Operations Management: Technology and Operations sample essay

Effective operations management is one of the most important factors relating to the sucess or in some cases failures of an organisation or company ”because markets are volatile and demand uncertain, it is imperative that organisations become more responsive” (Christopher, M 2005:142 ) Because of this; organistaions are becoming heavily reliant on technology to perform duties that simply, because of the scale of operations, are not efficient to do ‘by hand’ . In order to remain competitive, organisations need to respond to the five main objectives of Operations which are : Speed, Flexibility, Dependability, quality and cost. The type of market is the decider of which of these objectives take priority.

The aim of this assignment, using several different sources, is to provide an analysis of the technology available in different areas of operations and to provide a commentary on how they are acheiving the goals companies are employing them for.

In the retail sector, technology is at the forefront of a smooth and successful operation. Customers will always see their time as a commodity therefore it is important that their experience at the store is as seamless as can be. In this consumerist age that we live in, customers are demanding a lot more from retailers. For example; customers expect that if they give their details once, they will be recorded ‘on the system’ which eliminates the need for them to produce them again. One of the methods used to aid this is the Electronic Point Of Sale system. Initially introduced to automatically tally the total of goods purchased, EPOS systems have evolved to be multifuntional and serve many purposes. Fashion jewellery retailer Swarovski are one of the many companys that use such a system. Initially, the programme used by Swarovski was a DOS based one called Retail Pro.

By definition of RetailPro.Com (2011) ”Retail Pro provides retail software for point of sale and retail management that helps retailers around the world operate more effectively, with a greater return on their technology investment.” This system however was not able to cope with their expansion as a company and according to a member of staff in the I.T. Department ” it was becoming ‘Increasingly difficult to manage and was requiring more human intervention than was justifiable for the price’. (Stewart Pender. 2011).

In May 2011, Swarovski swithched to a more advanced EPOS system that was able to efficiently manage their Point Of Sale (POS), Merchandising, Store operations and inventory control with a higher level efficiency and dependability at a lower cost. Micros was the new software introduced to Swarovski to improve efficiency and aid smoother operations. This new system also meant that their inventory control was now fully automated and linked directly to the EPOS. Micros designed their Micros X-Store to be able to monitor stock levels.

Once an item is scanned on the EPOS sytem, unbeknownst to the customer the system interacts with the SAP (a global computer system to which Swarovski have access) to communicate that the item has been sold, therefore stock levels are now down by one. This occurs in Swarovski everytime an item is sold up until the cut off time, which is monday afternoon. Once the afternoon comes, the Mircos X-Store system culminates all the data it has gathered over the week and works out the ideal quantity of each individual item to re order against current inventory levels.

Once this has been done, the sytems sends the order to head office where it can then be forwarded to the warehouse for picking and delivery. The automated re ordering improves lead times and overall speed of stock replenishment times. Aside from the merchandising aspect, the Micros X-Store is capable of handling human resource functions. It can manage employee reproductivity reports, employee borrow function (temporarily assigning collegues to other stores) and organise and manage customer information.

Working from a fully automated warehouse the SCP Sytem receives the orders and begins to work on store specific order fufilment . Firstly, the order goes through what is called the ‘Schaefer Pack Pattern Generator’ (SPPG) which based on many complex alogarithyms, determines the optimum weight and height for the finished pallate depending on the weight and amzingly ‘stackability’ of the individual items in the order. By doing this, the SPPG can reduce the amount of pallates needing therefeore havign a direct positive impact on shipping and transport costs.

As well as all of this, the SPPG generates a ‘pallate building plan’. This plan enables the next system to pick the items in the most logical sequence in relation to time and allows the items to be placed on the pallate in a ‘store friendly sequence’. By organising items into a store friendly sequence, the person unloading the items at the store does not need to spend time wandering back and forth as the items would have been palatised in respect to the store.

Already a seemingly small software package has had an incredible impact on the effectiveness , efficiency and cost by ••Fully utilising maximum height and weight permittance by achieveing optimium packaging density ••Forecasting item positioning as to reduce damage to goods ••Positioning goods correctly for optimum stability during transport. After the SPPG has done its job, another programme; Schaefer Case Picking (SCP) sytem comes in. The SCP is an automated picking system that actualises the work of the SPPG. Once it has received teh orders from the SPPG, the SCP goes about selecting the goods in order.

As aforementioned, the goods are selected in the most time effeicent was as to once again improve efficiency and reduce manual labour costs. As the sytems uses an optical identification known as ‘ the vision system’, there is no need for RFID Identification tags that are very common and popular in the industry, but can be rather expensive. As the goods are selected, they are placed into a buffer area until all the goods for that order have been selected. When selection is complete the items are then placed onto the pallet in the ‘store friendly order’ as calculated by the SPPG. Once complete, the pallets are then stretch wrapped which makes them optimised in terms of goods vs density and secure for transit.

The flexibility they have means that the customer’s best interests are always kept at heart and they can avoid any disruption to service by having a multitude of couriers to choose from. One of the couriers that ASOS use is CitySprint. Based in the UK, CitySprint specialise in same and next day delivery. When an order is placed with ASOS, it is packaged by hand in the warehouse and taken to the collection point. ‘Despite increasing automation, people are still essential in most operating systems’. (Wild, R. 2005 243) From the minute it is picked up by the courier the customer has the option to track it from warehouse to their front door. By scanning the bar code of the parcel, the courier is ‘accepting the job’ and it is ready for despatch.

As soon as the order has been despatched, the customer is e-mailed a unique tracking I.D., Which will allow them to follow the journey of their item(s). CourierLocator, which is CitySprint’s own technology, is what allows all of this to be possible. Every courier carries a small hand held GPS enabled device called a CityTrackker. Small but powerful, the CityTrackker’s; using CitySprint bespoke technology and a network of anywhere up to 24 satellites wirelessly transmits live real-time information on the couriers location (including latitude and longitude) back to the FleetMapper (A system that depicts the location of all ‘on call’ couriers).

On request, the client (in this case ASOS) can request information on several different couriers anywhere in the UK at the click of a mouse. This kind of technology also puts the customer at the forefront of operations. By logging onto either their ASOS account, or the CitySprint website directly, the customer is able to also see the exact real-time location of the courier delivering their parcel. With such methods, ASOS; using CitySprint’s technology, is giving the customer more flexibility and a heightened sense of dependability by putting them in what seems to be control of the delivery process.