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Operations Management: Pret A Manger

Question: Unit 34: Operations Management

Described by the press as having ‘revolutionized the concept of sandwich making and eating’, Prêt A Manger opened its first shop in London in the mid 1980s. Now it has over 130 shops in the UK, New York, Hong Kong and Tokyo. The company says its secret is to focus continually on quality – not just of the food but in every aspect of the operations practice. It goes to extraordinary lengths to avoid the chemicals and preservatives common in most ‘fast’ food. ‘Many food retailers focus on extending the shelf life of their food, but that’s of no interest to us.

We maintain our edge by selling food that simply can’t be beaten for freshness. At the end of the day, we give whatever we haven’t sold to charity to help feed those who would otherwise go hungry. When we were just starting out, a big supplier tried to sell us coleslaw that lasted sixteen days. Can you imagine, salad that lasts sixteen days? There and then we decided Prêt would stick to wholesome fresh food – natural stuff. We have not changed that policy.

The first Prêt A Manger shop had its own kitchen where fresh ingredients were delivered first thing every morning and food was prepared throughout the day. Every Prêt shop since has followed this model. The team members serving on the tills at lunchtime will have been making sandwiches in the kitchen that morning. The company rejected the idea of a huge centralized sandwich factory even though it could significantly reduce costs. Prêt also owns and manages all its shops directly so that it can ensure consistently high standards in all its shops. ‘We are determined never to forget that our hardworking people make all the difference.

They are our heart and soul. When they care, our business is sound. If they cease to care, our business goes down the drain. In a retail sector where high staff turnover is normal, we’re pleased to say our people are much more likely to stay around. We work hard at building great teams. We take our reward schemes and career opportunities very seriously. We don’t work nights (generally), we wear jeans, we party!’ Customer feedback is regarded as being particularly important at Prêt. Examining customers’ An improvement idea is a key part of weekly management meetings and of the daily team briefs in each shop.

(Source: Slack N, Operations Management, Prentice Hill Financial times, Fifth Edition)

Task 1:-

You are required to read the case study on Pret A Manger and answer the following questions in an essay format. It is advised to visit Prêt a Manager and conduct further research to gain a better understanding of their operations.

a.) Explain why operations management is important to Prêt a Manager (AC 1.1)

b.) Analyse the operations functions of Prêt a Manager (AC 1.2)

c.) Using a process model evaluate the operations management of Prêt a Manager(AC1.3)

d.) Assess how important economy, efficiency and effectiveness is to Prêt a Manager (AC.2.1)

e.) Through using a PESTEL analysis, assess the impact of the tension between cost minimisation and quality maximisation that Prêt a Manager could experience (AC2.2)

f.) Evaluate the significance of cost, dependability, flexibility, quality and speed (five OM performance objectives) that underpin operations management in Prêt a Manager (AC 2.3)

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Task 2:-

You are required to prepare a business report on a company production process. Your report should include where necessary tables, flow charts and diagrams. Your business report should be designed in a professional manner using headings and subheadings.

a.) Choose any companies production line and assess how they use liner programming to add value to the production process (AC3.1)

b.) Evaluate the critical path analysis and network planning of a production line in your chosen company through using flows charts and diagrams. (AC3.2)

c.) With reference to your chosen companies’ production line, justify the need for operational planning and control with reference to capacity planning, inventory planning, project management and quality assurances. (AC 3.3)

Task 3

You have been asked by a company of your choice to assist in the production of an operational plan for operational sales unit of a company. You have been asked to prepare PowerPoint slides and give a presentation on the following:

a.) Produce a set of clearly defined operational outcomes for an operational sales unit with reference made to the five performance objectives. (AC 4.1)

b.) Produce a network plan indicating the resultant critical path analysis for your chosen operational sales unit (4.2)

c.) Justify how quality management techniques are applied to improve operations in your chosen company’s. (4.3)

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Answer Task 1:-

1.1 EXPLAIN WHY OPERATIONS MANAGEMENT IS IMPORTANT TO PRÊT A MANAGER.

Prêt a Manger is a French word which means ‘ready to eat.’ It is a famous food chain founded in United Kingdom in 1984 by Jeffrey Hyman. The food chain is known for freshness of its products. The company follows a policy of using zero preservatives and thus the products it offers have no shelf life. The products prepared are sold on the same day they are prepared, and the remaining unsold stuff goes to charity. It is a very difficult feature to maintain across all the stores which are owned directly by the company. This company could not afford to have a discrepancy in the quality standards in different stores across different countries. So they follow stringent quality control method everywhere, in all the stores around the world (Hill, 2005).

Everyday raw materials are delivered at every store of the company. The staffs follow a set of standard procedures to prepare the products. Thus, it is an integral factor for a company to adopt operations management techniques to provide customers with a quality product and keep their trust intact in terms of providing product with freshness and quality (Slack, Chambers and Johnston, 2010). The employees are thus accordingly trained to maintain the high standards.

1.2 ANALYSE THE OPERATIONS FUNCTIONS OF PRÊT A MANAGER.

The store manager plays a crucial role in the operation management (Schmenner and Swink, 1998). He has a copy of projection of sale of that day with him. Accordingly he coordinates with the suppliers for the desired raw materials. Once the raw materials are delivered the store manager gives instruction about the quantity of different products to be made. He has to take care of the quality control and ensure freshness of the products for which the brand is renowned for. The manager also has to ensure that the services are done timely, and the store is ready with the products at the lunch time. Roles have to be assigned for all the staff members, which include working in the kitchen or taking orders as per the store’s requirement or the person’s skill. The manager himself works at different levels as per the requirement of the store (Hill, 2005). Also, he is responsible for taking feedback from the customers.

1.3 USING A PROCESS MODEL EVALUATES THE OPERATIONS MANAGEMENT OF PRÊT A MANAGER.

The operation management of any store of PRÊT A MANGER has the following important steps which are known as the process model. It ensures the smooth functioning of day-to day activities of the store. It starts with the management of raw materials delivered from the suppliers in the morning. Then comes the important part of managing personnel, on which the total performance of the store depends on. The workforce has to be organised into proper sector after assessing their performance during the training period. It is the manager’s duty to spot the talent in an individual during the training period and automatically assign him to the relevant sector (Lewis, 2003).

The speed of working is crucial as well as the store has to be ready by the lunch time with the products duly placed in the display area. It is comparatively a tough task and needs to be done in a balanced way, so that the quality does not get compromised. The kitchen staff has to work steadily to ensure quick service. The third part is selling the products, which involves interaction with the customers. The order taking has to be swift and also the person taking the orders has to be polite and professional. The feedback of consumers has to be noted down as it plays an important role in maintaining the quality standards (Leseure, 2000). The daily sales report is assessed by the manager and it is uploaded on the central server. The head office looks into the reports from all the offices. The left over stuff is then collected by charity organisations and is used to feed hungry people.

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2.1 ASSESS HOW IMPORTANT ECONOMY, EFFICIENCY AND EFFECTIVENESS IS TO PRÊT A MANAGER.

One thing which binds all types of businesses together is the desire for profit. PRÊT A MANGER is no exception to this desire. Their policy regarding, donating the leftovers, and maintenance of freshness has impacted the financial situation of the company. Such policies made the company concentrate on cost cutting since it became very pivotal. It is achieved by training the staff to be competent at more than one task. Thus with a limited number of employees they manage large stores, hence reducing the costs (Leseure, 2000).

2.2 THROUGH USING A PESTEL ANALYSIS, ASSESS THE IMPACT OF THE TENSION BETWEEN COST MINIMISATION AND QUALITY MAXIMISATION THAT PRÊT A MANAGER COULD EXPERIENCE.

Pestle Analysis looks into many factors affecting the organisation. It includes Political factors, Legal factors, economic factors, Technological factors, social factors and environmental factors. As per the environment factor is concerned, PRÊT A MANGER ranks amongst the most environmentally conscious organisation in the world. They stick to their policy of avoiding preservatives and thus have been accepted with open arms anywhere they have wanted to open their store. This policy is in sync with the rise in health consciousness around the world, and this makes the company socially acceptable and economically profitable. They use latest technologies to reduce the overhead in their stores and to achieve best possible utilisation from their human resources.

Thus, we can say that it passes the Pestle Analysis easily. However, due to the rise of cost of raw materials, and their policy of freshness the company has to bear huge costs. To be able to do so regularly involves high cost of production which decreases the profits. The policy of cutting down on the number of employees can make their stores understaffed. Hence it is inevitable that the company will have to increase the prices to maintain profits (Stevenson, 2005).

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2.3 EVALUATE THE SIGNIFICANCE OF COST, DEPENDABILITY, FLEXIBILITY, QUALITY AND SPEED (FIVE OM PERFORMANCE OBJECTIVES) THAT UNDERPIN OPERATIONS MANAGEMENT IN PRÊT A MANAGER.

Cost of production is a big factor for any food chain and PRÊT A MANGER is no different. To maintain quality as well as making profit, the company has to limit its cost of production. As mentioned earlier PRÊT A MANGER depends upon its employees, and the training imparted to them for cutting the production costs. Good performance by the staffs helps the company to generate goodwill in the market. Thus by sticking to its virtues the company tries to reach the zenith of customer satisfaction and build its reputation (Winsor, Sheth and Manolis, 2004).

Answer Task 2:-

3.1 CHOOSE ANY COMPANIES PRODUCTION LINE AND ASSESS HOW THEY USE LINER PROGRAMMING TO ADD VALUE TO THE PRODUCTION PROCESS.

Linear Programming is an optimisation technique used to produce improvements in performance of the company (Bazaraa, Jarvis and Sherali, 2010). It helps business to reduce costs, increase profits, use all resources to the optimum, minimise risk and thus improve in a wholesome way. The product based companies like SONY uses CPLEX or C-Simplex for linear programming. Simplex method is a tool developed to solve linear programming problems. C-Simplex uses C language as optimiser. In linear programming problems, there exists a linear relation between the constraint and the objective functions. Real life problems can be designed in this way to achieve results. A basic linear programming problem has following components:

a.) Objective function which deals with the effect of decision variables on cost.

b.) Decision variables: Decides the quantity to be determined

c.) Data which deals with the relation between objective functions and the constraint

d.) Constraints laydown the guidelines for usage of resources by decision variables

The linear programming concept not just optimises the processes but also allows managers to focus on real problems without wasting their time on daily problems (Render, Stair and Michael, 2006).

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3.2 EVALUATE THE CRITICAL PATH ANALYSIS AND NETWORK PLANNING OF A PRODUCTION LINE IN YOUR CHOSEN COMPANY THROUGH USING FLOWS CHARTS AND DIAGRAMS.

Critical Path is an analytical tool which is used in project scheduling (Taha, 2008). To build a model of CPM we need to follow:

a.) List of activities- breakdown of works to be done

b.) Time duration for each activity

c.) Dependencies

d.) Logical ends or milestones

CPM uses these values to calculate the longest route of activities that have been planned leading to end of the project.

Sony uses critical path analysis for monitoring the manufacturing process of their products.

An example of the critical path analysis is shown below:

The time paths are as following:

1. 1 – 2 – 4 – 7 – 8 – 9 total time required 18 week

2. 1 – 2 – 3 – 4 – 7 – 8 – 9 total time required 23 week

3. 1 – 2 – 3 – 5 – 7 – 8 – 9 total time required 22 week

4. 1 – 2 – 3 – 6 – 7 – 8 – 9 total time required 23 week

Hence, the critical path should be the 1 – 2 – 3 – 4 – 7 – 8 – 9 and 1 – 2 – 3 – 6 – 7 – 8 – 9 for the manufacturing unit and the time taken is 23 weeks.

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3.3 WITH REFERENCE TO YOUR CHOSEN COMPANIES’ PRODUCTION LINE, JUSTIFY THE NEED FOR OPERATIONAL PLANNING AND CONTROL WITH REFERENCE TO CAPACITY PLANNING, INVENTORY PLANNING, PROJECT MANAGEMENT AND QUALITY ASSURANCES.

The annual operation budget is designed with the help of operational planning as it plays a major role in deciding and setting the milestones for a company to achieve success. Strategic planning and operational planning are intricately inter-linked with each other and hence influence each other (Kerzner, 2003). The questions which are answered by operational planning include the following:

The benchmark for the products manufactured by the company based on the following issues:

a.) Where does the company want to be

b.) How can they measure their progress

c.) How can they achieve or reach their goals

In order to answer the above questions, we have to take recourse to operational planning. The main aspects of operational planning are as follows:

a.) Objectives

b.) Desired outcomes

c.) Delivered activities

d.) Requirement of resources

e.) Standard of quality

f.) Monitoring the progress

Capacity planning- It is the measure of the production capacity which is required by the company to fulfil the demands of the clients. It is the ratio of the volume of produced output to the time period. It is crucial for an organisation to look into the capacity problem. Capacity planning involves balancing between available and required capacities. It is mainly used to reduce the discrepancy between the required and available capacity (Phillips, 2004). Inventory planning- Inventory refers to storing the products manufactured by a company in proper condition so that the quality of goods delivered to the customer is maintained and not compromised in any manner. To ensure customer satisfaction, the right amount and product needs to be stored in the inventory. Inventory management is an added cost for the company and hence should be as minimal as possible (Lock, 2007).

Quality assurance- A company is known for the type of product it produces and hence it is essential that the standard of quality does not go down in any manner as it has a direct implication on the market value of the product. Quality assurance helps in setting the standards and benchmarks which can be used to test the quality of the manufactured product (Cleland and Gareis, 2006).

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Answer Task 3:-

4.1 PRODUCE A SET OF CLEARLY DEFINED OPERATIONAL OUTCOMES FOR AN OPERATIONAL SALES UNIT WITH REFERENCE MADE TO THE FIVE PERFORMANCE OBJECTIVES.

For business process to run smoothly and efficiently, the performance objectives are set by the operational sales unit of the company. Business operation and sales support are the other names for the operational sales unit (Becker, Kugeler and Rosemann, 2003). An operational sales unit adheres to five objectives, which are as follows:

Salesforce expansion- Based on certain factors, this objective aims to expand a particular company’s sales. The factors which govern this objective are as follows:

a.) Process development- Closing the deal is not the only objective of a successful sales strategy but it also takes into consideration the smooth running of the entire sales process. For a sales process to function properly, it is essential to understand the needs and demands of the customer and design tailor-made solution and products to cater to these needs.

b.) CRM development- CRM development helps in sales force automation, relationship management, providing customer data and opportunity management.

c.) Sales tool development- In the present scenario, different type of business tools are used for all round development of the business.

d.) Training- Training the workforce is an absolute necessity for enhancing the quality of the products being manufactured by the organization.

e.) Communication management- Managing all forms of communication is a prerequisite for proper monitoring and implementation of the goals of the organization.

Business analytics- Sales metrics and sales forecasting are the two parts of business analytics. Sales metric finds its use in analyzing the ups and downs of sales whereas planning of the sales volume on a monthly, quarterly or yearly basis comes under sales forecasting (Becker, Kugeler and Rosemann, 2003).

Sales administration- This performance objective is involved in the planning phase and the management of the supply chain along with successful product distribution depends on this. Proposal of sales, process planning and vendor selection, are the three phases of sales administration.

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Planning attainment- The main purpose of the business along with its goals and objectives are set in this phase. Designing of the sales compensation plan starts after the goals and objectives are set. Territory analysis is conducted in this phase along with the allocation of roles and responsibilities.

Sales operation design- Change management, talent management, designing the operation team, etc. are certain tasks that are performed in this last phase of the operational sales unit (Barnes, 2008).

4.2 PRODUCE A NETWORK PLAN INDICATING THE RESULTANT CRITICAL PATH ANALYSIS FOR YOUR CHOSEN OPERATIONAL SALES UNIT.

Critical path analysis for Turtle garments sales is as follows:

Time paths are following:

1. 1 – 2 – 3 – 6 – 9 – 11 total times required 19 week.

2. 1 – 2 – 4 – 7 – 11 total time required 15 week.

3. 1 – 2 – 4 – 8 – 10 – 11 total times required 17 week.

4. 1 – 2 – 5 – 8 – 10 – 11 total times required 19 week.

Hence, the maximum time required is 19 weeks and the critical path for Turtle is 1 – 2 – 3 – 6 – 9 – 11 and 1 – 2 – 5 – 8 – 10 – 11.

4.3 JUSTIFY HOW QUALITY MANAGEMENT TECHNIQUES ARE APPLIED TO IMPROVE OPERATIONS IN YOUR CHOSEN COMPANY’S.

The main requirements of quality management involve attempts to maintain the quality as well as standard of products and services being offered by a company. Quality management proves to be effective only if the methods adopted during quality management prove effective in terms of customer satisfaction. If, the approach adopted by the company during quality management fails to cater to the needs of the customers, then it is said to be ineffective. Proper management of inventory is essential for quality management because any discrepancy in management of the inventory can hamper proper customer service if the products are not available to the customer as per their requirements and needs (Cleland andIreland, 2006).

The main responsibilities of operation management include the following:

a.) Strategizing

b.) Workflow monitoring

c.) Policy making

d.) Decision making

The company also makes use of the feedbacks received from the customer in order to ensure that the quality of the product is constantly enhanced at every step. Hence, quality management is essential in order to build the brand name of the company among their customers.

References:

Barnes, D. 2008., Operations Management: An International Perspective. London: Thompson Learning.

Bazaraa, M. S., Jarvis, J. J. and Sherali, H. D., 2010., Linear Programming and Network Flows, 4th ed. Hoboken, NJ : John Wiley and Sons, Inc.

Becker, J., Kugeler, M. and Rosemann, M., 2003., Process management : a guide for the design of business processes. Berlin, New York: Springer.

Cleland, D. and Gareis, R., 2006., Global project management handbook : planning, organizing, and controlling international projects. New York: McGraw-Hill.

Cleland, D. and Ireland, L., 2006., Project management : strategic design and implementation. New York: McGraw-Hill.

Hill, T. 2005., Operations Management, 2 nd ed. Basingstoke: Palgrave Macmillan.

Kerzner, H. 2003., Project management: a systems approach to planning, scheduling, and controlling. Hoboken, NJ: Wiley.

Leseure, M. 2000., ‘Manufacturing strategies in the hand tool industry’, International Journal of Production and Operations Management, 20(12): 1475–1489.

Lewis, M. 2003., ‘cause, consequence and control; towards a theoretical and practical model of operational risk’, Journal of Operations Management, 21: 205–224.

Lock, D. 2007., Project management. Aldershot, England Burlington, VT: Gower.

Phillips, J. 2004., PMP project management professional study guide. New York: McGraw- Hill/Osborne.

Render, B., Stair, R. M. and Michael, H., 2006., Quantitative Analysis for Management, 9th ed. Upper Saddle River, NJ: Prentice Hall.

Schmenner, R. and Swink, M., 1998., ‘On theory in operations management’, Journal of Operations Management, 17: 97–113.

Slack, N., Chambers, S. and Johnston, R., 2010., Operations Management, 6 th ed. Harlow: Pearson Education Limited.

Stevenson, W. 2005., “Operations Management”, 8 th edition. New York: Irwin McGraw- Hill.

Taha, H. A. 2008., Operations Research: An Introduction, 9th ed. Upper Saddle, NJ: Prentice Hall.

Winsor, R. D., Sheth, J. N. and Manolis, C., 2004., “Differentiating goods and services retailing using form and possession utilities,” Journal of Business Research, 57 (3), 249-255.

June 22, 2016