Application of Operation Tools in Recent Retail Revolution

Application of Operation Tools in Recent Retail RevolutionPrepared byNigatu AshangoOver view of Operation toolsOperation tools or Scientific methods have been mans outstanding asset to pursue an ample number of activities.The major advantage of mathematical models/operation tools is that it facilitates in taking decision faster and more accuratelyWhether it is a manufacturing unit, or a service organization, the resources have to be utilized to its maximum in an efficient manner.The successful use of Quantitative Technique for management would help the organization in solving complex problems on time, with greater accuracy and in the most economical way

Overview contToday, several scientific management techniques are available to solve managerial problems in dynamic retail world.use of these techniques helps managers become explicit about their objectives and provides additional information to select an optimal decision.Some of (major) tools or models to be discussed in next slides include; Transportation model, Assignment model, waiting (Queuing) model, Networking model and Inventory model

Operation tools and retail businessThe retail industry is at the center of a dramatic shift in the way consumers shop and interact with their retailersAfter hundreds of years of customers going to the store, the store is now, more and more, coming to the customerCustomers, using digital tools and channels, have broken down the retail wall. Today, they demand that retailers be wherever they are: at home, at work, travelling, even just waiting in line.

Continued.The retailers who are winning today are the ones who are best at understanding, predicting and addressing their target customer needs.A customer-centric retail strategy can be enabled by adapting traditional analytics approaches to leverage customer-based insights.New devices in customers hands expand product presentation. Its a constantly changing game as well: customers will always demand even better experiences.

Continued.More and more, innovative retailers using brilliant strategies, advanced technologies, best practices, and operational excellence grow revenue by delivering satisfying buying experiences wherever their customers are and whenever they want to buy.Therefore, the use of operation tools to solve problems of retail business of today world, which is more dynamic than ever, is fundamental issue for any successful business operation.1. Transportation modelIt is associated with day-to-day activities in our real life and mainly deals with logistics.It helps in solving problems on distribution and transportation of resources from one place to anotherThe goods are transported from a set of sources (e.g., factory) to a set of destinations (e.g. warehouse) to meet the specific requirements.transportation problems deal with the transportation of a product manufactured at different plants (supply origins) to a number of different warehouses (demand destinations).

TransportThe model helps in locating a new facility, a manufacturing plant or an office when two or more number of locations is under consideration. The total transportation cost, distribution cost or shipping cost and production costs are to be minimized by applying the model

2.Assignment model

The basic objective of an assignment problem is to assign n number of resources to n number of activities so as to minimize the total cost or to maximize the total profitassignment arises because available resources such as men, machines, etc., have varying degree of efficiency for performing different activities such as jobAssignment.The assignment model can be applied in many decision-making processes likedetermining optimum processing time in machine operators and jobs, effectiveness of teachers and subjects, designing of good plant layout, etc

This technique is also be found suitable for routing travelling salesmen to minimize the total travelling cost, or to maximize the sales3. Queuing modelDeals with problems that involve waiting (or queuing).Whenever a customer arrives at a service facility, some of them usually have to wait before they receive the desired serviceIt is quite common that instances of queue occurs everyday in our daily lifeExamples of queues or long waiting lines;Waiting for service in banks. Waiting for a train or a bus.Waiting for checking out at the Supermarket. Waiting at the telephone booth or a barber's saloon

QueuingIn designing a queuing system, the system should balance service to customers (short queue) and also the economic considerations (not too many servers). Queuing theory explores and measures the performance in a queuing situation such as average number of customers waiting in the queue, average waiting time of a customer and average server utilization.In general , a queuing system comprises with two components, the queue and the service facility. The queue is where the customers are waiting to be served. The service facility is customers being served and the individual service stations.

4.Network model

Any project involves planning, scheduling and controlling a number of interrelated activities with use of limited resources, namely, men, machines, materials, money and timeThe projects may be extremely large and complex such as construction of a power plant, a highway, a shopping complex, ships and aircraft, introduction of new products and research and development projectsIt is required that managers must have a dynamic planning and scheduling system to produce the best possible results It also requires managers to react immediately to the changing conditions and make necessary changes in the plan and schedule

NetworkA convenient analytical and visual technique of PERT and CPM prove extremely valuable in assisting the managers in managing the projectsBoth PERT and CPM techniques have similarity in terms of concepts, the basic difference is, PERT is used for analysis of project scheduling problemsCPM has single time estimate and PERT has three time estimates for activities and uses probability theory to find the chance of reaching the scheduled time.Both PERT / CPM networks contain two major components; Activities, and Events

5.Inventory modelInventory can be defined as the stock of goods, commodities or other resources that are stored at any given period for future production.Inventory control is a process itself, with the help of which, the demand of items, scheduling, purchase receiving, inspection, storage and dispatch are arranged in such a manner that at minimum cost and in minimum time, the goods can be dispatched.

Benefits of material controls

It helps to minimize loss by obsolescence, deterioration, damage etc.It helps to protect against thefts, wastages, etc. It helps managers in decision making.To minimize capital investment in inventory. To minimize cost of material purchasing. To increase the storing capacity. To maintain reasonable stocks of materials. To facilitates regular and timely supply to customers. To ensures smooth production operations. To check national wastage.

ConclusionThe above mentioned operation tools and other methods, tools and models that are not included in this presentation are the key tools for optimum operation, cost minimization and profit maximization of any business Thank you!