Operations management new

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Table of ContentsIntroduction..............................................................................................................................2

Objectives.................................................................................................................................3

Methodology............................................................................................................................4

Introduction to Keells...............................................................................................................5

Analysis....................................................................................................................................7

Decisions of Operations Management..................................................................................7

Location Planning........................................................................................................7

Layout Planning.........................................................................................................12

Supply Chain Management........................................................................................20

Product and Service Design.......................................................................................23

Process and Capacity Design.....................................................................................24

Production Scheduling...............................................................................................25

Managing Quality......................................................................................................25

Maintenance Management.........................................................................................26

Job Designing & Human Resource............................................................................26

Findings..................................................................................................................................28

Recommendations..................................................................................................................29

Conclusion..............................................................................................................................30

References..............................................................................................................................31

Page 1National Institute of Business Management

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IntroductionAs the global economy slowly turns itself around and begins its long-term recovery

driven by rapid growth in Asia, greater stability in the United States and the Middle

East, tempered somewhat by Europe’s continuing economy troubles. Sri Lanka today

stands on the verge of success and prosperity.

With the permanent peace to the country in May 2009, the Sri Lankan Government

has accelerated economic progress through a series of measures such as control of

inflation, Reduction of interest rates, encouragement of tourism sector……etc.

Therefore today’s business organizations should have to have a well-managed

Operations Management strategies within the organization in order to get the

maximum output from its employees as well as to increase the efficiency and

effectiveness of the day to day work activities in an economical way while reaching

the objectives of the organization. It doesn’t matter whether the organization is large

scale or small but almost all the organizations should have to achieve their best not

because they have to but to survive in the market while achieving the organization’s

goals and objectives. So having a well-managed Operations Management strategies

are a complete and utter plus point for any organization where every organization is

looking for maximum efficiency and effectiveness.

To the module “Operations Management” We have been asked to fulfill a report as

the end semester assignment on the topic of “Operation Management Practice in a

selected organization”.We have chosen “Keells Super” which is one of the leading

shopping Centers in Sri Lanka for our assignment. As one of the leading shopping

Centers in Sri Lankan market, we had the argument of what would be the operation

management strategies of Keells. So it’s one of the best chances we’ve got to study

the operations management practices in an organization where we can recommend

some other our views points as well.

So with that, we are pleased to present the operations management analysis of Keells

on behalf of the Operations Management module. By studying this report you would

be able to understand the layout, location planning and supply chain management of

Keells Super and how effective it has established within the Keells Super.


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Objectives

To get more knowledge about the practical side of the Operations

Management practices.

To learn about the Operations Management of an organization and to identify

its effectiveness and weaknesses.

To forecast / predict the future economic situations with regard to the

Operations Management practices.

To cover our assignment of writing an analytical report on Operations

Management.

To confirm the knowledge which we have learnt by Operations Management

module.

To write a report in proper way according to its formal format.

To build good relationship among our group members.


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Methodology

As mentioned in introduction, we have been asked to fulfill a report on “Operations

Management Practices in a selected organization” for the Operations Management

module.

We selected Keells Super for our assignment as mentioned earlier and we have been

advised to collect relevant information, study the information we collected and report

the Operations Management practices we have learnt/studied with the findings and

recommendations.

We used following methods to collect information about the Operations Management

practices of Keells Super,

Field Visit

Conduct Interviews

Browse internet

As the very first step we had a field visit / observation visit to Keells Super which is

situated at Galle town, Kaluwella. The Supermarket manager warmly welcomed us,

and we were directed to the operations manager, then he conducts a brief seminar

about the Keells Super and the keels Supers’s Operations Management strategies.

Other than that we browsed internet for the definitions and to find out the details

about Keells Super.

Finally we analyzed the information we collected with the theoretical Operations

Management strategies we have learnt at the university and here we have presented

the relevant information with the examples as it is helpful for you to get clear

knowledge about the Operations Management strategies of Keells Super.


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Introduction to Keells

The origins of John Keells Holdings lie in a produce and exchange broking business

started by two Englishmen, Edwin and George John, in Colombo, Ceylon, in the early

1870s. E. John & Co. was one of a handful of broking companies that helped build tea

production and export into the mainstay of the colonial Ceylonese economy.

In 1948, the year of Ceylon's Independence, E. John & Co. merged with two London-

based broking companies to form the private limited company of E. John, Thompson,

White & Co. Ltd. Business opportunities in a fledgling post-Independence economy

spurred growth and expansion throughout the Fifties and Sixties. The name that is

now synonymous with Sri Lankan business leadership came into existence following

the acquisition of another Colombo broking company, Keell & Waldock Ltd, in 1960

the resulting entity being named John Keell Thompson White Ltd.

As Ceylon modernized, becoming the Republic of Sri Lanka in 1972, social and

political change helped drive John Keells' expansion and diversification. The growing

economic importance of travel and tourism was reflected in the acquisition of Walkers

Tours & Travels, the leading inbound tour company of the time, and the

Mackinnons’Group, which had extensive interests in shipping. Thus began a process

of diversification that has resulted in today's 70-member conglomerate. The parent

firm, now known as John Keells PLC, became a public quoted company in 1974.

In October 1986 a newly incorporated John Keells Holdings Ltd. (JKH) acquired a

controlling stake in John Keells Limited and obtained a quotation on the Colombo

Stock Exchange amidst a heavily over-subscribed public share issue.

A leading supermarket chain in the country which has been in operating for the last 20

years and has been focusing on offering the best in range, quality products and

services to our valued customers reaching out to a cross section of Sri Lankan

consumers. Currently they have 45 supermarkets and rapid expansion plans are

underway to make their presence felt in more locations. The wide range of products

include groceries, essentials, meats, vegetables, fruits, bakery, dairy, household,


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toiletries and home-ware such as linen, books, stationery, pharmacy and beauty

counters at selected outlets.

As a retailer committed to uplifting the standards of the supermarket industry in Sri

Lanka, Keells Super challenged itself to earn the stamp of quality from the Sri Lanka

Standards Institute, the very first supermarket chain in the country to do so.

This exclusive recognition means that customers can be assured of the quality and

hygiene of the stores as well as its products consistently. The certification was

awarded following a rigorous checking and testing process over a period of time at

each certified store.

Apart from the testing of the products sold, the certification covers areas of

environmental hygiene, hygienic production of food in production bakeries and

kitchens, transport, handling and storage of foods, cleaning, maintenance, temperature

control, pest control systems and preventive/control measures for hazards.

In a market environment which has faced public criticism doe to hygiene and safety

factors, customers of Keells Super can now enjoy the freedom and satisfaction of

shopping from groceries to fresh foods, with Keells Super-fast earning a reputation

for its fresh foods. The certification also required specific conditions for primary food

items such as dairy, poultry, bakery, fresh fish, fresh and processed meat products,

fresh fruits and vegetables.

What is also interesting is that the safety, hygiene and quality tag had to be earned by

ensuring that the equipment and fittings used to handle food items, and even the store

staff themselves, complied with the requirements. So, come over to Keells Super with

confidence and enjoy your shopping in safe hands.


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Analysis

In this analysis you can have more knowledge about Layout Planning, Location

Planning and Supply Chain Management strategies of the Keells Super according to

the Operation Management functions.

Decisions of Operations Management

Location PlanningLocation planning decisions are very vital for all types of business units. So every

firm must use location planning techniques because it affects the cost, selling price

and demand of the product. Facility location for production and service operations can

have a great impact on investment and operating costs.

Location can be identified as,

“Named geographical place that provides permanent facilities for movements or

goods or is designed for a stated purpose”

Facility location also known as location study, with mathematical modeling and

solution of problems concerning best possible position of facilities in order to

minimize transportation cost and avoid placing hazardous. It is not practical for many

service providers to provide the service at the customer location. Therefore, service

providers need to consider the customers’ cost of transportation to and from the

service location.

Need of Location Planning


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1) Expansion

If the company wants to expand and diversify its activities, they will have to

search for a new location for setting up their new business unit. In this case

they will need a location planning.

2) Cost advantages

The existing plant is not near a market place, it will increase the transport cost.

This will also increase the cost of the product. To avoid this, the company will

search for a new location which is near to the market.

3) Discovery of raw material

Generally a plant must be located at a place where raw material is available.

4) Additional facilities

New facilities may be necessary to improve the quality of work, to meet rising

demand and etc.

5) Political and social changes

This may make the existing location unattractive for doing business. Social

changes may require production of eco-friendly goods. This may require a

change in location.

6) Increasing product demand

Demand of the product may increase at other places. So the company will

have to start a branch in another state. This would lead to a search for new

location.

Factors affecting location decisions


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Proximity to customer

How close the business is to their customers. This is very vital for a service

organization. Every business depends on its customers for its very survival. Owners of

retail and service businesses usually need to locate their businesses primarily based on

customer volume and convenience.

Business climate

This refers to the location of competitors and the supportive environment available for

the business operations.

Infrastructure facilities

Accessibility of proper road network, water supply, electricity, waste disposal and

drainage system.

Quality of labour

Can the organization obtain skilled labours at lowest possible cost.

Proximity to suppliers

An organization is depending on suppliers (distributors, wholesalers, manufacturers,

etc.). So the organization should have a easy access to the suppliers.

Political climate

The political stability is very important when selecting a location. Otherwise the

organization could not be able to do their business activities.

Government conditions

To become a successful organization government conditions should favorable to the

organization.

Environmental implications


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Pressure groups may be major barriers to the business activities. So there should

consider environmental implication when selecting the location.

Competitive advantage

Competitive advantage is a advantage that gives a gain over other competitors. So

when selecting a location the organization needs to see whether they get any

competitive advantage.

Host community

Surrounding community can impact on the business. So as other factors we should

consider the culture, the value system, the education level and the standard of living

of the people when selecting a location.

Techniques for facility locations

Factor rating method

Centre of gravity method

Transportation model

Break even analysis method

Analysis

Proximity to Customers


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As supermarket chain Keels targets all level of customers in low level to high level.

Proximity to customer is one of the main factors in their location planning. According

to Keells Super location planning standards they always start their new outlets within

one kilometer from main bus stand and railway station. In Galle, Keells Super outlet

situated 550m away from Bus stand. As they target all level of customers,

They expect those customers will come to their outlet. However it didn’t success as

Keells Super wishes. Because those customers access Cargills food city near by the

stand.

This outlet is easy to customers who use vehicles. They provide spacious parking

facilities in their premise.

Business Climate

Keells Super has three competitors in Galle. Pagoma Food Mall, Sea Line Food City

and Two cargills outlets compete with Keels super. According to Keells manager they

take only Cargills food cities as their main competitor. First Cargills food city in Galle

situated near by bus stand and it has massive customer base. But lack of parking

facilities and difficulties in vehicle handling reduce their high-end customers. Keells

use this fact as their opportunity. And they start this outlet with eliminate that parking

and space problems. That opportunity gives competitive advantage and increase high

end customer base of Keells Super. After establishing keels outlet, cargills expand

their food city chain with opening new large other food city in center of the city with

spacious parking facilities. It attracts all level of customers because of their easy

access and its advance strategy of both food City and KFC restaurant under one roof.

Keells super outlet situated in Kaluwella area. This area is consisting of number of

slow moving businesses such as jewelry industry and showrooms. Because of that

reason number of customers accesses are low in that area. It reduces Keells customer

base. Current customers are looking easy flow access at their shopping journey. Since

there are no related and supportive neighbor businesses in Kaluwella area it breaks

shopping flow.

Infrastructure Facilities


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As Keells outlet situated in Kaluwella area it benefited all municipal infrastructure

facilities offered by Galle Municipal Council. Keells outlet benefited from proper

road facilities. Keells premises bounded to two roads and one of them is the

Colombo-Matara A2 road.

Quality of employees

Keells recruits their supermarket employees within 10km area of outlet. It is not a

difficult thing to find experienced super market employees from this area.

Safety

As the selected place situated in highly urban area location safety is ensured for

Keells Super. Area haven’t prerecords as a criminal area or not socialized behaviors.

And always area consists of policemen and police station is situated near by outlet.

Environment

Galle area was highly affected from 2004 tsunami disaster. Most business places in

Galle city and Kaluwella area were damaged from it. After disasters most buildings

are designed to face high water levels. Keells Super layout floor also build few feet

above from land level. This area hasn’t any other environment problems according to

history records. Because of that safety of customers and products are ensured.

Layout Planning

A layout can be simply defined as the way of arranging or placing any kind of good or

object…… etc. within the organization, in order to increase the level of efficiency,

effectiveness in an economical way

Today’s business organizations should have a well-managed layout system within the

organization. So having well manageable layout gives the maximum output from its

employees as well as to increase the efficiency and effectiveness of the day to day

work activities in an economical way while reaching the objectives of the

organization.

A good retail layout depends on how the varies measures of customer satisfaction are

met on your layout. The layout is the key performance measure of business & it’s a


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special language to communicate company image to the customer. Customer loyalty,

emotional connection, customer convenience and level sales can be influenced by the

layout.

When planning retail layout you have to mainly consider about these four factors

Walking Space

A good retail store layout allows for sufficient walking space for customers. If the

store provides shopping carts, then there must also be space for customers to stop near

a product display and park a cart without disrupting the flow of traffic. This is very

important in retail layout design.

Flow

The layout of your retail store should allow customers to enter from the front and be

encouraged to walk to the back of the store. This increases the amount of time that the

customers spend in the store that they will buy more products. The layout aisles

should be design that brings customers through the front door with impulse products

and some high-demand items works customers to the back of the store with higher

priced items and then allows them to exit through aisles of more impulse items at the

cash register locations.

Eye Level

Putting products at the proper eye level will help to improve sales. But it is important

to remember whose eye level you are trying to reach. If you are trying to sell tennis

racket to adults, then put the tennis racket at adult eye level. A toy you are trying to

sell to children needs to be at a child's eye level.

Display Cases

Display cases are important functions in the layout of a retail store. Expensive product

can be put in a lighted display case to draw attention to it. You can increase the

effectiveness of a display case at the cash out area by putting a sales associate there to

engage customers and answer questions.


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Importance of layout A proper layout plant reduces manufacturing costs through reduced materials

handling, reduced personnel and equipment requirements and reduced process

inventory. Proper layout planning has so many advantages. Some of these advantages

are,

Economies in handling

Effective use of available area

Minimization of production delays

Minimum equipment investment

Improved quality control

Avoidance of bottlenecks

Better supervision

Improved employee morale and Reduced number of accidents

Types of layouts

Process Layout

It is also called functional layout. It is generally associated with batch production.

Factory is divided into similar process units. And within these similar process units all

similar facilities are grouped together. Example Movie sets or studios

Product layout

It is also called line layout. The layout plant, size and shape of building, location and

shape of storage yard, position of material handling equipment is such that material is

flowed in one direction at the steady rate. All equipments and machines used in this

process are of special type and highly trained labor is used in this layout. Examples

are assembly lines of automobiles, refrigerators, radio, televisions and air

conditioners.

Project layout

It is also called fixed position layout. In this type of layout product to be produced

remain at fixed position and machine, material and man are brought at the assembly

position. Examples: Aero plane, ships and heavy machines.


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Cellular Layouts

Primarily this type of layout is an attempt to reduce the complexity of process layouts.

It divides transforming resource up into small clusters which can be used to act upon

different products or product groups. Within each cell layout can be almost identical

to product layout.


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Layout of the Keells Super – Galle Branch


(C)

(A)

(D)

(E)(F)

(G) (H) (J)(I)

(M)(L)

(K)

(O)

(N)

(P) (P)(P)(P)(1)

(B)

(2)

(1)(1)

(3)

(5)(3) (2)(2)

(1)(1)

(5)

(4)

(3)(2) (2)

(3)

(7)

(6)

(3)(4)

(4)(4)(4)(8)

(1) (1) (1)(1)

(3)

(3)

(2)(2)(2)(2)

(9)

(5)(4)

(3)(3)

(5)(5)

(4)

(4)(10)

(6) (6) (4)(6)

(2)(1)(1)

(2)

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(B) (1) Cool water(2) Cool drinks(3) Bill Payment

(4) Water (7) Canned soft drinks(5) Red bull (8) Cooler(6)Bottled soft drinks (9) Biscuits(10) Coffee

(C) (1) Liquid milk (2) Juices (3) Coca cola

(D) (1) Chocalates (2) Noodles (3) Deserts (4) Clearance corner

(E) (1) Marshmallows/ Samapoosha (2) Desert ingredents(3) Cereals (4)Spices

(F)(1) Trollys (2) Samahan/Marmite/Jam (3) Mortin /Car wash(4) Pharmacy (5) Fruits and Vegetables

(G) (1) Munchee products (2) Milk Powder (3) Tea(4) Energy Milk powder (6) Anchor

(H) (1) Torch battery (3) Washing (4) Landry powder(5) Magazines (6) Lysol

(I) (1) Flora Paper (2)Shaving (3)Perfume(4) General needs (5) Stationary (6) Lipton

(J) (1) Tooth paste (4) Freelan(K) Rice

(L) Freezers

(M) Cheese and Butter(N) (1) Ice cream (2) Freezers

AnalysisKeells have unique layout plan for their supermarkets. They have three levels in their

supermarket chain according to outlet size. They named them as Medium, Large and

Extra-large. Galle branch is a large outlet.

This layout plan was designed according to basis of easy access. Front shelves are

consisting of morning needs such as breakfast preparing solutions. Middle of the

layout consist with daytime needs and general needs.

Front morning solutions are for quick customers who visit morning. They are looking

quick solutions for their needs in minimum time. They do not wish long shopping at

morning time. Middle level is for daytime customers. They spend more time in


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shopping and purchase lot of things such as general needs and vegetables. This level

has high variation in products.

Keells uses Grid layout plan for their supermarkets. Keells Large consists with 8 large

two side shelves and long wall shelves in sides. Every two side shelves consists two

side shelves those are maintain by unique products. Those small side shelves are

owned by leading companies after paid to Keells. Every main shelf has six racks.

Planogram of shelves based on two dimensions.

1. Product type

2. Price

3. Safe

Relative products are stored in one shelf. It improves free flow relationship at

shopping in Keells Super. They store those relative products according to left to right

price ascending order. It helps customers to identify price changes in same product

category without checking prices one to one. When applying these standards, Keells

also presents these products according to brand identifications.

When arranging products in shelves, Keells pay their attention on safety too. They

store most weighted products in bottom rows and soft weighted products in top of the

shelves. Keells do not use product category variations vertically. Because if there is

vertical product variation, it leads to get low attention from customers towards top and

bottom product lines. Specially 4th and 5th rows bear most identical products and

products with reputed brand names. It gives direct idea product category immediately.

Keells Super highly concern about this eye sight matching strategy when presenting

products. Each product and brand category in the shelves has reasonable space and

availability of large quantity. Shelves are not consist with small amount of products in

single category. It improves ability of product availability even at fast moving

situations. It gives reasonable time to fill shelves. All shelves hold price tags relevant

to products in that partition. It gives information of price without examine product to

find its price.

Ice cream, meat and other cold needed products are store in transparent refrigerators

for easy selection. Because of this there is no need to open the refrigerator to select


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and find products. Continuous opening of these large refrigerators do huge electricity

waste. Fruits and vegetables are store in open shelves with special cooling system to

protect freshness. Those shelves are designed for maintain minimum wastage through

elimination of one on one storage.

All shelves are around five feet in height. It maintains easy access at the purchasing.

Anyone can easily get top row items without help of employees. It improves both

customer and employee safety at handling items. There is four feet gap between large

shelves. That gap is enough for three parallel human exchanges and two parallel cart

access. Side shelves do huge contribution in pushing customers to buy those reputed

strong brands. These small side shelves are designed according to brand preferences

and themes.

At Keells Galle, there are side shelves for strong brands like Anchor, Munchee,

Redbull, Coca Cola, Eveready, Lysol, Signal and Freelan. Side shelves at front of the

layout are for products with special offers. These front shelves easily attract

customers at their paying time. Customer has to spent sort of time at cashier point till

checking and billing their purchased products. Keells front shelves with offers

motivate these customers to buy those products and customers also pay their attention

towards these eye-catching offers. Keells use this customer’s attraction behaviour on

offers as their core strategy.

There are four cashiers in Galle Keells Super market. All these cashiers are separated

and it improves free flow among them. These separated shelves are placed in as

saving large space around them and it reduces queues in rush hours.

This layout design has proper air condition system and there is no any difficulties in

breathing even rush times. This layout designed with proper light system which

provides same level of soft light all the day. There is camera system which covering

whole layout. It ensures safety of people, illegal behaviors and thieveries.

Front of the supermarket made by transparent glasses and it is absolute requirement

for modern competitive retail outlet. This transparent glass wall gives inside view to

out. However according to Keells Super layout they do not placed shelves near to

front wall. All shelves are places five meters away from front wall. In Keells Galle

outlet view through front glass directs eye to four front cashiers instead of attractive


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products. Direct view of products through front wall increases the prosperous of the

supermarket. Keells has ability for this change since their front wall has no issues

from direct sunrise.

Front of the building has huge name board of Keells Super in ash colour building

background. This front image is not giving enough impression on keels Super since

their main competitor use same theme colours to their outlets in maximum level.

Inside of the supermarket is not holding their colour theme strongly. Combination of

theme colours hold huge place in increasing customer attraction. Entrance of the

outlet consists with small staircase and it slightly de-motivates customers and

entrance in not hold attractive welcome look.

Supply Chain Management

Definition of 'Supply Chain Management - SCM'Supply chain management is the streamlining of a business' supply-side activities to maximize customer value and to gain a competitive advantage in the marketplace. Supply chain management (SCM) represents an effort by suppliers to develop and implement supply chains that are as efficient and economical as possible. Supply chains cover everything from production, to product development, to the information systems needed to direct these undertakings

Supply Chain Management

Supply Chain management plays a vital role in appropriate operations management.

Supply chain management involves managing the flow of materials and information

from suppliers and buyers of raw materials all the way to the final customer. Its aim is

to reduce the overall cost and improving the quality and the delivery of the service.

Team approach is essential in supply chain management. It requires the cooperation

from all the departments such as marketing, purchasing, operations, and engineering.

It will result in more satisfied customers. It has become possible with the development


CustomerRetailerDistributorManufacturerSupplier

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of information technology tools which assist in collaborative planning and scheduling.

The technologies help to combine the supply chain and design collaboration, which

enables companies to respond better and faster to changing market needs. The

companies which have achieved great success through supply chain management are

Dell Computer, Wal-Mart and etc.

Today businesses must think in terms of a global marketplace in order to compete

effectively. This includes the way they view their customers, competitors, and

suppliers. Key issues are meeting customer needs and getting the right product to

markets. Operations management is responsible for most of these decisions.

Operations Management decides whether to tailor products to different customer

needs, where to locate facilities, how to manage suppliers, and how to meet local

government standards. Also, global competition has forced companies to reach higher

levels of excellence in the products and services they offer. The use of best supply

chain management should be used in supermarket retail branch for excellent

management of the operations. There are 3 different types of supply chain

management flows:

The product flow:

It corresponds to the flow of goods to customer from supplier.

The information flow:

It corresponds to the flow of transmitting orders and updating the delivery status.

The finance flow:

It corresponds to payment schedules, credit terms, consignment and title ownership

arrangements.

Supply chain management Principles

1. Try to know the product closest to the customers and speed conversion across the

supply chain.

2. Manage the raw materials wisely to reduce the total cost of owning materials and

services.

3. Develop supply chain that supports multiple level decision making.

4. Scale the success of the product reaching the customer effectively and efficiently.

5. Listen to market vibes and change the supply chain accordingly.

6. Customize profitability of customer.


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7. Serve segment customers based on service needed and adapt the supply chain to

serve with profitability.

Supply Chain Benefits

Cost

Reduced inventories

Reduced waste

Reduced total system costs

Service

Establishment of a collaborative framework

Near real time information flow

Reduced variation and increased quality

Business growth opportunities

Preferred source for new opportunities

Expanded benefits to other customers

Keell’s Method of Managing the Supply Chain

Keells supermarket has been able to assume market leadership position primarily due

to its efficient integration of suppliers and distribution to stores.

Keells’s supply chain begins with strategic sourcing to find products at the best price

from suppliers who are in a position to ensure they can meet demand. Keells

establishes strategic partnerships with most of their vendors, offering them the

potential for long-term and high volume purchases in exchange for the lowest possible

prices.

Technology plays a key role in Keells’s supply chain, serving as the foundation of

their supply chain. Keells has a good information technology infrastructure. Its

network design allows Keells to accurately forecast demand, track and predict

inventory levels, create highly efficient transportation routes, and manage customer


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relationships and service response logistics. When the stocks reach the minimum level

at the Keells supermarket-Galle, an electronic message will aggregate to the

warehouse at Colombo by this network. Then the shortage level will be full filled

within short time. Their delivery dates are, Monday, Wednesday and Friday. In

addition to that Galle Supermarket maintains a small store.

Keell’s supply chain management strategy has provided the company with several

sustainable competitive advantages, including lower product costs, reduced inventory

carrying costs, improved in-store variety and selection, and highly competitive pricing

for the consumer. This strategy has helped Walmart become a dominant force in a

competitive global market. As technology evolves, Walmart continues to focus on

innovative processes and systems to improve its supply chain and achieve greater

efficiency. Products like Cigarettes, Yoghurt, Chicken, Ice-cream (Elephant House),

Eggs, etc. will be purchased by the agents in Galle. To get a new supplier they give

the priority to customer expectations and the approval will be given by the Head

office Colombo.

Product and Service DesignCompanies choose various ways to design their products and the type of services they

provide, which include: standardization, mass customization, delayed differentiation,

modular design, and robust design. Deciding which method to use is very important

along with deciding the company's target market. Deciding the right method,

establishes good productivity and efficient way of operations.

Service design is an activity of organizing and planning people, communication and

material components in order to improve service quality. It is the interaction between

the service provider and customers and the customers' experience. A service is

anything that is done to or for a client and is created and delivered simultaneously

Product Designers conceptualize and evaluate ideas and themes they find profitable.

The designers make these ideas tangible through products using a systematic

approach.

Difference between service design and product design: Service design is an intangible

aspect while product design is tangible. Services are generally created and delivered

at the same time and cannot be held in inventory like actual products. Also, services

(especially quality one) are highly visible to customers.


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Process and Capacity DesignCapacity refers to a system's potential for producing goods or delivering services over

a specified time interval. Capacity planning involves long-term and short term

considerations. Long-term considerations relate to the overall level of capacity; short-

term considerations relate to variations in capacity requirements due to seasonal,

random, and irregular fluctuations in demand.

The most important concept of capacity planning is to find a medium between long

term supply and capabilities of an organization and the predicted level of long term

demand. Organizations also have to plan for actual changes in capacity, changes in

consumer wants and demand, technology and even the environment. When evaluating

alternatives in capacity planning, managers have to consider qualitative and

quantitative aspects of the business. These aspects involve economic factors, public

opinions, personal preferences of managers.

Three key inputs to capacity planning:

1. The kind of capacity that will be needed

2. How much capacity will be needed

3. When will it be needed.

6) Material requirements planning and Inventory Control

Material requirements planning (MRP) is a production planning and inventory control

system used to manage manufacturing processes. Most MRP systems are software-

based, while it is possible to conduct MRP by hand as well.

Success of an operation department of any organization is dependent upon an efficient

production plan. One of the key essential of a production plan is material and

manufacturing planning system. Material requirement planning plays a pivotal role in

assembly-line production. Material requirement planning is a system based approach,

which organizes all required production material.

Inventory Control is the supervision of supply, storage and accessibility of items in

order to ensure an adequate supply without excessive oversupply.


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It can also be referred as internal control - an accounting procedure or system

designed to promote efficiency or assure the implementation of a policy or safeguard

assets or avoid fraud and error etc.

Production SchedulingScheduling is an important tool for manufacturing and engineering, where it can have

a major impact on the productivity of a process. In manufacturing, the purpose of

scheduling is to minimize the production time and costs, by telling a production

facility what to make, when, with which resource, and on which equipment.

Production scheduling aims to maximize the efficiency of the operation and reduce

costs.

Master Production Schedule (MPS) is a plan for production, staffing,

inventory and resources. It is usually linked to manufacturing where the plan

indicates when and how much of each product will be demanded. This plan

quantifies significant processes, parts, and other resources in order to optimize

production, to identify bottlenecks, and to anticipate needs and completed

goods.

The MPS translates the business plan, including forecast demand, into a production

plan using planned orders in a true multi-level optional component scheduling

environment. Using MPS helps avoid shortages, costly expediting, last minute

scheduling, and inefficient allocation of resources.

Scheduling Types

Companies use backward and forward scheduling to allocate plant and machinery

resources, plan human resources, plan production processes and purchase materials.

Forward scheduling is planning the tasks from the date resources become available

to determine the shipping date or the due date.

Backward scheduling is planning the tasks from the due date or required-by date to

determine the start date and/or any changes in capacity required.

Managing QualityQuality refers to the ability of a product or service to consistently meet or exceed

customer requirements or expectations. Different customers will have different


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expectations, so a working definition of quality is customer-dependent. Some of these

consequences of poor quality include loss of business, liability, decreased

productivity, and increased costs. However, good quality has its own costs, including

prevention, appraisal, and failure. Successful management of quality requires that

managers have insights on various aspects of quality. These include defining quality

in operational terms, understanding the costs and benefits of quality, recognizing the

consequences of poor quality and recognizing the need for ethical behavior.

Understanding dimensions that customers use to judge the quality of a product or

service helps organizations meet customer expectations.

Having good quality is a competitive advantage against others who offer similar

products or services in the marketplace.

Maintenance ManagementThe term of maintenance covers all activities undertaken to keep equipment in a

particular condition or return it to such condition.

Maintenance management is not to repair broken equipment rapidly. Modern

maintenance management is to keep the equipment running at high capacity and

produce quality product at lowest cost possible.

Objective of the maintenance is as priority one, to create an availability performance

which is suitable for production demands in the organization. No mechanized

company has yet succeeded to produce with stopped equipment production buy

availability performance from maintenance.

Job Designing & Human ResourceThe objective of a human resource strategy is to manage labor and design jobs so

people are effectively and efficiently utilized. Good job design is needed to ensure

appointees have the skills and capabilities to be successful in performing the role and

is fundamental to a well-functioning organization.

job design means the ways that decision-makers choose to organize work

responsibilities, duties, activities, and tasks. Job Redesign thus involves changing

work responsibilities, duties, activities, and tasks. Through job design, organizations


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try to raise productivity levels by offering non-monetary rewards such as greater

satisfaction from a sense of personal achievement in meeting the increased challenge

and responsibility of one's work. Job enlargement, job enrichment, job rotation, and

job simplification are the various techniques used in a job design exercise.


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Findings

Location of Keells Super Galle outlet is relatively far from crowded area of

the city. This outlet situated 550m away from Galle main Bus station and

crowdful area. Middle of the city consists of major businesses, banks and fast

moving businesses. In this area has two main Cargills Food Cities. Current

location of the Keells Super breaks the expectation of the most customers to

easy access.

Lack of supportive business around the Keells outlet is huge problem for

customer attraction. There are no related businesses and fast moving product

businesses near by the Keells.It de-motivate customers to use that area

recently.

This outlet faces to A2 Colombo-Galle main road. Under new road

development project increased the width of the road and separated road into

two lines using concrete line. Because of this separation customers with

vehicles are faced road accessing difficulties when entering and exiting.

There is no any bus stop within 400 meters to both Galle and Colombo sides.

There are no powerful identification signs in Building

Maintenance of layout standards are broken in some places. Some products are

presented in out of the shelves and different shelves due to space problems.

Due to standards, outlet could not get maximum benefits from glass front

windows.

There is standard for store Chemicals and food separately. But front shelves

with products with offers hold both chemicals and food products in single

shelves

According to Keells supply chain, they receive ordered products in Monday,

Wednesday and Friday. There are shortages in some slow moving products

due to lack of attention to fill those products.

There are issues in appointing new suppliers and new products. Appointing

process takes long time and it is controlled by Colombo head office.

Since their main competitor is most reputed and one of the large market share

holder in dairy products and sausages, Keells face problem of unavailability

of those reputed brand in their outlets.


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Recommendations

Mother company of Keells Super has solid base in Sri Lankan market. So they

can pay their attention to move this supermarket towards middle of the city.

Improve front look using theme colors and sign boards to attract customers.

Rearrange spaces for fast moving products

Place shelves near by the front glass window and entrance to attract more

customers.

Appoint employee to maintain order of product placing according to

standards.

Give more attention to save international standards of product placing instead

of store opposite products in same shelves.

Just in time supply method is most suitable for this type of supermarkets.

Make time saving and flexible method to appoint new products and suppliers.

It is most needed requirement in this competitive market.


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Conclusion

Analysis of location planning layout and supply chain management regard to Keells

Super Galle outlet indicates its advances and defects according to operations

management theories. As this is one of the main outlets of island wide Keells

Supermarket chain defects doing huge damage to image of whole chain.

At starting Galle outlet they failed to place it competitive location in Galle. It fails to

compete with Cargills food cities at Galle city. Cargills compete with step ahead in

location planning. In layout planning, Keells has good view and plan with advanced

strategies. But layout has pay much attention on front appearance since current

businesses are running on outlook and competitive advertising their most important

factor in layout plan is spacious layout design. Product ordering and receiving system

of Keells Super should to be more flexible appointment of new quick system to

compete with competitors. According to this analysis Keells need to take action to do

and face huge difficulties with their current location and need to do modifications in

supply chain.


[ ] July 13, 2014

References Production schedule definition, getting the facts on business dictionary.

Available from:www.businessdictionary.com[Accessed 10th July 2014]

Chase RB,Shankar R,Jacobs FR,Aguilano NJ, Operation and management,12th

edition


Education

Operations management new