Operation management problems in SCOPE
This report details the operation management problems in the SCOPE charity shop in Newport. SCOPE is a registered charity that supports disabled people suffering with cerebral palsy. The shop faces problems like unskilled volunteers, lack of donations, and the dependability of the shop on the donations. The unskilled volunteers result in reduced customer service and the dependability on donor means that there is a lesser variety of products available. These problems were identified through observation and by talking to the staff members and customers.
The SCOPE charity shop should consider introducing a two week training course for their employees and should also consider empowering their employees. This will help the shop as the customer satisfaction would improve and the number of return customers would increase. They should also consider corporate tie-ups to reduce the dependability of the shop on the donors. SCOPE shop should consider implementing Total Quality Management to improve the operations of the shop. Launching an online shop would also a good idea as target customer would increase.
People associated with the charity have given a positive reactions to these changes and improvements, as shown by research findings, and would probably be happy to be a part of it.
Formed in 1952 SCOPE is a registered charity that supports disabled people suffering with cerebral palsy. The vision of the company is 'A world where disabled people have the same opportunities to fulfil their life ambitions as non-disabled people.' (SCOPE ANNUAL REPORT, 2009)
Cerebral palsy is a term which covers a number of different conditions where the brain does not develop properly, resulting in problems with movement, posture and co-ordination. Every individual is affected differently with cerebral palsy. (Dr. Trisha Macnair, August 2010)
Scope has got over 250 shops which help raise funds. These charity shops collect donations from people and then display and sell them. The scope charity shop in Newport is run by the store manager Trisha Susan and the assistant store manager is Susan Johnson Brown. These two are full time employees. The customer care, cashier, and warehouse individuals are volunteers and are part-time employees.#p#分页标题#e#
The scope charity shop in Newport sells a selection of good-quality donated goods to suit all budgets:
Clothes - ladies wear, menswear and children's wear
Shoes - men's and ladies
Accessories - bags, jewellery, purses, scarves, shoes
Home ware - crockery, glassware, cutlery, cookware and utensils
Bric-a-brac - ornaments, pictures, home decor
Books - all sorts of fiction and non-fiction
Music, movies and gaming - CDs, DVDs plus vinyl (collectable records), videos, computer games consoles, accessories and software
Sports equipment - dumbbells, exercise equipment, bats and balls
Collectables - antiques, stamp collections, cufflinks, watches and cameras
Electricals - in some shops, we sell tested good-quality small electrical goods such as hair driers and CD players
The organizational structure of the scope charity shop in Newport can be presented through an organizational chart.
Asst. Store Manager
Area Manager Volunteers
The customer care individual, cashier, and the ware house individual are volunteers and receive no formal training for the job. The minimum volunteer age is 19 years and the maximum volunteer age is 74.
Five performance objectives
Slack et al. (2007) define operations management as "the activities, decisions and responsibilities of managing the production and delivery of products and services"
Managing the operations of an organization is important for ensuring that it is carrying out the right activities, with enough resources and at the right time to achieve the organizational objectives. Operations management focuses on how to combine resources and activities to produce outputs and outcomes, which can then be monitored and evaluated by comparing them with the performance indicators previously set. By making these comparisons it can be identified that which aspects of the operations work well and which needs to be changed. Sound operations management provide assurance to funders, staff, volunteers and other stakeholders that the organization is working effectively.
An organization should try to satisfy its customers' requirements for speedy and dependable services at reasonable price. There are five basic performance objectives and they are relevant to all types of operations:#p#分页标题#e#
Cost (Slack, N. et al, 2001).
These performance objectives of operations are analysed here in accordance with SCOPE charity shop.
Doing things right by providing error free goods and services, which will satisfy the customers, is known as 'quality'. The charity is maintaining the quality of the products displayed but sometimes problems arise because some of the displayed items that are donated to the charity are sub-standard.
Another performance objective is speed, which means doing things quickly, to reduce the time between the order and the availability of the product or service to the customer. The delivery of the products to customers is currently taking time and is affecting the customer response. The main reason for this is that the part-time staffs are not qualified enough. The part-time employees are volunteers and are not given any formal training for their job.
Third performance objective is dependability which means doing things in time for customers so they receive their goods or services when they are promised. The charity is dependent on donors and customers and this sometimes affects the operations as there is non-availability of products at times.
An obvious effect of responding to an ever-changing environment is that organisation changes their products and services and changes the way they do business. This performance objective is known as 'flexibility'. (Peters, T., 1998) argues that we must learn to love change and develop flexible and responsive organizations to cope with the dynamic business environment. As stated above, the charity is dependent on the donors and this also affects the flexibility as there is a lesser variety of products available.
One main operations objective, particularly where companies compete on prices is 'cost'. Lower prices are universal attractive objective to customers, and can be achieved by reducing expenses. Products are sold at an economical value in the shop and a fixed 15% of the value is paid to the government, which reduces the profit margin for the charity.
Summarizing from above, the main problems with the current operation system of the charity shop are:
The quality of donations
Unskilled staff (volunteers)
Non-availability of products (because of donations)
Lesser variety of products (because of donations)
Very low profit margin.
A cause-and-effect (CE) diagram is a graphical means for organizing and displaying interrelationships of various theories of the root cause of a problem. Cause and Effect diagrams are also commonly referred to as fishbone diagrams (due to their resemblance to a fish skeleton) or as Ishikawa diagrams in honour of their inventor, Kaoru Ishikawa, a Japanese quality expert. (Scott Leavengood and James E. Reeb, 2002)#p#分页标题#e#
COMPETITION DEPENDENCE ON DONORS
Other charities Lesser variety
Donations Online auctions Non-availability
Collection Cost Delivery of Products
Recycling Costs Customer response
Apart from the problems identified above there are other areas where the shop could make improvements. Currently, the shop is heavily dependent on the donors which leads to lesser variety and sometimes non-availability of products.
SCOPE charity should also consider launching an online shop. This will increase the number of target customers as more people will have easy access to the shop. This will also give SCOPE a competitive advantage over its competitors.
Total Quality Management 全面质量管理
Total Quality Management, or TQM, is the process of instilling quality throughout an organization and its business processes. TQM aims to achieve success and customer satisfaction by embedding an awareness of quality all the way through a business, through planning and feedback. TQM is about meeting quality expectations as defined by the customer; this is called customer-defined quality. However, defining quality is not as easy as it may seem, because different people have different ideas of what constitutes high quality. The Total Quality Management model will only work when everyone in the organization gets involved. The theory is to work towards using the best possible processes to offer the best possible products to produce the best possible customer satisfaction. The basic principles of Total Quality Management (TQM) for the SCOPE shop would be to satisfy the customer, satisfy the supplier, and continuously improve the business processes. (Nigel Slack, Stuart Chambers & Robert Johnston, 2004)
The first and most important TQM principle is to satisfy the customer, which is the person who pays for the product or service. Customers want the product or service they purchase to be worth the money they are paying. The customer should not only be satisfied by the quality of the product but also the customer service he receives. The cashier and the customer care individual in the Scope charity shop are volunteers and have no formal training. So, to improve the customer service, scope should introduce a two week training course for all the volunteers. To make sure that the items displayed in the shop are of good quality, the store manager and the assistant store manager should inspect the quality of all the donations when they are received, and only good-quality items should be displayed. At its core, Total Quality Management (TQM) is a management approach to long-term success through customer satisfaction.
The second TQM principle is to satisfy the supplier, which is the person or organization from which goods or services are purchased. The employees of the shop are internal suppliers because they supply services to the shop. The store manager should try to keep her workers happy and productive by providing good task instructions and good working conditions. They must also reward the workers with praise and good pay. Another way of satisfying the internal suppler is by empowering the workers. This means to allow them to make decisions on things that they can control. This will not only take the burden off the store manager, but it would also motivate these internal suppliers to do better work.#p#分页标题#e#
The third principle of TQM is continuous improvement. You can never be satisfied with the method used, because there always can be improvements. The competitors are always improving, so it is essential to strive to keep ahead of the game. Employees are frequently a source of continuous improvements. They can provide suggestions on how to improve a process and reduce unnecessary work. The store manager should continuously receive feedbacks from other employees.
Pareto Analysis 柏拉图分析
Since Quality is an important factor in the long run success of any business, it would be advantageous to the business to have methods by which quality could be measured. Many of these methods already exist and are called "quality-control" tools. Pareto Analysis can be described as the 80/20 rule applied to quality-control. The 80/20 rule was originally formalized by Vilifredo Pareto, after studying the distribution of wealth. He noticed that about 80% of wealth was held by about 20% of the population. Some years later, Joseph Juran applied this principle to quality-control, and Pareto Analysis was born. Pareto Analysis fundamentally states that 80% of quality problems in the end product or service are caused by 20% of the problems in the production or service processes. It is beneficial to separate "the vital few" problems from "the trivial many," and identify the individual problems that can be fixed and most significantly benefit the end product or service. Once these problems are identified, the 20% that are causing 80% of the problems can be addressed and worked on, thus efficiently obtaining quality.
By applying PARETO analysis to the Scope charity shop we can notice that the majority of the quality problems are caused because of the charities dependability on its donors. This should be taken as the starting point for problem solving. To counter this problem SCOPE charity shop should consider corporate tie-ups. If large corporations sponsor the charity the problems associated with the dependability on donors would significantly decrease.
Research Findings 研究结果
Primary data is the data which the researcher gathers through different methods like interviews, surveys, questionnaires etc. The advantage of primary data is that it is relatively cheap and no prior arrangements are required. Primary data is current and it can better give a realistic view to the researcher on the concerned topic.
The major disadvantage of primary data is that it has design problems like how to devise the surveys. The questions must be simple and generally understandable. Sometimes, the respondents might give phony, socially acceptable and sweet answers and try to hide the realities. (Saunders, Mark; Lewis, Philip; Thornhill, Adrian. 2007)
I conducted an investigation on the solutions suggested in this report via a structured interview of some of the people associated with the SCOPE charity shop. I interviewed a total of eight people, including the assistant store manager and the three volunteers, and four customers.#p#分页标题#e#
The first question asked was the relationship of the individual with the shop to distinguish between customers and employees. The second question asked was whether the employees would benefit from a training course. Out of the eight people who were asked this question, 75% answered yes to this question and 25% answered no. The volunteers working in the shop thought that this will not only benefit the shop but will also help them individually. Taking the results into consideration most people think that employee training would benefit the shop.
The third question was do you think empowering the employees would benefit the shop. Again eight people answered this question and a majority of 62.5% people thought that this would benefit the shop. In fact, the assistant store manager and the volunteers really seemed to have liked the idea and thought that this would really help the shop. But most of the customers thought that this might not be the ideal solution.
The fourth question asked was do you think corporate tie-ups would help the shop. A majority of 75% again answered yes. The customers were more open to this idea than the employees
The last question asked was about the launching of the online shop. Most respondents were unsure of the idea and said that they didn't know whether it would be a good idea or not.
These research findings indicate that most people associated with shop thought that these changes would present a step in a positive direction and would really improve the overall operations of the shop
Although the shop is doing a satisfactory job, there is still room for a lot of improvement and if the shop intends to survive in the long run, these changes will have to be implemented as soon as possible. These changes will also help the shop to gain competitive advantage and perform better than its competitors
Action Plan 行动计划
Action plan is a set of steps that must be taken, or activities that must be performed well, for a strategy to succeed. An action plan comprises of two major elements (1) Specific tasks: what will be done and by whom. (2) Time horizon: when will it be done? It is also called an action program.
Provide training to current employees(especially volunteers)
To improve the customer service and customer satisfaction. Will also improve overall quality in the shop
1 to 2 months
To raise more donations and to improve the quality of the donations
6 to 9 months
Empower the employees
To motivate the employees and to increase their commitment. This will also increase the overall quality within the shop.#p#分页标题#e#
2 to 3 months
Launch online shop
To increase the number of target customers and to gain a competitive advantage.
1 to 2 years
I would recommend the above suggestions to the top management of the SCOPE charity to improve the overall running of the SCOPE charity shop in Newport. These actions will not only improve the operations of the shop but will also help the shop in the long run. In addition, these improvements will give the scope shop advantage over their competitors. This can raise the level of sales and guarantee the long term survival of the charity shop. Corporate tie-ups and the launch of the online shop would also enhance the brand name of the shop which would result in increased customer loyalty.
I would also recommend to the top management that they apply Total Quality Management in the shop. Total Quality Management is about continuous improvement throughout the organization and will benefit the shop both in the long run and the short run.
The top management should also consider internet as a source of marketing and organizing charity events. Social forums can be used to create awareness among people regarding the purpose of the shop and they can also be used to raise donations for the operations of the charity shop.
In conclusion, the charity shop has a lot of potential to grow and if the right changes and improvements are made at the right time the charity can be successful in fulfilling its vision of 'A world where disabled people have the same opportunities to fulfil their life ambitions as non-disabled people.'