

Access to raw materials and effect on the existing product portfolio.

Conversely, if the designing stage can be implemented successfully then the company would end up with high earning potentials that will also contribute to stakeholder wealth maximization. Long term sustainability may also be foothold on that particular new designed product enabling newly emerged markets etc..

4 Task four

Capacity planning and control is an issue which is faced by almost every process in a given organization. Furthermore it can affect directly to the efficiency and effectiveness of the operation. Capacity planning and control is concerned with making sure there is some level of balance between demand placed on an operation and its ability to fulfill the demand. If an operation has too much capacity at any point in time it will be underutilizing it resources, paying out for machinery and facilities and often paying its staff but, because demand is lower than capacity, its costs are spread over two few customers. As a result the cost per customer will be very high. If it has too little capacity, its costs will be low (because its facilities will be fully utilized)however its capacity will be very poor as it is either turning customer away or making them wait for their product s or services. In light of this, it will undermine the company’s success towards the future. Therefore there are serious consequences of getting the balance between demand and capacity wrong.

Tesco can gain cost benefits with more appropriate allocation of supermarket space for fast moving items and also allocating employees at correct capacity without inputting more labor nor inputs that will lead to diminishing returns.

Decisions are aimed at providing the total amount of capacity at the right place at the precise time. There are number of factors to be looked into before arriving at its final decision on where to establish, but the ideal locations are where the costs are at lowest. When it comes to the long term view capacity planning is largely determined by the size of the facilities provided. Like availability of a trained workforce, staffing levels in terms of market demand and need to make the stable workforce, number of people in operations, cost of land and premises. In the short course available capacity must be allocated for the relevant task by scheduling the number of people. Equipment etc…

Inventory planning and control systems

Inventory control system is a process for managing and locating objects or materials. In common usage, the term may also refer to just the software components.

Modern inventory control systems often rely upon barcodes and RFID tags to provide automatic identification of inventory objects. In an academic study performed at WALMART, RFID reduced Out of Stocks by 30 percent for products selling between 0.1 and 15 units a day. Inventory objects could include any kind of physical asset: merchandise, consumables, fixed assets, circulating tools, library books, or capital equipment. To record an inventory transaction, the system uses a BARCODE SCANNER or FRFID READER to automatically identify the inventory object, and then collects additional information from the operators via fixed terminals mobile computers

Buffer inventory is required as:

1. Compensation for differences in the timing of supply and demand

2. Compensation for the uncertainties inherent in supply and demand

3. One or more stages in the operation cannot supply all the items it produces simultaneously

4. Material cannot be transported instantaneously between the point of supply and the point of demand


Today maintain inventory levels have become a tuff challenge. inventory not being managed would result in adverse manner where substantial expenses will incur..

Fortunately, there are management information systems that exist which use microcomputers and a variety of industry specific software. The cost of carrying inventory today has become a major expenditure and requires immediate attention. The benefits of inventory control far outweigh the costs. Any reduction in inventories, whether it is raw material, work-in-process, finished goods or supplies, can have a dramatic impact on your bottom line.

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Industry averages suggest that a 20 percent DETERIORATION in inventory is achievable with a computerized inventory control system. For a entity with a yearly sales volume of $1 million, such a reduction would result in savings of $14,400 per annum and would free up $48,000 of new dollars for reinvestment. For a entity with a yearly sales volume of $10 million, the figures are proportionately higher: $144,000 per year in savings and $480,000 in new dollars for reinvestment.

5 Task five

Operations strategies that can be used for Tesco

Basically retail industry involve in the business of sale of new or used goods to the end consumer for personal or household consumption purposes. Since the cut-throat competition is becoming tougher in retail space with increasingly growing supply and demand.

In order to continuously improve on the processes and leverage on the core competencies, in the case of TESCO (OWN BRAND NAME AND ECONOMIES OF SCALE) there is a need for a foundation that provides accurate information wherever whenever require. This brings the need for the strategic management of supplies and inventory as far as retail industry is concerned. To change an in-store paper based environment of registering sales in retail shops to an online shopping environment, there is a need for integration would arise in order to enhance customer satisfaction, increase productivity and liberate sales from registering chores and extend market beyond traditional bounds.

To sustain and over grow in the market place enriching category, item planning, streamlining product introductions and other business strategies alone will not be sufficient, nevertheless to improve the customer experience and further differentiate the brand real time visibility to sales and order status, in store kiosks, and service desk encasements and strategic technologies to track inventory have become the call.

New efficiency I managing the stocks and collaborative forecasting and replenishment help ensure the product customers want are readily available on store shelves.

For a leading retailer like Tesco inventory lying would be of great use since it holds on to substantial inventory levels that are associated with higher stock holding costs. Nevertheless risk of inventories being destroyed is also there resulting In disastrous effects.

In contrast Tesco and Alton towers ltd are two extreme entities catering to different industries where Tesco is more physical assets and labor oriented whereas Alton is more or less into services..

In comparison both the entities have to have better control mechanism with efficient control over labor, resource management etc

Project management and quality control

Project Managers take decisions in planning and monitoring tasks and resources, control cost and budgets and identify and resolve issues associated with the project.

To be successful the operation management should undertake the range of competing requirements for resources. The project managers must retain all levels of operation management by monitoring current projects in an aggregate form. They can provide the operation management tools and expertise to make informed decisions that improve the organization as a whole. Without a single point of project planning and control, decisions such as resource assignments and issue reorganization that are not effective. For an organization to accomplish project management successfully, they must organize the track for resource allocations throughout the organization.

Compare and contrast between retail and service operations in the view of Tesco and Alton Ltd

As far as the two entities are concerned Tesco would emphasize more on its product, distribution channels as well as employees working under the company. On top of that Tesco is currently maintaining strategic business units such as Tele communication, groceries, non food items and provision of financial services could be segregated from Alton Ltd which has one strategic business units operated in as a hotel and concerned on solely on providing customer friendly services in its theme park.

In a broader scale Tesco with its chain of super markets operated in different geographical areas where activities would be concentrated based on its various economic factors, cultures etc nevertheless. Of its critical success factors namely brands, lower prices being maintained, and local approach for advertising and marketing will have to be maintained in order to operate at current capacity as well as future growth potential.


Concerning the facts included in the aforementioned report it can be concluded that Alton Ltd has future potential of having a steady growth in to the future whilst Tesco seems to be struggling to remain in Monopoly status through effective and efficient .operations management.

On top of that it would be more appropriate Alton Ltd could further allocate the theme park separately for a certain age group and train the workers to undertake any jobs specialized to that particular area (area allocated to specific age group)also multi task capable workers would improve the efficiencies in the operations inside the park in a instance of absence of employee for a major task.

Tesco will be required to minimize the regulation pressure currently confronted with and improve in customer base through innovative thinking such as launch of Tesco.com and maintaining better customer relations,

Since Tesco is equipped with few strategic business units, its corporate level strategies are bound with these business units which will enable the company to evolve if the cooperate and business strategies are achieved through its effective operation management

Better relationship with suppliers would enable Tesco to maintain economies of scale in an inflationary situation over its other key competitors.






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