Operation Management in Primark

Primark is the UKs 5th largest total clothing retailer. It was started in 1969 and currently operates 198 stores in 7 different countries in Europe. It is famous for providing value clothing in the retail market. It is also known for always having something new in the store, giving its customers an ever changing retail experience (www.primark.co.uk, 2010; www.sdiindustries.com). Providing its customers with ever changing experience and value for money Primark holds a good number of satisfied customers who come back to the store almost every week.

Primark purchases its products and goods in large quantities directly from diffrent factories. They sell clothing for men,woman and kids; there are also a lot home based luxury items.Their philosohy of business is more inclined towards volume and are operating a lean business.

Primark consists of various departments. I work as a retail assistant in the children’s section of the Westgate store in Oxford. As a retail store the core of its operations rests mainly on the retail assistants at the tills who deal directly with customers. This part of the organization should be managed effectively and efficiency in order to meet both customers expectation and organizational objectives.

Slack et al (2004) define operations management as the process of how organizations produce goods and services and if employed efficiently it can benefit an organisation in the following ways:

– It can decrease the costs of producing goods and services.

– Increase customers satisfaction about the provided services and products .

– Reduce the amount of capital employed.

– It can enhance future innovation.

Greasley (1998) also describes operations management as how organisations produce or deliver the goods and services that provide the reason for their existence.

Operations management problem

As mentioned above of being associated with Primark retail store (Oxford Branch) I realized that there is an operation problem which is affecting the overall performance and productivity of the store. The identified problem is the customer waiting times at the tills. Customers generally buy an average of two to three baskets of clothing at a time and it normally takes an average of 12 minutes to serve these customers, where there are few items being purchased the customer can be out of the shop in under 5 minutes but this is rare. As of my observation there is not sufficient staff at cashiers as well as retail assistants end, in addition the current staff are not adequately trained for trouble shooting as well as also not even allowed/authorised to address the same. Hence and therefore rely on their supervisors to solve any problem that occurs at the till which as a result increases the customers waiting times. Long waiting times can reduce the amount of sales done in a day because most customers may be detered from purchasing anything when they see long ques.

The above prescribed can very well be related to operations management in Primark as a defined process by which customers are served. In relation to the specified problem the process requires to be measured as of how efficiently or inefficiently customers are served in a store. Efficiency or lack of it needs to be observed in the quality of service and related customer waiting time.

OPERATIONS PROCESS

Transformation process

-Taking the basket from the customer

-Scan the items

-Fold the clothes

-put them in the bag

-Take the money

-put the money in drawer and give the change if there is any

Operations management is concerned with managing processes. All organisations produce goods and services by managing these processes to change the state or condition of something to produce outputs (Slack et al, 2004). As what perceived from the definition above we can say that all organizations have operations processes to produce goods and services. In some cases organizations produce only goods or only services in shapes of outputs. In the subject case the process being described is specifically related to the services provided by Primark with an objective to acquire an output in shape of customers satisfaction. Hammer and Champy (1993) define a process as a collection of activities that take one or more kinds of input and create an output of value to a customer. They also define business process reengineering as the redesign of an organisational process to create a drastic improvement in cost, service or speed. 

Every process is described as having inputs, transformation and output. Inputs are the resources required to carry out a particular operation (staff, customers and items purchased). Transformation is the process through which the inputs go through and the length of time it takes e.g. how long the retail assistant takes to process purchases and how long it takes for each customer to be served. Output is the end result; customer satisfaction or dissatisfaction. The following figure maps the operation process under consideration in Primark.

Transformation

-Cashier/Retail Assistants receiving customer purchases and processing them.

Output

-Satisfied customer

-Profits

Input

– Merchandise for customer purchasing.

Fig. 1

The next diagram shows the process involved in the purchases made in a Primark store which will highlight the above mentioned operations problem. The diagram is divided into input, transformations and outputs. This process starts with customers waiting in queue to be served and ends with them leaving the store with their purchases.

WAITING TIME

Transformation

-Taking the basket from the customer

-scan the items

-put the items in the bag

-Take the money or insert the card.

-put the money in the drawer

– close the drawer.

Output

-put the receipt in the bag

-give the bag to the customer

–

Input

-Staff(Cashiers/Retails assistant )

-Customers

-Items

There are certain changes that need to be made to the process described above to improve the quality of service being provided at the Primark tills. These changes need to be well managed to ensure success.

The main change that needs to make to this process is to reduce the length in waiting times. In order to do this, Primark will need to change its training material to give staff comprehensive training on till use. They will have to change some of their software and machinery to make the process of checking out items faster. Finally they will have to make major changes to how queues are formed to the tills so that customers with few items can check out faster.

DISCUSSION OF RELEVANT THEORY

A theory can be defined as a set of statements that give details to explain, describe or clarify a group of facts or phenomena, particularly one that has been frequently tested or is widely accepted and can be used to create predictions about real systems (Free dictionary .com, 2010).

The following are operations management theories: queuing theory, scheduling theory, and total quality management; all these theories that assist in, planning and controlling real systems.

Queuing theory is mathematical modelling of waiting times; this applies to people or things. It seeks to estimate whether available resources will be enough to meet the probable demand over particular time (Business Dictionary .com, 2010) The queuing theory helps to minimize the time people wait in a queue using mathematical analysis.

The queuing system can be characterized by four parameters:

-the distribution of arrival times

-the distribution of process times

-the number of services at each station

-the maximum number of items allowed in the system (Slack et al, pg. 400., 2004)

There are three characteristics that are common to all queuing systems:

Arrival Process – the possibility density distribution that determines the customers arrival in the system

Service Process – the probability density distribution that determines the customer service times in the system.

Number of Servers – the number of servers available to serve customers.

(EventHelix.com, 2010)

The above characteristics can be compared to the queuing system at Primark . The arrival process can be compared to the customer arrival to the store ; the service process can be compared to the length of time it takes the customer being served and the number of servers is number of cashiers /retail assistants available to serve customers.

Types of queuing systems:

• M/M/1: This refers to service with a single server and negative exponential arrivals. It is the most widely used queuing systems. This system is based on Poisson arrivals, Poisson service time, and single server. The Poisson arrivals need to meet the following rules: large number of customers in the system; little customer impact on the systems performance and independent customers. The Poisson service times for customers are negative exponentially distributed. Finally there has to be a single server for the queue.

• M/D/n: In this system the service time can be assumed to be same for all customers. Here the arrival process is Poisson and the service time distribution is deterministic. The system has ‘n’ number of servers. (E.g. a ticket booking counter with n cashiers.)

• G/G/n: The arrival and service time processes in this system are both arbitrary. This system has ‘n’ number of servers and has no known analytical solution.(EventHelix.com, 2010)

Primark’s queuing system can be likened to the M/D/n type of queuing system where there are a number of servers attending to a queue and service times are deterministic. In Primark there normally is a long queue in which customers stand and are served by different cashiers/retail assistant. Here the service times are deterministic because the length of time spent in a queue depends on how many items are being purchased or how many servers are available or how many mistakes are made by the servers in handling of the purchase.

Slack et al (2004) define the Capacity of an operation as the maximum level of value-added activity over a period of time that the process can achieve under normal operating conditions. Brown et al (2005) also define capacity as the potential output of a system that may be produced in a specified time by the size, scale and configuration of the system’s transformation inputs. This shows that the maximum input and an output capability within a certain period of time helps the organization to make vital actions and decisions.

Approximately all operations have some kind of fluctuation in the need for particular goods or services. Generally speaking Primark has a high number of customers from Monday to Friday; this eases up during lunch time and doubles on weekends and public holidays. The number of weekend staff is not enough so most staff who works on weekend are doing overtime. This results in staff working too much and for too long and as a result the quality of service is reduced resulting in unhappy customers. When the queues at the tills become extremely long the managers call for staff from other parts of the store to come and assist those at the till by folding and packaging and this results in poor customer service in those areas showing how flaw in this temporary solution and as indicated above in purview operation management problem.

Scheduling is a theory in operations management is associated with the queuing theory. It has an important function not only in Primark but also in most manufacturing and service industries. This helps organisations to work with minimum resources. Scheduling is defined by Bagchi (1999) as ‘the optimization process by which limited resources are allocated over time among parallel and sequential activities. There are two basic questions that need to be asked when scheduling:

When is each set of given tasks performed

Which resources need to be assigned to perform each of these tasks

In Primark scheduling is important in the queuing process because it will help reduce the waiting times. To determine when each set of given tasks will be performed information needs to be gathered on how many customers are in the store at a particular time and the average number of item sold per customer. This will enable them to narrow down approximately how many sales transactions will be done in a given hour. When this is determined it will make it easy for the appropriate number of staff to be assigned to tills at a particular span of time and help in structuring shift patterns -as to when a shift begins and ends and how a shift is changed ,answering the question which is that if scheduling is efficiently done can it reduce waiting times.

According to Pinedo (2009) the planning scheduling function in a company relies on mathematical techniques and heuristic methods that allocate limited resources to the activities being done. This would indicate that scheduling can be used to avoid queuing problems. The scheduling theory can be applied to organize the schedules of servers. It can also be used to ensure that at busy times there is enough staff to work on tills. Finally it can be used to organize staff shifts efficiently to make them more effective.

Feigenbaum (1986) defines total quality management (TQM) as an effective system for integrating the quality improvement efforts of the various groups in an organisation so as to enable production and service at the most economical levels which allow for customer satisfaction.

TQM is concerned with more than quality alone. It is concerned with the improvement of all aspects of operations performance and particularly how improvement should be managed (Slack et al, pg.719. 2004).

According to Brown et al (2005) TQM embraces the following:

-Continuous improvement

-Top management commitment

-All aspects of business

-Long-term commitment

The concept of total quality management is a strategic subject requiring a clear commitment by senior management ,it is not related to managing staff in specific , but rather is related to developing and improving the quality of goods and services processes in order to meet customer expectation.

Dale and Lascelles (2003) carried out research based on six levels of adoption of TQM, the six levels are:

Uncommitted: Organizations that have not commenced a formal process of TQM.

Drifters: Organizations that have been involved in continuous improvement for up to three years , then after that quality improvement has not become part of the strategic business framework .

Tool-pushers: These organizations have ISO9001 registration.

Improvers: Organisations that have made significant improvements, while engaging in a process of continuous improvement for a period of three to eight years .The focus depends upon key managers who are driving the process of improvement but TQM is not internalized within the organization.

Award -winners: Continuous improvement is seen as total within the organization as all employees are involved in the improvement process.

World -class: Total integration of continuous improvement and business strategy, always pursuing customer satisfaction.

Depending on the levels of TQM adoption identified by Dale and Lascelles we can say that the level of adoption that would apply to Primark is that of Improvers, TQM is not yet internalized within the company, they are trying to improve their business and this can be seen be seen in how Primark fired three Indian firms for employing child labour when the scandal came out in 2008 (BBC news, 2008)

TQM is a continuous improvement processes, it never ends. It enables an organization to improve the quality of products and services in the best way possible to meet customer requirements. The implementation of TQM emphasises team work and continuous development and improvement to make sure that every item is made correctly.

Managers must share information with every one and involve employees in decision-making. Team work is the most important thing that TQM focuses on and it is the foundation of continuous improvement. Moreover employees must be trained with the tools that are needed to improve the organisation’s quality

Impact on Customers/Quality: Slack et al (2004) define quality as consistent conformance to customer’s expectations. There is a lot of competition between retail stores; all of them are trying to offer the best kind of goods and services to meet customer’s satisfaction and demand.

Primark is known for providing customers with value for money and this means there are stores out there with clothing with better quality. If customers do not get quality service from Primark they are bound to move on to other stores that offer value for money with slightly higher quality and prices.. Primark’s staff must be well equipped to provide quality customer service at the front line tills. The pride of Primark is its customers. Staff are trained to do the following: Look, Greet, Listen and Thank you.

Primark’s customer principles: (PRIDE) stand for Positive, React, Interest, Demonstrate, and excel.

– Positive means respond positively to you customers.

– React to customer needs.

– Interested: be interested in your customer’s need and wants.

– Demonstrate the four service essentials.

– Excel: make it your aim to excel at customers service.

According to Angelina (Training facilitator) Primark uses ‘mystery shoppers’ to check up their level of quality and services. There is also a Zero Tolerance approach to stock dropped on the floor, but most of the time there are a lot of stocks dropped on the floor, because there is not number of staff to take care of the mentioned aspect . Sometimes, there is only one employee in the department, and who alone cannot do many things at the same time, as returns, recovery, tidiness and serve customers on till. This causes queues to grow longer because few people are doing everything and this affects the quality of service customers are receiving since most customers come into contact with staff for the first time at tills.

One approach that some companies use to compare their operation with those of other companies or other parts of its own company is called benchmarking. Benchmarking is a process of continuously identifying, comparing, deploying and reviewing the best practices worldwide in order to gain a competitive advantage in a structured and analytical way. Benchmarking is a very useful approach for Primark to follow, by comparing themselves with others they can judge how well they are performing. During an office meeting it was said that Primark benchmarks themselves with companies like Matalan and TK Maxx. Benchmarking is not about the end result, it is not direct comparison but rather an opportunity to learn from competitors and the best in the business. Primark needs to learn from others how best to meet customer’s satisfaction (Anton and Gustin, pg. 3, 2000)

ISO 9000 is an internationally recognized standard of quality that many firms strive for in order to demonstrate that quality standards and processes are in place (Brown et al, pg. 299, 2005). It is not a guaranty for company success but it gives customers the assurance that what they have bought was produced under set of standards. Implementing ISO 9000 is beneficial to Primark because they will gain customers loyalty and their employees will be committed to continuous improvement but in relation to queuing it will not be very relevant as the human aspect of organisations is not addressed.

The Six Sigma is a smart way to manage a business or department. It puts the customers first and uses facts and data to derive better solutions (Pande and Hopp, pg. 2, 2002). The Six Sigma is an approach that emphasizes the fact that, for any organization to be to be successful customer satisfaction should be put first. Primark should put more efforts to improve customer’s satisfaction by better training the staff at the tills and introducing new equipment and not concentrate solely on cost reduction strategies to increase their customer base. While the Six Sigma approach is an excellent way to manage and control processes, but expensive.

RECOMMENDATIONS

The operations management problem discussed above highlights problems with the queuing system in Primark. The following are recommendations on how Primark can improvise queuing process:

• Employing more staff to man the till banks, there are two on the ground floor e.g. Primark (Oxford Branch-West Gate) to which I am associated with. There are two customer serving tills on the ground floor level and tow on the first floor, while only one operates in each floor. The dilemma of managing capacity can be solved by making sure that there are enough members of staff at each till all the time and then bring in reinforcements to help parcel and pack the items during peak times. This however should be a short term solution. In the long term it would be advisable for them to install a wireless queuing system that displays the available counters as well as more tills with people to man them. These counters will prevent retail assistants from having to shout to alert customers that a till is free. They could also introduce self-service system along with its hard-ware like the ones in Tesco’s and Argos to reduce the number of people in the queues.

• There should be supervisor assistant or (key holder) responsible for all the following things: void items, void transactions, and £50 note check, price entry and price enquiries working close to the tills in case any of the retail assistants need help with a transaction. If this cannot be arranged, there should be a way of signalling the supervisor using a bell.

• In Primark there is one long queue but I recommend that two or maybe three different designated queues according to the number of items purchased so that customers with few items join one queue and those with lots of items join another queue, this way those with few items can complete their transactions faster.

• Retail assistants/cashiers should be given intensive training on how to use the till. In Primark till training comprises only of 1 hour at the time joining the job . This is the main reason why supervisors are needed at the tills to help with little problems that could have been easily solved if there was an in-depth training in place for the cashier/ retail assistants. The induction for the new staff is very basic.

There needs to be a well thought of orientation programme as part of training. This training should include till training irrespective of the department a employee is hired to work in. There should be training in the fundamental understanding and knowledge of all standards and procedures used in the workplace. Customer care training is also important as retail assistants deal with customers and need to know how to handle them. Staff at the tills should be able to speak fluent English so that they can understand customers better.

• Cashiers/Retail assistants should be given at least a ten minutes break on each shift. The employee who works 4 hours a day is not allowed to take a break.

• Staff scheduling should be managed effectively and efficiently following the best practices.

• The tills should be regularly maintained to prevent from breaking down in the middle of busy days.

• Employees need to be given a comfortable working environment to work in, for example the air conditioning at the branch. Uncomfortable working environments make staff uncomfortable and this may affect the way they treat customers.

• Customers feedback should be taken on regular basis. People always remember bad experiences and comments negatively . The Primark management team should strive to improve customer service.

CONCLUSION

From the above discussion it has been established that Primark is one of the most successful clothing stores that sells value for money clothing. It has also been shown that one of the operations management problems they face is a queuing at the tills. This problem has been addressed in this assignment and changes to be implemented are recommended. In conclusion Primark needs to solve the queuing problem in order to maintain their customer base by improving service quality and customer focus .Negating the same will result in compromising with the loss of the same.