Operation management is the central function of business units, it includes planning, organizing, and monitoring of production and manufacturing processes of organizations. The major concern of companies is to turn input into a quality output. Management of the organization has to design the process in such a manner that it can support converting resources into efficient goods and services (Niinomi and et.al, 2014). The present report is based on Caffe Nero Ltd which is working on at a small scale in London. The assignment will give an overview of the Caffe Nero Ltd and it will analyze the operation management process of the cited firms. In addition, the study will discuss five performance objectives of the company and the improvement needed for enhancing the performance of the organization. The supply chain and quality process of the Caffe Nero Ltd will be illustrated in this assignment (Ee and Rashad Yazdanifard, 2015).
1. Introduction and overview of Caffe Nero Ltd Assignment
Location and type of business
Caffe Nero Ltd is an independent European style coffee house. It is located in London and working as a medium-sized cafe in the market. It was founded in the year 1990, it sources high-quality green beans and freshly roasts them in order to serve quality products to the consumers (Cabrera and et.al, 2016). The aim of the organization is to serve the best coffee in the UK and gain high profits. It wants to serve its customers well that is why it used advanced technologies in the system so that it can cook good products for the customers. The company is ranked excellent by its consumers on the official website. The cited firm is engaged in the cafe type of business and in this field, it is working tremendous.
Ownership of Business
Key people of Caffe Nero Ltd are Gerry Ford who is chairman and CEO of the business. Helen Jones is the group executive director of the organization. Both these persons have contributed well in establishing the Caffe shop in London well. It was founded in 1997 but in the year 2007 it started earning profit and it has started focus on providing flexibility in order to develop the business soon (Miura, Sakai and Kobayashi, Fujitsu Limited, 2014).
Customers of Caffe Nero Ltd are satisfied and they give rank to the entity excellent. It gives loyalty cards to the customers so that they be associated with the organization for a longer duration. Though it is working in a limited place thus cited firm is having limited customer bases. Company is not having good marketing strategies thus, few people or the local public know about this caffe shop (Li and et.al, 2014).
Consumers of the Caffe Nero Ltd are liking the drinks served by the entity. It has skilled employees who are loyal to the brand. Apart from this, it has the capacity to grow well. The cited firm has sufficient financial resources and the operational cost of the organization is management (Jin, 2015).
Range of services offered
Along with traditional drinks such as cappuccino, latte, Caffe Nero Ltd also sells Frappe latte and Hot chocolate, hot chocolate drinks. In the year 2007 cited firm has introduced hot chocolate drinks in the London market. Apart from this, it offers tea to its customers. The company provides a wide range of services to its consumers. It focuses on keeping customers satisfied so always try to find out the needs of its users and accordingly it offers them quality products. Founders of the cited firm have recently started Nero foundation in order to support coffee-growing communities (Pei-rong and Bureau, 2014).
Caffe Nero Ltd is following the flat structure, it has to limited space for the working. There is limited space of sitting for the consumers. There is a limited number of employees working in the organization though they are skilled and talented. They sat in the organization for a limited period that s why the retention rate of workers is very low. Sometimes due to poor door arrangement and other facilities customers feel congested (Christopher, 2016).
2. Operation management process of Caffe Nero Ltd
Operation management is an important tool that supports converting the input into quality output in order to provide quality services to the customers. Companies want to gain competitive advantage and want to enhance their profitability for that it is necessary to offer quality products and services to the service users (Rushton, Croucher and Baker, 2014). For that, it is essential to look upon the operation management process so that it can satisfy its clients.
Operation management is the process in which management uses various tools and techniques in order to make manufacturing firms smooth and effective production. With the help of this, companies can gain high profits and can gain a competitive advantage. It will support in sustaining in the corporate world for a longer duration (Fernie and Sparks 2014).
The operation management process of Caffe Nero Ltd supports the firm to a great extent. Effectiveness of the process are discussed as below:
Quality is the set standard that supports measuring the level of product and services against the benchmark. According to the ISO 8402-1986, quality can be defined as features and characteristics of any products that have the ability to satisfy their consumer's needs. It is necessary for the organizations to maintain quality and have to provide the goods and services as per the needs. In this way, the company can be able to sustain itself in the corporate market for a longer duration (Stevens and Johnson, 2016).
In the Caffe Nero Ltd managers closely supervise the activities so that employees serve quality drinks to the customers. They guide their workers and train them about temperature, cleaning, etc. So that they prepare hygiene products for the clients. Managers of cited firm purchase raw material from the reliable suppliers those who provide them quality raw material at lower rates (Tseng and Chiu, 2013). To measure the quality cited firm time to time conduct audit so that drawback of the current process can be identified and managers can improve the process in order to satisfy its consumers. Inspection from local authorities supports the cited firm in improving the process and in this way people will be able to satisfy its consumers well.
Management of the company focuses on cleanliness so that no customer complains about the hygiene factor. The organization gives the training to lower staff members so that they can know about standards and can work accordingly (Ross, 2016). In the training program managers of cited firms make them understand new technologies, cleaning schedules etc. That helps in raising standards of the products of the organization to a great extent.
Transformation of Resources
It is another benefit of the operational management process in Caffe Nero Ltd. The input transformation output process is the best way of utilizing the resources well. It is the process follows by Caffe Nero Ltd in which cited firm transform its physical material in as per the needs of users (Daugherty, Ellinger and Myers, 2015). By making changes in the characteristic of material cited firm is trying to produce the quality drinks. If it finds that raw material is not good then the company makes changes in the material to buy it from other suppliers. The company utilizes the information properly in order to serve products to consumers as per the needs.
The operation management process of Caffe Nero Ltd is beneficial and supports the cited firm in minimizing the wastage of the company. Whenever a company produces any products then it looks upon that the factor that all resources are used by the employees effectively. If there is a situation where the wastage of raw material is taking place then in such a condition cited firm to train its staff members in such manner so that it can utilize the resources well and in this way, the reduction will get reduced soon (McCormack and Johnson, 2016). With the help of operation management company is improving the process well, a lean manufacturing process of the company is very effective and supports the Caffe Nero Ltd in accomplishing its goal soon. It involves continuous efforts for eliminating unnecessary activities. Following a lean manufacturing process is helpful and supports increasing satisfaction level of workers and in earning high profit. In this process cited a firm focuses on quality, cost, and delivery (Aung and Chang, 2014). The company always concentrates on improving its quality so that it can attract more consumers towards the brand. Apart from this, cited firms try to reduce the operational cost of the organization and try to deliver quality products on time to the consumers so that they be loyal towards the brand.
The operation management process of Caffe Nero Ltd helps in making an effective plan to expand its business across the world. It supports forecasting the situation and accordingly it plans how much stock is to be ordered and how many staff are required. The company forecast future sales and accordingly plan the activities. So that utilization of resources can be done significantly (Tseng and Chiu, 2013).
The operation management process of Caffe Nero Ltd is beneficial and supports the entity in accomplishing its objective. With the help of this process cited firms make effective control over its business activities. The company adopts the JIT approach that assists in improving the efficiency of the production process. With the help of this approach, the company can reduce costs and can develop good relationships with the suppliers. Ultimately it enhances the satisfaction level of customers by this way company will be able to increase its sales volume. That would help in increasing revenues of the organization (Daugherty, Ellinger and Myers, 2015).
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3. Performance objective
Every company has some objectives which it wants to accomplish. Most of the firms want to earn high profits whereas others want to satisfy their customers. The aim, the goal of all organizations have differed from each other, it dependents upon the type of the company and resources available to the entity (Rushton, Croucher and Baker, 2014). The performance objective of Caffe Nero Ltd are discussed as below:
Caffe Nero Ltd is aiming to improve its quality to a great extent. The cited firm is delivering quality products s but r there is a huge scope of improvement. So that is the main performance objective to enhance the quality of the products. There are many competitors of Caffe Nero Ltd those which are offering quality product s to the consumers so to meet with the expectation of the users cited firm needs to enhance its quality so that it can satisfy its consumers well. In this way, the business revenues of the organization will get enhanced (Jin, 2015).
Also Read: Operations Management Techniques
Meet Customer Expectation
Another performance objective of Caffe Nero Ltd is to meet the needs of consumers. In the cited firm consumers have to wait a lot for getting a final drink. Some times they do not get the products because of the unavailability of products in major locations. Thus, the company wants to meet their expectations.
Caffe Nero Ltd wants to eliminate the speed between a customer requesting and the final receiving of the products. It is the major performance objective of the organization because in this way caffe will be able to accomplish its final objective soon (Fernie and Sparks, 2014).
Cost is closely related to the quality of the product. If the company improves quality then it will have to spend a lot on the improvement thus it will increase the cost of the organization. On another hand, if the company does not focus on the quality them cost will be in control. But it is necessary for the Caffe Nero Ltd to enhance its quality but control over cost. It is only possible with the help of effective strategies. Monthly report s of the company shows that cited firm is investing a huge amount in the improvement of quality (Rushton, Croucher and Baker, 2014). Thus it is aiming to make effective control over its cost so that it can increase the profit of the Caffe Nero Ltd.
Caffe Nero Ltd is working as a medium-size organization in the London market. Employees are skilled so they are getting employment opportunities from other cafes. That is why people are leaving the workplace soon but cited firm wants to retain skilled persons in the organization for a longer duration. It is another performance objective of the Caffe Nero Ltd that can support s cited firm in completing its goal soon (Daugherty, Ellinger and Myers, 2015).
Caffe Nero Ltd is working good but there are many areas which needed improvement. Caffe needs to improve its layout, it is required to make changes in the layout so that cited firm can grow well and can accomplish its objective soon. It is noticed that tills are attached in the wrong place. Due to this, consumers are getting troubled. Cited firms should defiantly work on its design and structure of the space. It should properly arrange tables and chairs so that some clear space can be visible by the users (Ee and Rashad Yazdanifard, 2015).
In addition to this cafe is having a limited number of staff members. When workload is here then cited firm fails to manage the customers well, at that time consumers have to wait a lot. That demotivate them and decrease their morale too. That is why the company fails to satisfy its consumers well, and people move to other brands to have drinks. When more than 10 clients come in the place at a single time them they do not get proper space to stand as well because of messy arrangements. Caffe Nero Ltd must arrange the space properly. Apart from this, it has to utilize its resources well so that the operational cost of the company can be minimized (Cabrera and et.al, 2016).
Cited firms should hire more staff members in the busy times so that business can be managed and the company can serve quality services on time to them. It should hire people part-time those who can work in busy times as well. In this way, a company will not have to give salaries to those in off-seasons. This is a great strategy and improvement that would help in accomplishing the performance objectives and goals of the organization (Pei-rong and Bureau, 2014).
In addition to this, Caffe Nero Ltd is required to do proper market research about needs and want s of consumers, in this way it would be able to offer people products as per the needs of consumers. That would help in increasing the sales volume of the company and the profitability of the organization will get enhanced soon.
4. The supply chain of Caffe Nero Ltd
The supply chain is one of the important parts of business operations. Companies have to manage their supply chain effectively in order to enhance the quality of the products. The supply chain is the network of resources, individuals and activities that are involved in the creation of final goods and services. It is the oversight of information and other resources that can help in manufacturing final goods with quality. Supplier supply the raw material and company utilize the resources well so that it can make effective control over the operational process and can manage its work well (Fernie and Sparks, 2014).
The main objective of the supply chain of Caffe Nero Ltd is to produce quality goods that can help in satisfying the needs of consumers. Risk mitigation is another objective of supply chain management in the cited firm. In this way, the company will be able to buy such raw material that can give benefit s to the cited firm and can make effective control over its cost. Caffe Nero Ltd buy raw material like tea, etc. The company purchases such raw material after forecasting the4 sales in the future (Christopher, 2016). That supports increasing the business of the company to a great extent. Supply chain management supports increasing the efficiency of the product s and company too.
Caffe Nero Ltd is having more than three suppliers those who supply different material to the cited firm. The advantage of this supply chain in the Caffe Nero Ltd is that a company can enhance its quality of products with the help of this supply chain. Apart from this, it supports minimizing the cost of the organization as well. Caffe Nero Ltd is having more than three suppliers and they all give raw material to cited firms at different rates. If one supplier asks for a high cost then in such condition Caffe Nero Ltd can buy the material from other suppliers. In this way, it would save the cost and it would be able to offer a cheaper product to the consumers. Quality services at lower rates can attract more buyers to the coffee shop. Nowadays the young generation is much more crazy for doing parties in cafe shoes (Stevens and Johnson, 2016). If a company is able to provide the lower rate products them it will attract such people and they will buy the products on the company. That can help in increasing the profit of the organization to a great extent.
On the other hand supply, chain management is not good for Caffe Nero Ltd because a cited firm is buying products from the same suppliers for a longer duration. If they do not deliver raw material on time then it may create a problem for the organization because it would not be able to serve its consumers well. Apart from this same suppliers can supply below quality products to the Caffe Nero Ltd, in such a situation it would be a problematical condition for the company because it would not be able to satisfy its consumers. Because it can influence the mind of users and can make them negative towards the brand (Jin, 2015). Thus, it is necessary for the organization to manage its supply chain well. In this way, the company will be able to enhance the quality of the products and that would help in increasing the satisfaction level of its customers.
5. Comparison of the quality process of Caffe Nero Ltd and Pret A manager
The Starbucks adopt the supply chain management and on the other side, CCD adopts the supply chain management. They both play a vital role in the enhancement and strengthen the firms' competitiveness. Thus, they both are continuously fluctuating the international market as the quality of no longer sufficient. Therefore, there is a need for new challenges that are now majorly involved in which they mainly focus on the supply to measure the effective as well as the right time an placing the goods in an effective manner (Stevens and Johnson, 2016). Thus, the business that internationally has a competition as there is not limited to the company but now they majorly involve the effective supply chains. Therefore both total quality management and supply chain management are the more complex and critical to the business performance as they are to be studied together.
Thus, in these, there is similarities and difference among the total quality management and supply chain management are to be discussed. In both the quality process of Starbucks and CCD in which they are not always are easy at the time to implement whether it is total quality management and supply chain management. There is a high level of risk and difficulties involved in it when they both total quality management and supply chain management if they are integrated. Thus, for the purpose of understanding among the conceptual difference and similarities through attaining the synergy and ignoring the failure (Christopher, 2016). Therefore, it also has to identify those areas for future research for getting opportunities if they both are to be integrated.
From the above report, it can be concluded that operation management is the most important part of business activities. In the absence of proper management of operations no company can accomplish its objective easily. From the discussion, it is found that Caffe Nero Ltd is working as a medium-sized company but it has the potential to grow well and expand its business across the world. Customers of the cited firm are satisfied but to attract more consumers towards the brand cited firm is needed to improve its layout. It needs to properly manage is space so that it can make its clients comfortable. Quality is the most important part of operation management. With the help of this company can enhance its quality well. The input-transformation-output model is one of the important tools of operation management. With the help of this organization will be able to reduce its operation cost and will be able to utilize its resources well.
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