I graduated in July with a degree in Mechanical Engineering. Many of my courses and research activities in the final year were in the field of Industrial Engineering and Operations Research with a strong focus on production and operations management.
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The problem is identified with the demonstration of the functional relationships and process flow analysis. With the use of concepts of operations and process management, the problem is analyzed and methods sought to provide recommendations and an implementation plan.
With 17 outlets spread throughout the length and breadth of the country, Hi-Lo Food Stores employs over employees. Payment methods include cash, credit cards and debit cards.
In an effort to continue to provide better options for settling of payments to merchants and customers alike, the company Infolink was formed.
Infolink is a joint venture company owned by the four commercial banks of Trinidad and Tobago whose focus is to provide state of the art financial transaction-switching technology by way of debit card payment. In recent times, it has been observed that on peak commercial periods, Hi-Lo Food Stores terminals have not been able to process debit card payments.
The customer is either forced to use a credit card or use cash. The nature of the business of Hi-Lo Food Stores would in some instances cause for a large sum of money at the check-out terminal. Customers, who do not have a credit card facility available, are then forced to leave their merchandise at the store and locate an Automated Banking Machine ABM to withdraw cash and then return to the store to complete the transaction.
Hi-Lo Food Stores is then faced with the issue of storing in a secure manner those items selected and already bagged for the prospective customer and can only be delivered until payment is tendered. This then causes a storage issue since these items are usually placed at the terminal the customer was accommodated Strategic operations issues essay.
Sub-issues of pilfering and bottlenecking of check-out counters have also been evident.
The second issue arises when the customer does not return for reasons such as, no ABM facility within range of Hi-Lo, and then causes the customer to leave to a more convenient supermarket. This leaves Hi-Lo with spoilage and re-stocking of the items already held at the terminals.
Customer dissatisfaction sets in and an erosion of brand loyalty occurs. The impact on Hi-Lo Food Stores can then be summarized to include increased check-out times at terminals, customer dissatisfaction and decreased sales.
While the LINX system proved seamless during its pilot project phase of operations, in recent times as the service became more widely accepted by the general public, LINX seemed to be unable to manage the demand of merchants. As the writer has evidenced at Hi-Lo Food Stores, the debit card payment system seemed unable to handle the workload during peak periods of demand.
The process design of the debit card system in its conception can be seen to provide great advantages to the mass service process type. This payment method can be seen as an internally supportive method of increasing operations capabilities. This could have been caused by the customer having to present a personal cheque for payment along with a cheque guarantee card, if applicable.
The second step would be for the cashier to examine both card and cheque for validity. In instances where the cheque was written in excess of the card guarantee amount, a supervisor would then be referred to for authorization.
A process that would guarantee a longer turnaround time than the now widely used LINX service, debit card payment option. In analysis of the process however, we must measure the impact of the unreliability of the service and how it causes delays and decreased outputs.
These delays then impact on the cycle time at checkout counters. In carrying out a process analysis, it is obvious that the LINX operating system has a process capacity which has not yet been determined. As can be seen the debit card payment system when effective can have a positive strategic impact on operations performance objectives.
By firstly, impacting on the speed by which customers is processed at check-out terminals.
When you have a quick turnover time you reduce the traffic and congestion in the supermarket which can result in breakage and accidents.
Secondly, the LINX system has impacted on flexibility by allowing the customer the option of choosing a more direct form of payment as opposed to credit cards. Dependability can be seen as a performance objective where the system can be relied upon.
The above performance objectives, speed, flexibility and dependability have been negatively impacted on as the debit card system has become unreliable during peak operating times as such the issues Hi-Lo has experienced relates to its inefficiency of its customer experience, its quality of service is risked, thus losing the trust and loyalty of some customers.
This ABM facility will give the customer the ability to exact cash to the check-out terminal without leaving the premises. The ABM facility will have the effect of speeding up turnaround time at terminals for payment.
The added advantage of the facility not only being available to check-out customers but the facility will encourage more traffic with customers who may need just the convenience of an ABM facility. The ABM facility will be strategically placed in an area just after the bank of check out tellers, but away from the main entrance point.
This would force the person who came for the convenience of the ABM facility only to line up, surrounded by small convenient items that may encourage purchasing of candy, gum, magazines etc.
In the hopes of a long term resolution, Hi-Lo Food Stores conduct a process design-analysis.The success of any supply chain depends on the framework of the organization.
The framework of an organization identifies strategic challenges that were critical to the organization’s existence in the past and are also critical to its future growth. The analysis of the fabrication procedure and workflow revealed that the root causes were: a) Inadequate communicating linkage between the Planner and Maintenance supervisor which resulted in deficiency of critical spare parts to service major equipment dislocation.
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STRATEGIC OPERATIONS ISSUES Elizabeth Kelly ABSTRACT This paper identifies an operational issue of a national food-chain. The problem is identified with the demonstration of the functional relationships and process flow analysis.