Operations Management

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Part A: Operations and Corporate Social Responsibility

Operations managers are required to make decisions on strategic and long-term sustainability of
the business to stakeholders, as well as the environment. However, challenges are also
experienced in terms of economic, technological, social, political, and environmental issues.
Decisions made by the operations manager must respect social, political, and environmental
issues (Dunne 2008, p.135). Corporate social responsibility (CSR) ensures that organizations
introduce sustainable development goals so that decisions made by operations managers are
accepted by all stakeholders. Corporate social responsibility ensures that organizations become
accountable for economic, social, and environmental impacts based on operations imitated by the
organization. Ndhlovu (2011, p. 72) define CSR as voluntary actions takes so that there is
compliance to minimum legal requirements. Ethical behaviour when engaging in operations is a
critical component of CSR. In particular, businesses should be committed to the welfare of
employees, the society, and the local community.
According to Manente, Minghetti, and Mingotto (2012, p. 75), CSR is viewed in terms of
management practices that support high quality products and services, low costs, improved
flexibility, and dependability to the planet. In particular, a focus on competitive advantage has
led to new links between operations management and corporate strategy. Businesses continually
look to cots leadership and product differentiation as part of CSR initiatives that guarantee
competitive advantage. Operations strategy has key concepts that are critical to CSR initiatives
of an organization. Key concepts include: green supply chains, reverse logistics, green goods and
services, and green operations. Stankeviien & epulyt (2014, p. 882) also write that a
sustainable company understands the necessity of creating and producing environmentally
friendly products and services so that competitive advantage can be achieved based on
reputation. Products are a reflection of social and moral values. In particular, products do not
only represent prices and quality preferences. Business operations in terms of manufacturing,
logistics, and supply chains should adhere to social and moral values that have the greatest
benefit to humanity.
The idea of green operations has been incorporated into CSR. Rosser and Edwin (2010, p. 7)
argue that green operations have a contribution to the environmentally friendly initiatives
introduced in production, manufacturing, logistics, and other operations. Green operations

practices should be implemented in each organization so that sustainability to the environment is

achieved. In addition, green supply chains are introduced so that supply chains contribute to
sustainability goals. According to Amao (200, p. 75), the process of choosing a supplier and a
business partner should consider their ability to respect the environment and the society so that
sustainability strategy can be implemented in each organization. Suppliers that do not support
green supply chain designs are neglected by major manufacturers. For example, in the
manufacture of vehicle spare parts, suppliers capable of producing environmentally friendly
spare parts become business partners to businesses committed to sustainability goals. Aspects
such as logistics should have minimum impact to the environment as part of CSR initiatives.
Chaves, Mozas, Puentes, and Bernal (2011) assert that sustainability to the environment is a
common trend in CSR. Environmental degradation in the 21st century has led to widespread
activism against operations of organizations that have direct impact to the environment.
Organizations are required to be responsible and accountable to the environment. Any direct and
indirect degradation to the environment should be compensated by the accumulated capital
obtained by organizations. Sustainability to the environment involves meeting the needs of the
current generation without compromising in the sustainability of resources to the future
generations. Foote, Gaffney, and Evans (2010, p. 2033) write that the extent at which businesses
impact negatively to the environment has been determined through pollution from supply chain
and delivery activities. Waste from organizations, when not managed effectively, are often
disposed to the environment thereby affecting stakeholders. CSR is geared towards reducing
global warming and the effects of climate change. Sustainability of businesses in the long-term
depends on how they avoid emission of hazardous waste to the immediate environment.
Environmental sustainability is not the only trend on CSR initiatives of the 21st century. The
society is viewed as a critical component in the environment in which businesses operate (Kanji
and Chopra 2010, p. 119). Organizations should accept responsibility for the effects of operations
on the society. The social consequences should be balanced with benefits such as profits accrued
from business operations. At individual levels, persons should be allowed to exploit their talents
without restrictions and stress. At group levels, organizations are required to be honest with
labour organizations that represent the interest of employees. Social responsibility as part of CSR

also incorporates external stakeholders to organizations such as suppliers and trade partners.
Organizations are required to promote economic and social well-being of local communities.
Globalization is one of the issues that have led to the emergence of the topic operations and
CSR. Globalization refers to increased level of interdependence of countries in relation to crossborder transactions (Oh and Park 2015, p. 85). In addition, capital flows from one region to
another is on the rise. As a result, business operations have major impacts to the world.
Globalization of trade is considered the principal cause if exploitation and corruption in several
countries. However, globalization is also viewed as a process of spreading prosperity to other
parts of the world. CSR in relation to globalization aims at reconciling globalization trend and
impact to societies. Currently, there is a shared responsibility for all organizations and their
operations to be appropriate to global challenges. Responsibility to humanity and environment
does not stop when a company crosses the border into another country (Bice 2014, p. 160).
Equality in dignity, gender and respect for women and men, as well as the need to respect shared
values and norms form parts of CSR initiatives in international business operations.
Economic dimensions of CSR have also been presented by scholars. Organizations have realized
the need to make decisions that have no economic consequences. Decisions in the short-term
may prove to have negative economic consequences. However, long-term vitality of such
solutions may lead to economic benefits (Cadbury 2006, p. 4). For instance, investment into CSR
mat lead to ROI in the long-term but not in the short-term. In stock markets, environmental,
social, and governance issues determine the value of shares of certain organizations.
Organizations viewed to be unethical to the society and the environments have received negative
stock valuations (Brammer et al. 2007, p. 170). The idea of socially responsible investment has
emerged as a critical component of CSR and business operations in the international market.
Part 2: Operations Management of ASDA
ASDA is one of the biggest retailers in the United Kingdom, with operations across the United
Kingdom. Tesco provides services to millions of customers each day. One of the most critical
aspects of ASDA as a retailer involves online grocery shopping and delivery to customers
(Doherty 2006, p. 5). The company aims at creating value to the customer through products in
retail stores as well as efficient delivery of products and services. Competition in the retail

industry is based on the need to provide services base on modern online shopping technologies
(Christopher and Peck 2004, p. 7). ASDAs operations management are viewed in terms of
product delivery and supply chain management.
Operations Transformation Process of ASDA
ASDA experiences stiff competition from other retailers such as Tesco, Morrisons, and
Sainsbury. As a result, retail companies have identified the need to develop operations that can
compete in the market based on the ever changing needs of the customer. ASDA responds to
competition and complexity in the market through and effective operations strategy (Doherty
2006, p. 8). The operations strategy of ASDA can be analysed in certain aspects such as
corporate strategy, business unit strategy, and functional strategy. Corporate strategy of ASDA
involves establishment of several supermarkets across major cities and towns in the United
Kingdom (Leat and Revoredo-Giha 2013). Several stores established across the United Kingdom
ensure that ASDA increased customer flow to the corporate strategy so that sales and profits are
guaranteed.
Competition and saturation of the domestic market is a major challenge. ASDA is committed to
innovation such as online shopping and delivery of products to customers as competitive strategy
(Leat and Revoredo-Giha 2013). ASDA expansion into all part of the United Kingdom can be
related to its commitment to the success of corporate strategy. ASDA majorly focuses on the UK
market without expansion into overseas markets. One of the major disadvantages of ASDAs
corporate strategy involves the inability to compete in the international markets with other
retailers such as Tesco.
ASDA has a business unit strategy and functional strategy that achieves success in terms of
operations management. In particular, ASDA is committed to quality services to the customer so
that they can break into other markets in the United Kingdom. In terms of competition, ASDA is
among major competitors in the UK. A critical component of operations strategy is to design
services and products that benefit the customer. In particular, ASDA introduced the strong
customer focus concept whereby low prices, as well as ASDA card loyalty holders are rewarded
with points (Christopher and Peck 2004). A major competitive strategy involves the use of prices
whereby customers are allowed by ASDA to engage in bulk buying so that discounts can be

given to loyal customers (Leat and Revoredo-Giha 2013, p. 34). The online delivery system and
online shopping platform also ensures that customers achieve efficiency in terms of product
delivery. In terms of low-cost operations, ASDA created UK product sourcing tem so that they
pick food and non-food products across the United Kingdom. As a result, ASDA ensures that
cost-cutting is achieved in relation to food and non-food products as well as expansion into other
business models such as e-commerce.
According to Xie and Allen (2013, p. 6), ASDA also ensures that the delivery system and an
innovative supply chain form part of operations in the United Kingdom so that quality customer
service can be achieved. ASDAs delivery system is based on online ordering and home delivery
services. The distribution process is efficient so that product delivery meet consumer needs.
Investment into online food shopping enables ASDA to reduce time taken to serve the customer.
However, service costs have increased because of home delivery services provided by the
company. Online food sales at ASDA have reached over 200 million pounds. The home shopping
system developed by ASDA ensures that there are high levels of revenues and improved
customer loyalty to the better customer service.
Trade-off analysis of operations performance objectives
Efficiency of operations is a major concern for ASDA. In the process of increasing the efficiency
of service delivery and save costs, ASDA developed a distribution system whereby the
companys own fleet, transports products to domestic customers. The distribution system also
ensures that goods from suppliers reach the retailer at the shortest time possible. Efficiency in
service delivery and distribution of products is achieved through the use of ASDAs trucks
(Annarelli and Nonino 2015, p 12). However, there is still need for improvement so that the
distribution systems compete with Tesco as the largest retailer in the United Kingdom. In some
cases, ASDA may not have sufficient fleet to deliver and puck up goods from suppliers. In some
regions of the UK, ASDA has few trucks thereby leading to dependence on suppliers.
Cost reduction at ASDA is achieved through lean management as part of operations
management. ASDA ensures that new technologies are introduced to integrate lean management
into the business strategy. Investments in technologies such as RFID ensure that product tracking
information through the supply chains is achieved through bar codes (Leat and Revoredo-Giha

2013, p. 14). As a result, cost saving is achieved when technologies are used to reduce the levels
of employee performing manual duties. The automation of processes within the supermarket and
supply chain is a major costs cutting initiative.
In terms of dependability and flexibility, ASDA has introduced the online shopping system.
Home shopping through e-commerce platform developed by the company ensures that customers
depend on ASDA to provide efficient and quality services in terms of product delivery (Tidy et
al. 2015, p. 9). Flexibility is achieved through home delivery systems achieved through ASDAs
trucks. The online food shopping system, as well as the home delivery service work together to
achieve dependability and flexibility.
ASDAs Corporate Social Responsibility
ASDAs sustainability approach relates to respect to the environment. Reduction of food waste in
ASDAs stores and supply chain is part of CSR initiatives. Green operations concept of CSR is
applied at ASDAs. In particular, ASDA ensures that they support nature and community
projects. In terms of nature, ASDA supports tree planting across the United Kingdom and
countries such as Costa Rica (Asda.com 2015). Projects such as Nature and community ensure
that ASDA works together with stakeholders to protect and preserve biodiversity in Costa Rica
and the United Kingdom. Green operations also ensure that ASDA tackles food waste. An
innovative way of reducing food waste involves donating to charity or reducing the level of stock
at distribution centres across the United Kingdom.
Energy efficiency is another aspect of ASDAs CSR. In each year, ASDA invests over 10 million
pounds in improving the energy use so that carbon emissions can be reduced. ASDA is
committed to reduce effects of global warming and climate change as current sustainability
issues surrounding CSR. ASDA reports that since 2005, the company has managed to reduce
energy usage by 33% in existing and new stores (Asda.com 2015). Reduced energy is aimed at
reducing overreliance on fossil fuels as well as energy conservation for the benefit of the wider
United Kingdom. In addition, reduced energy ensures that ASDA reduces costs associated with
energy.

Lean management/production technique

According to Tan (2011, p. 67), Lean management/production is part of the operational
management techniques and theories used by managers to improve efficiency within the
organization. Lean management refers to removal of unnecessary processes as well as avoid
waste. The elimination of waste ensures that organizations create value to the customer. ASDA
uses lean management to analyse the supply chain. In recent years, ASDA has introduced the
concept of continuous replenishment so that customers achieve efficiency. The continuous
replenishment system ensures that real time information is provided to the supply chain system
so that point of sale data is used to determine the level of inventory and supply to be ordered by
ASDA from suppliers. Through continuous replenishment system, ASDA achieves the flexibility
of replenishing goods at several intervals within the day depending on how consumer place
orders on the online home shopping system. Constant and continuous replenishment is part of
lean management strategies introduced by ASDA as an improvement to the supply chain.
The main benefit of lean management through continuous replenishment relates to reduced
inventory holding. ASDA does not hold large volume of inventory because of costs associated
with warehousing and risks such as products becoming obsolete. The need to guarantee the
quality of food products as well as reduced costs motivates the adoption of lean management
through continuous replenishment. Since food products are highly perishable, ASDA
acknowledges the need to hold the least inventory at the shortest time possible. ASDAs reforms
into the supply chain are described as pull system but not push system. Stone (2012, p. 229)
write that the pull system is motivated by retailers so that replenishment of products is done on a
continuous basis based in the demands of the customer. In competitive retail market, continuous
replenishment as a strategy of reducing inventory levels is a major competitive advantage.

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