How Sainsburys Has Used Performance Management to Increase their Quality of Service

How Sainsburys Has Used Performance Management to Increase their Quality of Service

This report will show how Sainsburys have used performance management to increase their ability to provide a quality service and gain a competitive advantage, it will also show how systems have been implemented to achieve this and what Sainsburys have changed in recent years to achieve the competitive advantage it was looking for, The main area Sainsburys have changed is there Supply chain which had a cost gap of around £60 million. It will also look at how the operations functions carried out by Sainsburys can be linked in with other areas of the business like Finance, Human Resource Management and Marketing. The main contents of this report will be based on the theory about performance management; it will start with a section explaining what the theory is and how it is generally applied in business. It will also contain my own experiences and insight into how operations have had an effect from my own viewpoint. It will have a conclusion on how I believe my experiences of operations management has helped me and or hindered Sainsburys. There will also be a report conclusion showing how I think Sainsburys operations strategies have evolved over time.

Theory

This section will be looking at the theory which will be applied to Sainsburys and how it can be applied in this way. The main theories I will be looking at will be Capacity management, Open Systems, Quality Management, Performance Management and how Socio-technical Systems can be implemented into Sainsburys business.

Capacity Management

The meaning of capacity itself is being the ability to produce work in a given time, must be measured in the unit of work. There are three main types of Capacity management when looked at through operations. These are

• Potential Capacity

The capacity that can be made available to influence the planning of senior management (e.g. in helping them to make decisions about overall business growth, investment etc). This is essentially a long-term decision that does not influence day-to-day production management

• Immediate Capacity

The amount of production capacity that can be made available in the short-term. This is the maximum potential capacity - assuming that it is used productively

• Effective Capacity

An important concept. Not all produc...

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...y chain transformation, “the biggest project of its kind in Europe and one of the largest in the world”, was still out. A newspaper commentary summarized the concerns:

“The UK’s number two is meeting turnaround targets set by Sir Peter Davis, CEO, two years ago. But the complexity of Sainsbury’s regimen means its healthy overall financial appearance could disguise selective bingeing. Growth has still lagged behind that of market leader Tesco, and Tesco has a lower investment as a percentage of sales. Sainsbury is recovering from a disastrous patch in the late 1990s. It is on target to achieve the £700 million of cost savings promised by 2004, and margins seem to be creeping slowly towards its targeted 5.5%. But it can hide behind its cost savings while it buys time to demonstrate that improvements in the brand and supply chain will have a sustainable impact on its competitive position. They might. But investors need stronger sales momentum to give them comfort, especially as the market becomes more difficult and competitors such as ASDA continue to outperform. Until Sainsbury’s shows it is building up muscle - not just shedding fat - fitter rival Tesco deserves its 15% premium.”