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Chapter 13

Chapter 13. RETAIL MANAGEMENT: A STRATEGIC APPROACH, 9th Edition. Operations Management: Operational Dimensions. BERMAN EVANS. Chapter Objectives. To describe the operational scope of operations management

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Chapter 13

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  1. Chapter 13 RETAIL MANAGEMENT: A STRATEGIC APPROACH, 9th Edition Operations Management: Operational Dimensions BERMAN EVANS

  2. Chapter Objectives • To describe the operational scope of operations management • To examine several specific aspects of operating a retail business: operations blue-print; store format, size, and space allocation; personnel utilization; store maintenance, energy management, and renovations; inventory management; store security; insurance; credit management; computerization; outsourcing; and crisis management

  3. Operations Management Operations management is the efficient and effective implementation of the policies and tasks that satisfy a retailer’s customers, employees, and management (and stockholders, if it is publicly owned)

  4. Operational Decisions • What operating guidelines are used? • What is the optimal format and size of a store? What is the relationship among shelf space, shelf location, and sales for each item in the store? • How can personnel be matched to customer traffic flows? Would increased staffing improve or reduce productivity? What impact does self-service have on sales?

  5. Operational Decisions_2 • What effect does the use of various building materials have on store maintenance? How can energy costs be better controlled? How often should facilities be renovated? • How can inventory best be managed? • How can the personal safety of shoppers and employees be ensured?

  6. Operational Decisions_3 • What levels of insurance are required? • How can credit transactions be managed most effectively? • How can computer systems improve operating efficiency? • Should any aspects of operations be outsourced? • What kind of crisis management plans should be in place?

  7. Operating A Retail Business • Operations Blueprint • Store Format, Size, and Space Allocation • Personnel Utilization • Store Maintenance, Energy Management, and Renovations • Inventory Management • Store Security • Insurance • Credit Management • Computerization • Outsourcing • Crisis Management

  8. Figure 13.1 An Operations Blueprint

  9. Maximizing Personnel Productivity • Hiring Process • Workload Forecasts • Job Standardization and Cross-Training • Employee Performance Standards • Compensation • Self-Service • Length of Employment

  10. Figure 13.3 A Checklist of Selected Store Maintenance Decisions

  11. Inventory Management Decisions • How can handling of merchandise from different suppliers be coordinated? • How much inventory should be on the sales floor versus in a warehouse or storeroom? • How often should inventory be moved from nonselling to selling areas of a store? • What inventory functions can be done during nonstore hours? • What are the trade-offs between faster supplier delivery and higher shipping costs? • What supplier support is expected in storing merchandise or setting up displays? • What level of in-store merchandise breakage is acceptable? • Which items require customer delivery? When? By whom?

  12. Figure 13.4 Inventory Management at Costco

  13. Store Security • Uniformed security guards • Undercover personnel • Brighter lighting • TV cameras and other devices • Curfews • Limited access to backroom facilities • Frequent bank deposits

  14. Insurance Issues • Rising premiums • Reduced scope of coverage by insurers • Fewer insurers servicing retailers • Greater need for insurance against environmental risks

  15. Credit Management Decisions • What form of payment is acceptable? • Who administers the credit plan? • What are customer eligibility requirements for a check or credit purchase? • What credit terms will be used? • How are late payments or nonpayments to be handled?

  16. CAM Commerce Solutions

  17. Figure 13.5 Effective In-Store Communications

  18. Figure 13.6 Everest Enterprise: Integrated E-Commerce Software

  19. Figure 13.7 The Latest in Checkout Technology

  20. Crisis Management • There should be contingency plans for as many different types of crisis situations as possible • Essential information should be communicated to all affected parties as soon as the crisis occurs • Cooperation – not conflict – among the involved parties is essential • Responses should be as swift as feasible • The chain of command should be clear and decision makers given adequate authority

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