The efficient operations are demonstrated by carefully engineered working procedures inside the store. This is close to highly optimized linked operational environment. Here it is to mention that each Laid supermarket doesn’t occupy a big area. The number of employees that operate the market comparatively to other supermarkets is kept significantly low. (SHCOON, 2010) At the same time most of fast turnover researches is delivered in display ready cases that are directly placed into supermarket without having the need to be rearranged manually. The Times 100 Business cases, 2014) Finally with the application of “cross docking’ logistic techniques the company saves transport time, and raising storage costs. (SHCOON, 2010) The high level of quality/price ratio is delivered by exhibiting strictly controlled number of groceries on the shelves. This is how the company has time to concentrate on effective sourcing and implementing strict supplier’s polices. The private labels lower the price by cutting out the middle man while enabling high level of suppliers selectivity and effective control over the quality.
Additionally the supplier is easy exchange able since the labels are owned by Laid. The company may replace the suppliers while keeping the customer loyal to the store chain but not to the producer. Part I – Applying Soft System Methodology to evaluate the issues Laid might face when introducing facilities to enable customers to order online and have them delivered to the door Identifying new possibility when a process is shifting from one model to other is a complex task. One basic difficulty is that the new process organization IS to clear.
SMS is method for analyzing uncertain situations in several steps. (Amassed et al, 2001 An eventual perpetuation of the methodology would contribute for additional process clarification by learning from “different perceptions that might exist in the minds of the different people involved in the situation (Andrews, 2000) On the figure below is introduced the SMS approach in its original form, presented firstly by Peter Auckland and colleagues at the University of Lancaster.
Figure: 2 – Peter Auckland and colleagues SMS approach (Auckland and schools, 1 990) The up part of the figure represents the real word situation while the part below will represent the logical interpretation of relevant systems and their conceptual models. Moving from the theoretical SMS approach to the practical implementation is given on the figure below: Figure: 3 – SMS illustrating the issues Laid might face when implementing online order for groceries.
Part I – Compare and contrast delivery online solutions used by the sector in which Laid operates and recommendation for online shopping The table below shows how some of the online retail grocers have implemented the sales steps together with delivering acceptable or even excellent customer care. Track the driver: Tracking data from couriers improves the first time delivery rate Where’s my customer? : Smartened APS can help couriers locate their client Delivery consolidation: Companies are starting to deliver to a consolidator’s address.
They hold onto parcels and re-deliver them to their client Lock boxes: Storage boxes with pin code entry outside people’s homes Locker delivery: Some companies allow delivery to a locker located at convenient locations, such as railway stations. Customers use a pin code No signature: With GAPS location stamping, a driver can prove they are at your property, and even take a photo of the place they have left your parcel Convenience shops: Increasingly late opening local shops will take delivery of parcels.
Keep customer in loop: Automated text messages and emails can let people know where their delivery is Neighbor delivery: It is refreshingly old-fashioned and can build a sense of community Use work: Many firms will take personal deliveries for staff Table: 1 possible online Delivery solutions. (Branford, 2012) Careful analysis of the online delivery solutions leads to the conclusion that the online sales service and parcel delivery models concentrate on convenience in shopping and time and price savings by the means of using online applications together with or without service courier.
In addition online grocers win over the traditional food retailers with their expanded non-food offerings. This is exemplified on Figure 4. Figure: 4) Convenient Online Retailers Expand Offering and Click and Reserve and Collect Service. (Verdict, 2013) Recommendation Therefore considering the current market specifics that the consumers anyhow accept the click – reserve and collect execution of online orders it is recommendable for Laid to evolve into online retailer gradually.
Particularly “convenience shops” and “use work” business models might be best aligned within Lid’s culture and successful organizational and business operation structure. Some market analysis point that consumers would not soon cease visiting shopping centers. On the way to the spot there are food outlets and entertainment points which are of particular interest in the end of a busy day. However, in order to save time for leisure Verdict Research forecasts that customers would tend to zero in on hassle free shopping (Verdict, 2013) This is where the solution for Laid online sales service arises.
By developing online website and mobile application for online shopping the company may enter the niche comfortably by offering click and collect at the Laid regional Outlets. For that it is necessary that Laid increase the working hours until Imp daily. On that way the company will enter the niche without heavy investments and there would not be a need to cooperate with parcel delivery courier and passing Lid’s core responsibility for excellent customer service to external eerier company.
On one second level future development for Laid online sales service it seems to be reasonable that the company hire staff, train it and execute the delivery alone. This is how the company would be able to gradually establish new specialization and prepare for the time where the physical grocery outlets will disappear. On this way Laid again would not give up an essential part of its core customer care service to external parties and WOOL_SLD be in the best way to protect its reputation. Part I – How Laid should respond to the delivery to the customer conundrum?
What facilities are needed when implementing Laid new online sales system? Technology and convenience win out when it comes to online sales. On the picture below are depicted the main steps of the online orders process. Figure: 5) Involved parties and applications in the online sales offer (Verdict, 201 3) Capering in its press release from 15 Jan 2014 reports that the increase of the sales over mobile applications for 201 3 is 138% and 27% of all online sales are coming from mobile devices such as mobile phones and tablets.
Another important insight from the same study is that this growth in online sales is purported by the click/reserve and collect online sales approach. 25% of the online sales are executed under the condition that after click pay and reserve the consumer pops up physically at the convenient store to collect the merchandise. (Capering, 2014) However implementing online software and delivery information system has its drawbacks. Consumers report diverse problems that Laid might face inevitably. Among them are: Delivering to the door but the consumer is not at home.
This would cost Laid subsequent delivery costs and wasting time. What would happen when perishable goods re taken to the missing consumer several times or in the case of “convenience shop” the customer does not turn up to collect the merchandise? This would lead to spoiled goods but also not satisfied customers. One possible solution is the chance given within the new technologies, such as Blackball, that track customers using mobile application in order to know when the customer is at home or when is approaching the outlet for pick up. Bombard, 201 2) In this way by using technology Laid would be able to keep up to its promise made in the Corporate Social Responsibility to reduce its carbon footprint. Part I Recommendation: In conclusion, considering the company’s close model of decision making philosophy and its geographic spread in the LIKE and it is possible or even recommendable that Laid gradually implements indoor solutions for grocery deliveries ordered online. This is how the company will step on its own bones and preserve the ground for future indoor specialization and would be able to protect its reputation on the best possible way.
Part II As it was mentioned on Figure 3 above, the area considered problematic is the delivery of a satisfying service by using online system to conduct sales at a attesting level. This new sales method “use work” should be conducted by the company itself. The issue arising here consists in the fact that Laid doesn’t have experience to maintain system for online orders and their subsequent processing to the consumers. Another issue consists in the philosophy of the company to be the best discount retailer.
Therefore such a service may damage company’s reputation for being cheap and quality discounter. On the Rich Picture below is introduced the detailed problem area – namely what constitutes satisfying service? Laid doesn’t have the insights what level or Irvine its customers could perceive as satisfactory. It is obvious that Laid needs to benchmark competitors and survey loyal customers. Figure: 6) Rich picture. (Source: Proprietary hand drawn) The Rich Picture gives more insights for the processes embed on this level.
Seemingly simple this step encompasses the electronic procedures of placing an order in the information system with subsequent classifying and redirecting to the goods depot for physical execution. Finally the new system for delivery should ship the order to the consumer. Each step is time consuming and opens the chance for mistakes. Finally the timing in the modern online economy is to be measured according to the system characteristics, the physical abilities of the people involved and the external factors when on the road to the consumer.
The root definition as depicted on the SMS Figure ??? Above, clarifies the conceptual reason for existing of Laid grocery business, namely: A retailer that owns and operates online system that implements quality BIB procurement and ICC regional redistribution services by following competitive rules while exercising control over the products quality from its suppliers in order to enable easy access to vast umber of consumers online and in its outlets at reasonable prices.
CATTLE Analysis on the Root definitions: c: w: o: Figure: 7) CATTLE process with highlights on the right side The figure above is explicit. However it is to mention that this level of detail is still rough. Basically after conducting CATTLE Analysis there are only the main parts from the transformation visible. However new areas for discussions arise such as: How to turn shoppers into online visitors and online customers? Who is going to execute the transformation on a store level? What constitute satisfies customer?
What are exactly the expectations of the online visitors? What would they define as an excellent shopping experience? What are the resisting forces among the stakeholders? (this could be institutions and places and people that are involved in the online service delivery) What are the exact environmental constraints that the Laid must consider in order to reassure the success of the transformation? Conceptual models Later on at stage 4, is illustrated the conceptual model, so called activity model, of Lid’s potential system for online shopping.
Figure: 8) Conceptual model of the system described in the root definition. It is to assume that as a result of the implementation of the new system for online shopping issues are to be found in the: Software system that runs the online orders collection “Convenience shop” service (online from store) and “Use work” department group (online direct from warehouse or store but delivered to the consumer by the online shop) These three possible problem areas may demand sufficient time and hiring new staff.
As it was already discussed above running the new system opens chances for mistakes such as: appropriate system characteristics, physical abilities of the staff. Finally is to be considered how the new sales model “use work” may compete on prices for delivery? Keeping in mind that the retailer in house is going to be extremely time consuming and labor intensive. As it is estimated costs fifths activities are 10% of consumer price. Van deer Alan, 2014) Consider the following comparison of the price when shopping directly in the premises of the grocer, online form store (“convenience shop”) and online direct from warehouse. Table: 2) Cost/profit analysis by Arteriosclerosis (Van deer Alan, 2014) Part Ill Monitoring and Control – measures of performance In order to turn this new opportunity Laid needs to implement new performance measures Of business operation performance and realize a certain level of brand promotion, customer service; revenue and customer satisfactions.
What exactly the food retail store might choose to measure is several or all of the parameters below” Efficacy “E 1” – is the transformation achieved? Efficiency “EH” – compare phase Effectiveness “EH” – Capital investment -Preparing of the purchase The average distance from the warehouse to the customers and between customers -The stop time at customers (loading unloading and handling) – Consist of level of attractiveness of the online website, user friendly applications and value offering. -Promotion of the company’s new expanded sales offer over the online shop?
Benchmark the revenue of the already online present companies and set them as a revenue targets. -are the shareholders satisfied – Return On Capital Employed ROCK -are and how much the customers satisfied with the level of the customer care in the online division? – Cost per hour Vehicle and employees rate of utilization Figure: 3 (van deer Alan, 2014) To summarize Laid online endeavors could be better justified if at the same mime of the launching of its new online shopping model the company works out an online strategy. J. Van deer Alan from Arteriosclerosis. Mom suggests one of the following three marketing strategies: Niche marketing – effective for retailers with dominant market share such as Laid in order to places barriers for new entrants and gain although low but additional market share from customers that are ready to pay premium for the convenience to shop online. Focus on margin rich products – such as the heaviest products that the shoppers prefer to get delivered in their houses. Thus some online food tillers as it was mentioned above expand the product offering with non- food articles.
Another possibility here is the online shop sales service to offer banking services such as mortgages and insurance. Focus on information and communication – such as offering knowledge management database for different type of customers. Here Laid might consider pages on its website for news, food safety, diets, and health. Additionally there should envisioned pages for the shareholders and the stakeholders and analysis of the market or the goods sold in the grocer. Thus the company will increase the website attractiveness, establish sense of responsibility and eventually gain on new customers or at least gain referrals.
Part Ill Applying Balance Scorecard to discuss how the business performance can be measured Balance Scorecards are widely used by managers to track insights in four possible pathways that represent the soundness of their companies, namely: The financial outlook -? which represents the data in forms of ratios to check the financial companies’ position Customer outlook Internal business process outlook Learning and growing outlook Analyzing these four outlooks together cannot be done without looking into Laid financial statements and corporate social responsibility report.
According to those two resources Lid’s growth and vision towards the future are: 1) To continue the expansion in the UK market 2) To provide the highest quality at the lowest possible price 3) To run efficient low impact operations 4) To run the business based on the three core values: consistency, simplicity and responsibility 5) To build our team so that we create more value Financial Outlook measures: To continue the expansion in the UK market In quantity terms Lid’s expansion is set up for 30 new openings each year.
The current improvement in sales ranged in the amount of 40. 6% for the year 2012 and 32. 7% for the 12 months to 15 Septet, 2013. (Best, 2013) Taken precautionary and exponentially and adjusted to the annual increase of new outlets this digit possibly could be set up at 20% annual sales growth for the next 3 years. Strategic Objective Measures Ta urge Sales growth Revenue – 20% annual growth for the next three years.