Logistics A case of John Lewis

Question: Describe about the Reason for success, Challenges faced and Pre-requisite necessities for the operation of lean systems of John Lewis? Answer: Executive Summary The particular chapter deals with the operation management system of the John Lewis. An organisation needs to establish a relationship of trust and confidence that it can understand the requirements and cater its best possible way that is to implement SANDAC within the JLP. The particular research is conducted in the reference to JLP operation management and its process in making the organisation successful. Initially, JLP uses the Omni form of operation management where the company has faces tough to survives in the rising demand of the consumers. Apart from that, with the help of SANDAC, company will be able manage and control the operation system by tote bin via conveyor. Most of the companies are facing issues like efficiency, ergonomics and service level can be improved in future if the company uses the automated system for the business. Introduction John Lewis partnership is one of the UK largest business houses. It is still lies in the 10th position in retail sector. Company is known for its quality clothing line and value pricing strategies in the market. Company has more than 28 departmental stores and turnover worth of the 7.4 billion (Fliedner, 2012). The company has been able to generate high sales even in the time of recessions and has plans to open more than 28 stores in UK. Company has semi automated distribution centre which helps the business to growing the international and level market of UK. With the rise in the distribution of the centre in year to coming shows that, company logistics is very much automated and company has been able to generate high investment within the business. The study will analyse the existing technology of logistics of the distribution network (Jackson and Jones, 2005). Reason for success for the John Lewis partnership John Lewis partnership is been one of the major pillar for the success of the company. The stakeholder like employees and the mangers and customer has made the company to reach in current positions. The john Lewis partnership is been growing strong every year as the company is able to capture the large customer base within the existing UK market (Shinkle et al. 2004). With the strong relationship with employees is one of the major reasons for its success in the past and present. John Lewis is been owner one of the major stakeholders who are looking to manage and control improvise its logistics and distribution network which has created the large customer base for the company (Trent, 2008). With the variety in the product availability gives a company edge to grow more in compare to its competitors like Zara and HM. Apart from the above the critical success factor for the company is being its marketing strategy tool. The company has implemented the penetration pricings strategy to targ et the medium and large customer group in the current market share (Krugman et al. 2010). Market share 2011 2012 Marks Spencer 11.7% 11% Primark 8.5% 8.1% Asda 6.9% 6.9% Top shop 6% 5.51% John Lewis 5.54% 6% TK maxx 3.2% 3.3% HM 3.4% 2.9% Matalan 2.9% 2.5% Graph 1: Market share of the John Lewis (Source: Bryman and Bell, 2012, pp-123) From the above, it has been found that, market share of the John Lewis is been very much pleasing and growing as per the above graph. The company is able to outperform its contemporaries like HM and TOP shop and Matalan because of its quality and value pricing (Baum, 2003). As the companies like primary is second because of low cost and company has not been able to generate the large customer base which will give poor sales in result in the long run. Therefore one of the major competitors for the company is MS which is very much has large brand value and are remote distribution channel for the company (Bhadur, 2008). However, MS uses price skimming strategies which are why most of the customer are shifting their base and only catering those customer whose earnings is more than 10,000. Alternative considered to maintain the increasing demand of consumer Since the John Lewis demand of the products services is increasing every year. The growth needed to be complimented by the better supply chain would helps to manage the products and service availability (Bisen and Srivastava, 2009). Company is been looking to implement SANDAC which is semi automated supply chain that will help the company to manage and control over the supply chain in order to make sure that items must be picked within time which would reduce the backup store facilities. The warehouse designed to be very much environmental friendly which comprise of solar panel and storm water collection and automated lightening (Chopra and Meindl, 2007). Most of the goods are being packed in the cartons on pallets. With the help of tote bins, company transport its minload to automated storage and with the help of OSR , company is able monitor is products and services within the 10 kilometer range. The storage area comprises 26*1.75 m which is operated with the help of wire guided narrow aisle trucks (Held, 2003). The narrow aisle makes sure that the AS/RS is used to store the tote bins of fast and slow moving lines. There are 13 capable of moving 2 bins at same time. The AS/RS and OSR technology covers the area which helps the John Lewis to manage the store of total 240,000 tote bins. While picking up the order the tote bins conveyor uses bin to bin to picking because there are more than 33 picking stations within the area (Singh, 2009). Each of the picking up stations comprise of the 12 tote bins on a lower level. Finally the picked up bins are being transported by the conveyor to the OSR based buffer store. Since the company has wide variety of products range with more than 350,000 product lines which are ranging from fashion to apparels along with household goods which company has more than 33 picking up stations (Dennis, 2002). Apart from that, company has invested more than 46 million in order to implement SANDC within its existing supply chain. This has enables to reduce the cost of the docks and the warehouses. The business case of John Lewis shows that, company has successfully able to manage and control over its pickings that has made the company to reduce the excess burden of time consuming and has lower the manpower (Liker, 2004). The SANDC is generally operated between two shifts each day but it has potential for the 3 shift each which will helpful for the business to grow and manage its rising demand. Challenges faced by the John Lewis within their supply chain One of the major challenges faced by the company during its time of managing and controlling the supply chain system its growth. Since the mode of operation from the Hawthorne experiment to bricks and mortar which has been changed since the yester years (Bicheno, 2004). The omni form of operational system within the supply chain has been one of the most popular ways of managing the supply chain. The omni channel system has helps the major retailers for fundamentally redesigning its supply chain. This leads the industry has undergone changes due to growth in the supply chain (Nicholas and Soni, 2006). Since the click and collect the service has been able to manage the supply chain management system within the organizations. The retailer here is able to fulfill the expectation of the customer demand by make sure the supply chain is managed in better way and the 124*7 availability of the products. After the globalization and technology advancement like internet has made the world more G local (Hines, 1994). Therefore, the online retailing has become of the most prominent way to trade the business for the retailers without having the physical store. Since, demand of the online store has been increased from 2009 as the internet user of the nation are also been increased by 43.09% across UK (Hines, 1998). The evolution of e-commerce has made the john Lewis to launch its own online websites which will hale the business to grow and made available to each and every corner of the world. Some of the challenges faced by the omni supply chain are given below: Figure 1: Omni supply chain (Source: ttner, 2005, pp-121) One of the biggest challenges and opportunities faced by the retailer is close the technology gap for the consumers. When more than 50% of retailers does not poses critical supply chain technology in order to fulfill the order for the company (Karlsson and hlstrm,1996). (i)Lack of integration with inventory with the omni channel system: Fulfilling the order for the customers is one of the major job of the operation system. Omni channel system helps the customers to fulfill the orders based on where the customer is located. If the shipment is local then the company will be able to ship the order whereas orders is out of the stations makes the company to make the shipment which take sits twice its time (Andersson, 2006). However, most of the retailer is facing challenges sending of wrongful items which are creating huge lots of problems. Company is not been able to manage and control its inventory system because of omni system is more complicated. It requires large number of inventory and people from a lot of different places in order to send its right products right people. This makes the distribution system more risky and increase in human error (Nicholas and Soni, 2006). Omni supply chain software is communicating e-commerce sales across the globe which helps the company to achieve the large market base. (ii)Integration Issues within the Omni channel of distribution: Although omni channel breaks traditional operational model for the shopping but the consumer are never ever been interested in the supply chain process of the company instead they are interested in customized solution. Integration of the channel implies more visibility into the inventory across the entire enterprise which is not enough by the existing omni technology (Conti et al. 2006). The lack of integration between the server and the inventory to the demand of the consumer can create technological hindrance within the omni retailing. The JLP has faces various kinds of the issues because of the growing customers need, company have failed to send the right products to the right consumer at the right place (Dennis, 2002). However, lack of integration between the distribution channels has made the JLP to manage improper way of operating its business. SANDAC flexibility as per the changing demand With the implementation of SANDAC within the JLP has made company to increase its efficiency within the existing operation system. For instance, a new products of JLP are being weighed , scanned as per the cubic measurement and photographed during the time of managing the operation (Couper et al. 2011). With the help of OSR (Order storage and Retrieval) system are helpful in strong the transported goods from the conveyor. Apart from that goods which are being received by the store in tote bins which is in the current quantities are being pre-advised electronically by the suppliers using the advance shipping notifications (ASN). The pallets will be which be received have the tote bins and are moved by the PPT (Powered applet truck which will de-palletized by the robots (Doukidis and Paul, 1990). This total process of the SANDAC is very much shows the flexibility of the demand of supply chain system which is consistently being working with OSR that helps the JPL to grow more and cater the changing demand of the consumers (Gunasekaran, 1999). SANDAC has works in more than two major shifts which would be helps the JLP to manage its operation system around the UK. Apart from that, SANDAC is capable for more than tow shift which shows its flexibility among the other type of system like omni and the price2 methodology Harris and Harris, 2003). Most of the companies like Zara, MS and HM are using the omni version of the supply chain within their business. Moreover, SANDAC is also been very flexible for the order picking. For instance , JLP has more than 33 pickings out of which each stations comprises of 12 tote bins on lower level which would helps the conveyor to represent the store that needed to be picked (Conti et al. 2006). Besides that, on the higher level of demand, tote bins are brought into two locations in front of the picker. With the help of this flexibility company has options top order high level at same time as lower level of quantity of the products and services. One of the major examples for the flexibility within SANDAC shows that integration between the warehouses takes the products from the 1000 suppliers from small stores. Automated conveyor belts carry hundreds and thousands of the torte boxes from the selves to the workers that will take the times to shoppers (Dennis, 2002). Within the range of more than 10 kilometers of conveyor belts in the area of ware house where the aisle are 75 meter long and 15 meter high and help taken by the cranes that locate and pick up the totes who travels at six meter long in one second shows that automated storage system of the JLP is very much healthy and flexible as per changing demand of the consumers (Liker, 2004). Ways to improve the service of SANDC 1. Effecincey: The existing automated system will increase the efficiency process of the operation system of the JLP as the rise in the demand of the products will be higher in the coming years. The efficiency level of the SANDC is higher in compare to its competitors who are not able to cope with changing demand of the consumers (Hansson, 2006). SANDAC will help the JLP to meet the standards of the customers. The aromatic system will give an competitive advantages and critical success factors for achieving the product availability with less and with the cost effective. With helps of integration process of the automated tote bin has given edge to the company to gain the large customer base via clean and clear operation management (Apte et al. 2011). 2. Service Levels: The automatic system of the SANDC will help to solve the problems of customised operating system as per the company demand. SANDAC service level is more of the technological advancement which helps the JLP to minimize its cost and give the service at right time to the right stores (Apte et al. 2011).. This will also bring the transparency within the service system of the company which will lead to changing demand of the stores which is one of the major critical success factors for the company. This is only can be possible if the system is very much integrated for managing the automatic pilling of the inventory. SANDAC has bridge the gap between supply and demand for the product (McQuaid-Cook and Simons, 1989). 3. Ergonomic Issues: Various ergonomic issues at work place can be arises due to the repetition of the work, manual handlings and designing of the job which may lead to the uncomfortable situation at the workplace. Ergonomics is process of the improving the productivity of the company core business objectives which would lead the company to achieve the higher efficiency (Mustaghis-ur-Rahman, 2007). Ergonomics of the SANDAC will helps the company to reduce the cost. The best ergonomic solution given by the SANDAC represent improve the productivity by designing a job to allow for the right kind of posture , less exertion and fewer motions and which made the work station more efficient. SANDAC improves the best efforts in order to ensure the quality of the products. For instance, JLP labour is able to fasten their work of equipment tightening enough due to high force requirements of the products fixtures (Apsc.gov.au. 2013). Ergonomic helps the business to maintain their best efforts to ensure their health and safety via making the working environment for comfort and reduce the fatigue. 4. Sustainability: Sustainability issues are always with operation system for the company. With the automation cost and paper has been saved by the JLP but the use of electricity has been risen. The machine like SANDAC must be work within the environmental friendly manner in order make the work place more sustainable. In coming future, the more and more of customer are willing to associate themselves with the environmental friendly company, therefore, it is very much important for the company to manage their operation by reducing the waste and control the pollution within the manufacturing to supply chain. The use of the green technology and renewable products helps the company to take larger control over the changing environmental laws (Hamman, 2012). JLP has been using the solar panels which help the organization to manage the sustainability by reducing the use of thermal power energy to solar energy. Apart from that, storm water collection is another major warehouse designed which would indicate that company is more of the environment friendly. With the help of automated lighting control system has been helping the 15% of the energy conservations within its warehouse (John Lewis, 2015). Pre-requisite necessities or the operation of lean systems The rising pressure on the organisation to reduce cost and improve quality is making many companies to choose Lean tools and techniques as an advance solution for improvement in the performance of the company (Mustaghis-ur-Rahman, 2007). Over the last few years, Lean has been emerged as one of the most impactful procedure to increase the organisations efficiency by decreasing the operations. Figure 2: Pre-requisite tool for the lean management (Source: Apte et al. 2011, pp-143) Sorting (Seri): As discussed by (Trent, 2008), with the proper arrangement all work area must be sorted. It will help the company to understand the needed works are unnecessary work, which should immediately be discarded. Straighten (Seition): Straighten is to set in order the products and services according to location area of each of the items. With the labels every item will be place in order of usage or unused. All the worker must know where the item are by labelling or by making shadow board that has outline of tools so as to identify its accurate location area (Conti et al. 2006). Shine (Seiso): The work area must be kept physically clean and tidy on a regular basis and the workers should also be scanning the area for anything that is out of place and try to make immediate effort to correct it. Standardize (Seiketsu): Standards must be made or rather develop for the making first 3s so as to ensure that the workers are doing what the company wants/requirements of them (Apte et al. 2011). Sustain (shitsuke): It means maintain uniformity in the practice. All of the steps must be maintained and done in a same way. The routine must be made in a discipline way so that the entire step and process of 5s become a habit for the workers and the organisations (Mustaghis-ur-Rahman, 2007). Conclusion With help of SANDAC, transparency system thinking within the company can measure efficiency. Furthermore, company will be able to measure the efficiency by reducing the cycle time of every operation, simplifying every work by repeatedly making everyone to do the same work and benchmarking will help to measure the JLP of operation management. However, application of SANDAC software system, JLP will be able to manage to achieve goals and objectives of the company via better operating system. As observed form the study of the particular chapter, the researcher was not able to gather knowledge regarding the changing the priority of the company which helps in customised the operation system. Reference List Books Fliedner, G. (2012). Leading and managing the lean management process. [New York, N.Y.] (222 East 46th Street, New York, NY 10017): Business Expert Press. Jackson, T. L. and Jones, K. R. (2005). Implementing a lean management system. Portland, Or.: Productivity Press. Shinkle, G. A., Gooding, L. H. and Smith, M. L. (2004). Transforming strategy into success. New York: Productivity Press. Trent, R. J. (2008). End-to-end lean management. Ft. Lauderdale, FL: J. Ross Pub. Krugman, P., Wells, R., Graddy, K. (2010). Essentials of Economics. New York: Worth Publishers. Bernard, H. R. (2011) Research Methods in Anthropology: Qualitative and Quantitative Approaches. 5th ed. Plymouth: Alta Mira Press. Bryman, A. and Bell, E. (2012) Business Research Methodology. 3rd ed. New York: Oxford University Press. Baum, A. (2003). Real estate: investment or operation?. Property Management, 21(1). Bhadur, R. (2008). Production and operation management. Jaipur, India: Book Enclave. Bisen, V. and Srivastava, S. (2009). Production operation management. Lucknow, India: Word-Press. Chopra, S. and Meindl, P. (2007). Supply chain management. Upper Saddle River, N.J.: Pearson Prentice Hall. Held, G. (2003). Ethernet networks. London: Wiley. Singh, M. (2009). Operation management. New Delhi: Sonali Publications. Dennis, P. (2002) Lean Production Simplified: A Plain-Language Guide to the Worlds Most Powerful Production System, New York: Productivity Press. Liker, J.K. (2004) The Toyota Way: 14 Management Principles from the Worlds Greatest Manufacturer, New York: McGraw-Hill. Bicheno, J. (2004) The New Lean Toolbox: Towards Fast, Flexible Flow, Buckingham: PICSIE Books. Nicholas, J. and Soni, A. (2006) The Portal To Lean Production: Principles and Practices for Doing More with Less, Boca Raton: Taylor Francis Group. Journals Hines, P. (1994). Creating World Class Suppliers: Unlocking Mutual Competitive Advantage. Upper Saddle River, NJ: Financial Times Management Series. Hines, P. (1998). Benchmarking Toyota's supply chain: Japan vs U.K. Long Range Planning, 911-918. ttner, U. (2005). Supply chain risk management: Understanding the Business Requirements from a Practitioner Perspective. The International Journal of Logistics Management, 120 - 141. Karlsson, C., hlstrm, P. (1996). Assessing changes towards lean production. International Journal of Operations Production Management, 24 - 41. Andersson, E. (2006) Lean Produktion p Lindab Steel: Stndiga frbttringar ven nr det gr bra, Underleverantren, No 6, pp 29. Nicholas, J. and Soni, A. (2006) The Portal To Lean Production: Principles and Practices for Doing More with Less, Boca Raton: Taylor Francis Group. Lean Enterprise Institute Sweden. (1999) Verktyg fr Lean Produktion, Quest Worldwide Education Ltd. Gteborg. Conti, R. Angelis, J. Cooper, C. Fagegher, B. and Gill.C (2006) The effects of lean production on worker job stress, International Journal of Operations Production Management. Vol. 26 No. 9, pp. 1013-1038. Dennis, P. (2002) Lean Production Simplified: A Plain-Language Guide to the Worlds Most Powerful Production System, New York: Productivity Press. Couper, M., Kennedy, C., Conrad, F., Tourangeau, R. (2011). Designing Input Fields for Non-Narrative Open-Ended Responses in Web Surveys. Journal of Official Statistics, 65-85. Doukidis, G., Paul, R. (1990). A Survey of the Application of Artificial Intelligence Techniques within the OR Society. The Journal of the Operational Research, 363-375. Gunasekaran, A. (1999). Agile manufacturing: A framework for research and development. International Journal of Production Economics, 87-105. Harris, R., Harris, C. (2003). Making Materials Flow: A Lean Material-handling Guide for Operations, Production-control, and Engineering Professionals. Cambridge, MA: Lean Enterprise Institute. Conti, R. Angelis, J. Cooper, C. Fagegher, B. and Gill.C (2006) The effects of lean production on worker job stress, International Journal of Operations Production Management. Vol. 26 No. 9, pp. 1013-1038. Hansson, M. (2006) Frbttringsarbete p Haldex Hydraulic AB i Skne Fagerhult, Stndiga Frbttringar, No 1, pp 3-5. Apte, U., Ahn, S. and Guignard-Spielberg, M. (2011). Optimization of Bank Check Sorting and Clearing Operation. Technology Operation Management, 2(1), pp.16-28. McQuaid-Cook, J. and Simons, C. (1989). Development and Operation of a Waste Management System in Alberta, Canada. Waste Management Research, 7(1), pp.219-227. Mustaghis-ur-Rahman, (2007). NGO Management and Operation: A South Asian Perspective. Journal of Health Management, 9(2), pp.223-236. Websites Apsc.gov.au. (2013). Australian Public Service Commission - Developing High Performance: Performance Management in the Australian Public Service. Available at: https://www.apsc.gov.au/aps-reform/current-projects/performance-framework/conceptual-performance-framework [Accessed: 1 Feb 2015]. Hamman, M. (2012). Sense-and-Respond: A Broad Organizational Capability. Available at: https://www.bigvisible.com/2013/06/sense-and-respond-agility-organizational-capability/ [Accessed: 5 Feb 2015].