Operations Management Concepts
Operation management is a process, or a system in which created goods, or provided services are managed through actions such as quality control and assurance, aggregate planning, inventory management, scheduling, motivating employees, location, size and design of facilities, forecasting among many others. These concepts are discussed below, in reference to the case study.
Strategic capacity planning for products and services is one key operational management concept that comes out in the case study. Capacity can be defined as what output is needed, how much output is needed to match the demand and when needed. Capacity decisions are essential in determining the ability to meet future demands, how it affects costs, competitiveness, ease of management and long-term saving (Stevenson, 2021, p.194). How capacity is utilized is measured as a percentage of actual output over design capacity. It enables additional variable costs associated with excess capacity (Stevenson, 2021, p.195). Therefore, capacity must be effective to fit its purpose to eliminate excess cost. Determinants of effective capacity include factors relating to supply chain, operational factors, processes, human considerations, products and services and facilities limitations. In order to plan capacity, one must be able to estimate future capacity based on future demand, evaluate the current capacity, the available facilities as well as room for growth. Alternatives to the capacity requirement are identified; together with financial effects so that we are able pursue the best in long run (Stevenson, 2021, p. 190). The capacity requests are then forecasted, to suit both long term and short-term needs. This is done by studying the demand over time and trends in demand in various special periods like sales and seasonal items (Stevenson, 2021, p.190). Then the processing requirements are calculated to know exactly what level of equipment and human resources are needed (Stevenson, 2021, p. 191). In the case of Wegmans Food Markets, the owners have opted for giant 100,000 square foot super store for many of their stores. This size is double or even tripled the size of average supermarkets. The stores employ approximately 500 to 600 people with between 25 to 35 checkout lanes. Wegmans invest in the future of the company by investing in training; each new employee Wegmans invest on average of $7,000 worth of training (Stevenson, 2021, p.35). These capacities are just perfect for the large number of services they provide as well as the large number of customers they serve.
Another important concept that appears in the case study is management of quality and quality control. Quality is its ability to meet and even exceed customer expectations (Stevenson, 2021, p.380). A quality product must have durability, serviceability, perceived quality, reliability, conformance, special features, aesthetics and performance oriented (Stevenson, 2021, p. 380). An instrument called SERVIQUAL, used to obtain feedback to the business on their performance regarding the product, can assess quality services. The determinants of quality include the design, conformity to the design, ease of use as well as service delivery, (Stevenson, 2021, p.385). Quality enhances a good standing for the organization, its ability to command premium rates, greater customer devotion, increased market share and thus higher efficiency and revenues. In the case of Wegmans Food Markets, the management and thus the employees have placed quality and customer satisfaction at the front line. The way quality is implemented is great, as the products both privately labelled, and brands are evaluated regularly in the test kitchen. These are done along with potentially new products. In each department, the departmental supervisors are tasked with confirming quality of the goods and services as well as their maintenance. The employees are obliged to report quality related issues to the respective supervisors. Customers come first and their complaints regarding quality is taken seriously, including being offered a choice of alternative replacement, or a refund. Then such a complaint is evaluated to find the source of the low-quality product or service. The approach this business takes in quality management and assurance is excellent and thorough. This reflects the importance of quality as the consequences of poor quality include costs, low productivity, liability and loss of business (Stevenson, 2021, p.386).
Lead time is another skill that Wegmans uses to increase customer satisfaction. Lead time is the period between placing an order and receiving the order (Stevenson, 2021, p. 510). Wegmans Food Markets Inc uses short lead times to help reduce the time where a certain item could be out of stock. When lead times are longer it can reduce the responsiveness to uncertain customer requirements (Yang & Geunes, 2007). When lead times are long for the grocery store industry it affects customer satisfaction. Wegman’s food orders arrive to a main warehouse where inventory is scanned in and then sent to superstores. During peak seasons like the holidays the warehouse will sometimes send two loads to one supermarket to ensure that they have the necessary amount products for store customers. When Wegmans superstores run out of a product, they can easily put in an order to the warehouse. If the products are in stock at the warehouse, the order is simply sent to the superstores. This method creates short lead times for Wegmans since they can simply put an order in to the warehouse and get it delivered directly from stores rather than ordering from each product manufacturer. Wegmans method for short lead times is imperative for the satisfaction of customers during peak seasons.
Wegman Food Markets also use the concept of quality-based strategies to ensure that their customers receive the best produce. A quality-based strategy is when there is an emphasis on maintaining or enhancing the quality of products or services (Stevenson, 2021, p.54). Wegmans produce comes specifically from local growers, which provide each Wegmans with individual produce. Wegmans uses the farm to market approach for produce. Their produce goes straight to each superstore, which allows food to get into stores rapidly. Wegman’s technique of farm to market is a quality-based strategy. Since their produce goes straight to each superstore instead of first getting shipped to the warehouse, it ensures that customers have the best quality produce possible. Wegmans also ensures that their local growers use containers that are designed to avoid bruising on their fruits and vegetables. If Wegmans local growers were to use regular large bins to put fruits and vegetables, it would cause bruising which is unappealing to customers and is not fit Wegmans quality standards. Although this strategy may seem minuscule, this is imperative to ensure that customers are getting quality produce.
Lastly, Wegmans also uses radio frequency identification. Radio frequency identification (RFID) is a tool that uses radio waves in order to identify objects in supply chains (Stevenson, 2021, p.680). Wegmans has recently implemented the use of RFID tags. RFID tags provide a strategic advantage to the company because it allows workers to be able to scan numerous products at once. RFID technology also allows employees who work in Wegmans warehouse or supermarket to know when item stocks are becoming low. RFID tags uses radio wave technology with integrated circuits and an antenna to project information (Stevenson, 2021, p.680). This technology allows workers to get efficient information on inventory since RFID tags can be read simultaneously and automatically. Another advantage of Wegmans using RFID technology is that it allows workers to obtain extensive information on products such as the location of an item. If a product is picked up and dropped off at another location the RFID system is able to effectively detect the change in location (Zhou et al., 2017, p.100). The new integration of RFID technology at Wegmans is essential for warehouse workers to be able to efficiently move and locate products.
Major Issues Needing Attention/How to Improve Operations
The Wegmans Market has some of the issues within the company because some things have happened. The company is successful in its stance, but a couple of times, its method was questioned. One of the issues was the employee’s safety because there was an incident that happens in 2015. In December 2015, an employee was cleaning up the conveyor belt and machines. When cleaning up the appliances, the employee has sustained a couple of broken bones from the device. “She sustained broken bones in her hand and arm” (Department). The problem from this incident was the proper way to shut the machine off. The company did not provide any resources when turning off the conveyor belt or any appliances. This incident could be preventable if the company taught the employees to do these kinds of tasks. “OSHA has now cited Wegmans for two repeated violations of workplaces safety standards and proposed a total of $140,000 in fines for those violations” (Department). With this note in mind, there was other repeated action that the company. To continue on the part the unsafe place within the corporation, Wegmans Inc. was a previous situation that the company has to face. “Wegmans Food Market could face more than $188,000 in fines for “recurring hazards” at its Brooks Avenue bakery, according to the Buffalo area office of the U.S Department of Labor’s Occupational Safety and Health Administration” (Clausen). Behind the fine, the company did not do the proper format of the employees’ safety protocol. They were situated of three repeated violations, and two of them were in a stringent protocol for the workers’ safety.
Since safety within the market has been one of their primary concern, they would provide for the employee’s protection, especially the present day when it comes to the Coronavirus. “While Wegmans still may want Proforma to someday provide the polo shirts and other apparel worn by store employees, the agreement reached in early April resulted in desperately needed protective masks for the Rochester-based grocer.” (Okobzija). The workers’ safety is their main priority for the virus is spreading throughout the United States. The company was thinking about getting a uniform style for their appearance within the market, but health is the main priority of the company should focus. Since the primary market was in New York, the virus hit the state the hardest. They were in a situation for caring for the workers and the people living near within their vicinity. With the pandemic continuing to linger in the stores, the company made the necessary steps to ensure the people’s safety. “Since the start of the pandemic, we’ve taken extra steps to ensure our facilities and stores remain a safe place to work and shop” (Safety). The company made me of the trials and errors within the company to ensure the people’s health. With that in mind, the company corrected its part and tried to lead into safety. One of the methods was contactless delivery, where the customer doesn’t need to go to the store. This method would promote the health that the company was hindered.
As stated, above Wegmans Food Markets have encountered multiple health and safety incidents that may have been prevented. Realizing this incident and being able to improve their company is something Wegmans Good Markets has been capable of doing based off their consistent ranking on the Fortunes magazine list of the 100 Best Companies to Work For (Stevenson, 2021, p.33). However, although the public perception of the company may be good, there are still ways in which the company can improve their health and safety protocols, through their operations management. There are three aspects in which the company can improve their operations when it comes to better managing their health and safety protocols.
The first way in which the Wegmans can improve their health and safety rules is by establishing a culture that is enforced from the top down. Meaning, from the CEO (Chief Executive Officer) to the operations, the entry level employees, the entirety of the company needs to understand the established safety culture. Safety should be established as the number one priority within the company. The way in which this can be enforced is by establishing the safety risks and minimizing those risks by education (Michaels, 2018). Understanding each risk involving everyone’s position will minimize exposure to any health and safety hazards. Ways the authorities of the company can educate themselves on the hazards of the everyday environment is by hiring occupational clinicians who come and evaluate the workplace and identify the risks to prevent injuries (Hopkins, 2018).
The second way Wegman can improve is by being “over cautious.” This means creating labels and signs that show how to use a machine safely and what not do to (Hopkins, 2018). Being consistent with educating employees about how equipment works will be beneficial when trying to minimize the risk of injury. Creating the work environment educationally safe will require effort and work when adding additional resources that can keep the place clean, and up to date.
The third and final way operations can improve the health and safety within the Wegmans locations is by being connected with the employees. Open discussion with the employees will be one of the best ways of minimizing any potential risks (Hopkins, 2018). Operation managers have the responsibility of meeting with their employees and discussing safety protocols. They need to be understood about what their employees have to say about them. An open dialogue could potentially create a healthy dynamic between the managers and the employees, which can encourage healthy conversations about any health and safety problems. The conversations can also not only be healthy, but everyone involved can come to a solution to any underlying issues.
As mentioned above, Wegmans has several key issues that have caused key issues within the company. The first of these issues is that Wegman’s has many accounts of employee safety. Wegmans must address not just the root causes of safety issues, but also the residual effects on the workplace culture. Because their disregard of the issues the workplace culture could become negative and impact production, the company should do whatever they can to fix the reoccurring issues happening within their company’s culture. Company culture has a strong link to productivity in an organization, in a large part because of how it influences an individual’s mindset and resulting engagement at work (Zenefits, 2020). Wegmans needs a figure head to address concerns by its work force and make them know that their safety is a concern.
Wegmans could benefit from a third part assessment of its practices and procedures. A firm shop should be brought in to investigate incidences, such as the conveyor belt incidents, and make recommendations regarding training and finding other potential problems. Because Wegmans has not done much about this issue already, a third-party assessment would help show the company’s honest effort to change these safety issues. In addition, since OSHA is already involved, Wegmans could choose to take advantage of the OSHA training program that offers comprehensive compliance training for employees and supervisors (Osha, 2021). This would give the company even more ideas and tools to resolve their safety issues for good.
Another adjustment that Wegmans should make is looking internally at its covid protocols. Issuing masks and offering contactless delivery barely scratch the surface. Employees and customers should have access to visible sanitizer stations. There should be an hourly cleaning of high traffic areas with employees designated for these cleanings. The best practice would be daily “deep cleaning” involving industrial grade agents being used on surfaces and the entire stores being sprayed down after hours. The hourly and daily cleanings should be logged to stay OSHA compliant but also visibly documented within the store for the public to see.