Marks & Spencer Operations Management
The Company- A journey from cave to modern civilized societies, Marks and Spencer from a single market stall to a giant international multi-channel retailer has travelled over 129 years to establish its deep roots all over the world with 766 UK and 418 international stores.
Marks and Spencer stores are spread over 50 territories worldwide employing almost 82000 people. Marks and Spencer is a general retailer that sells clothes, gifts, home furnishings and foods. The UK turnover is split between Food (54%) and General Merchandise (46%). Marks and Spencer acknowledges the fact that consumer is the real king of market.
This can be drawn from its founding values which consist of Quality, Value, Service, Innovation and Trust; it also assures to work hard to ensure its offer continues to be relevant to its customers.
The vision and mission of the company is to be the standard against which others are measured and to make aspirational quality accessible to all. This suggests that ‘Quality’ is at the heart of Marks and Spencer’s operations strategy (Marks and Spencer, 2013).
International Expansion: M&S has a clear and targeted strategy for its international growth. Henceforth it continues to build more new stores to expand in key locations across its priority markets, employing a mix of ownership models including partnerships and franchises (Marks and Spencer, 2013). Operations Strategy- An Overview-
Operations Strategy Perspective: The operations activities are aimed to achieve operations strategy of the business. Marks and Spencer’s operations management activities ensure that all its products are of high quality and the stores are located in the most convenient locations.
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This reflects that the operations strategy of Marks and Spencer is of a ‘top-down’ perspective where the business wants its operations to provide quality products with an easy access to all. The Top-down Strategy Hierarchy: Corporate Strategy: M&S aims to be the world’s most sustainable retailer.
Its eco and ethical programme, is at the very heart of how they do business. M&S also aims to be a truly international, multi-channel retailer which can be accessible to even more customers around the globe (Marks and Spencer, 2013). Business Strategy: M&S is reaching more customers across the new and existing markets through its online development. In order to dominate the competition, M&S has facilitated its customers with ‘free next day delivery’ to its stores. Moreover, M&S has also developed i-phone application to carry out its sales via mobile phones.
M&S has also encouraged the online sales to make it more convenient for its customers to shop with them (Marks and Spencer, 2013). Functional Strategy: Improved navigation, greater choice, exclusive ranges and offers have boosted the online sales by 16. 6% in 2013. The recent performance of the technology depicts that i-phone application has increased the sales via mobile phones by 200% this year. To carry out its operations efficiently, M&S has developed a fully mechanised 900,000 square feet e-commerce distribution centre which is the UK’s largest.
It has the capacity to process and ship up to a million products per week to customers’ homes and M&S stores across the country (Marks and Spencer, 2013). Store Layout: M&S has revamped its visual merchandising and window displays to do a better job of showcasing its products. The different fashion brand such as Per Una, Autograph, Indigo, Classic, North Coast, Blue Harbour, Cellezione and its core M&S Man and Woman will have dedicated ‘shop in shop’ area so that the in-store environment communicates each brand’s distinctive values.
In the food department, M&S has refreshed the shelving with wood effect shelf edges to look less like a supermarket and more like a specialist (Baker, 2011). M&S store is therefore a mix of functional and fixed position layout type where general merchandise and food department operates in a functional layout type and the restaurant being the fixed position layout type. Technology: M&S understands the growing importance and contribution of strong IT function to operate efficiently in the multi channel world.
The role of technology is changing at M&S and as a result changing the company itself. Marks & Spencer rolls out ePLUM Enterprise Scale Manager from Invatron Systems Corp. to 37 of its European stores to centrally manage its in-store deli and bakery department scales. ePLUM Enterprise Scale Manager is a multi- vendor, multilingual, web- enabled solution that provides retailers with centralized control of in- store scales and printers accessible from any computer in the enterprise; this makes the operations much efficient and fast (Anon. , 2013).
The internal team of software engineers of the company are developing new IT driven customer innovation projects that include 156 screens dubbed ‘Browse and Order’ – in store terminals where customers can buy M&S’s entire online range across 63 stores. Moreover, M&S has equipped 1500 customer assistants with i-pads to enable them to demonstrate to the customers, the store’s full range of the products, its availability and its sizes. The client- facing technology of M&S includes virtual makeover counters, which allow customers to see how they would look on applying certain beauty products.
On developing bid data strategy, M&S will be able to drive its profitability and improve marketing and promotions by using data insights smartly. This technology will enable M&S to send specific e-mails regarding promotions and offers to its customers based on their purchase history rather than sending bulk e-mails to all its customers which is of no relevance (Stein, 2013). All these advancements by the IT team of M&S are aimed at encouraging customers to use technology to spend more money at M&S. Supply Chain Management:
It is very crucial for every business to have a strong supply chain network in order to satisfy its customers before the competitors do. M&S though being one of the UK’s largest retailers is criticised by its Finance Director, Alan Stewart for under investing infrastructure for upwards of 20 years. He further adds that the way the company buys and distributes its clothing is inappropriate. Shoppers may be looking for the latest looks and demanding new ideas in stores and online every few weeks, but M&S takes two to three weeks just to transport goods from UK ports to its stores.
This is where M&S is losing its competitive edge in the market because the other retailers have hi-tech systems to track stock. For example, one of the rival retailers, H&M boasts that it can get designs from the drawing board to the store in a fortnight, while M&S takes longer than that just to get its merchandise from the ports to its shops (Butler, 2013). For the businesses like M&S where the life span of a product is very short- clothes due to change in fashion and food due to expiry, the business must develop strong bonds and ties with its suppliers.
In order to increase the ability to respond quickly to the ever changing needs of customers, Marks and Spencer should work closely with its suppliers and integrate the supply chain so that both Marks and Spencer and its suppliers are working towards the same business objectives. Hence, there will be a win – win situation for both M&S and its suppliers which will increase the operations efficiency and enable them meeting the market requirements on time. Logistics: Gist has a long history providing logistic operations for Marks and Spencer.
Gist manages 100% of the storage and distribution of Marks and Spencer food products to their 700 plus stores, 24 hours a day and 7 day a week. Warehouses across the UK are operated by Gist employees who receive and pick store orders and then distribute to Marks and Spencer stores, including Simply Food, throughout the UK and Ireland, covering all their high street, forecourt and out-of-town stores (Gist, 2013). Outsourcing its storage and distribution would make Marks and Spencer’s logistics much faster and this will increase its efficiency in delivery to customers, increased sales and high customer satisfaction.
Inventory Management: Inventory planning and control is an important aspect of operations management. In a market, customers demand certain quantity of products and services at a particular time. The role of operations is to supply and deliver the required quantity of products and services when demanded. Marks and Spencer in February 2013 was caught of having shortage in the stock of winter coats and woollens due to cold snap. The Chief Executive of M&S, Marc Bolland said that M&S sold 100,000 cardigans and jumpers from its core M&S Woman collection in the fourth quarter but could have sold three times that number.
Bolland insisted that the weakness was not down to having wrong fashions in its shops but there was just not enough stock of the right ones. The majority of M&S’s knitwear is being made in Asia. Therefore, M&S was unable to repeat orders fast enough and thus failed to meet the market demand (Wood, 2012). The above instance demonstrates the importance of demand forecasting in managing the inventory which was missing in this case. In a multi-echelon inventory system, effective communication between the different echelons is of high importance to deliver the products at a rapid pace.
M&S could have succeeded in minimising some of its losses had there been more flexibility in the supply chain and latest requirement updates in the inventories. M&S Inventory and Technology: Marks and Spencer has chosen Quantum Retail technology, ‘Q’ to improve inventory management. This technology is able to forecast and make inventory decisions in real time while considering both inter-day and intra-day stocking. Quantum Retail’s software solution, Q manages the end-to-end inventory forecasting, replenishment and order planning needs (Quantum Retail, 2010).
Quality Management: M&S operates rigorous Quality Management Systems which have been developed with its suppliers. To ensure total quality, the systems operate on a precautionary principle and are supported by a range of on-site audits and product testing. Further, M&S also ensures that its suppliers meet a range of quality, safety, environmental and social standards (Marks and Spencer, 2013). M&S is renowned for its ‘quality and innovation’ and is often appraised by its customers for providing quality worth every penny spent at M&S.
The customers expect the best from M&S products but recently, M&S was in headlines for selling low quality and cheap clothing products. Fashion watchers, rivals and its customers insisted M&S to abandon this practice. One of the rival retailers suggested M&S that it should be aiming to be a premium brand rather than trying to compete on price (Watkins, at el. 2013). The company should stick to its set objectives and design its day to day operations in such a way that it leads to achieving its long term goals. The mission of the company is to provide aspirational quality that is available to all.
The above discussed case is a clear case of M&S’s deviation from its long term goals. To rectify this error, M&S should rediscuss its company objectives and strategies with its suppliers to ensure guaranteed and rapid recovery. Plan A and Sustainable Operations: M&S aims to become the world’s most sustainable retailer. Its eco and ethical programme is at the very heart of how M&S carries out its business. M&S claims to make its business sustainable by integrating Plan A into every aspect of its operations- including the products that they evelop and sell, the stores that they rebuild or refit and the way they work with their suppliers and engage its employees. Plan A’s success lies in its innovative thinking and ideas. With the help of Plan A Innovation Fund, M&S has launched a number of promising projects. These projects include ideas for developing more sustainable clothing fabrics, original thinking about ways to improve labour standards in their supply chains and a joint project with the Natural Environment Research Council to improve the way they share knowledge and work with its suppliers (Marks and Spencer, 2013).
Plan A Activities: CO2 Neutral – M&S is proud to be certified as CarbonNuetral ® Company across its operations in the UK and Republic of Ireland. M&S also encourages its suppliers to reduce the greenhouse gas emission through actively developing various programmes aimed at this (Marks and Spencer, 2013). Zero Waste to Landfill – Besides this, M&S continue to work for reducing the amount of waste produced within its business. M&S successfully fulfilled its commitment of sending no waste to landfill from its UK stores, offices, warehouses and construction activities (Marks and Spencer, 2013).
Corporate Social Responsibilities: The Britain’s retailer has always cared about environment and society. M&S knows that many of its customers as well do care about the environmental and social issues. So, it is of no surprise that M&S customers donated a total of 3. 8 million clothes items through its Shwopping Scheme which raised ? 2. 3 million for Oxfam (Marks and Spencer, 2013). CSR activities at M&S: Breakthrough Breast Cancer: The Company also carried out campaigns for raising money for Breast Cancer donations. M&S has now generated ? 9 million for Breakthrough Breast Cancer in 12 years (Marks and Spencer, 2013). Big Beach clean – up: In April 2013, around 5000 customers and 4000 M&S employees worked with the Marine Conservation Society at over 160 beaches, riversides and canals, cleaning, clearing enough rubbish to fill 4000 recycle bin bags (Marks and Spencer, 2013). These activities suggest that M&S has always taken very hands on approach towards its corporate social responsibilities. Recommendations: Customer Satisfaction – It is very necessary for Marks and Spencer to maintain high quality standards in all their products.
The prices of the M&S products are usually higher than that of its rival companies such as Tesco’s and Sainsbury’s in food and Primark and Debenhams in clothing. Therefore, M&S needs to ensure that all its products are of high quality because their customers are paying that extra amount in hope that the products will be of a better quality than other rival retailers. The hidden benefit for M&S satisfying its customers is reduced complaints and therefore less service costs of paying an employee to find out the cause of the issue and fix it.
This will increase customers’ loyalty towards M&S which would lead to positive word of mouth publicity to the potential customers. Supplier Satisfaction: It is M&S’s best interests to keep their suppliers happy by paying them enough and on time. This would make its suppliers feel like a part of M&S and would be encouraged to work keeping in mind the needs and objectives of M&S. By working more closely with its suppliers, M&S can ensure that their products are of great quality standards are delivered on time with no or less troubles.
Word Count: 2431 References: * M&S, 2013. Company Overview. [online]Available at: <http://corporate. marksandspencer. com/aboutus/company_overview> [Accessed 03 July 2013]. * M&S, 2013. Our Plan. [online] Available at: <http://corporate. marksandspencer. com/aboutus/our_plan> [Accessed 03 July 2013]. * Baker, R. , 2011. Marketing Week, M&S outlines new store strategy for brands, [online] Available at: <http://www. marketingweek. co. uk/ms-outlines-new-store-strategy-for-brands/3030044. article> [Accessed 03 July 2013]. Anon. , 2013. Marks & Spencer rolls out ePLUM Enterprise Scale Manager from Invatron Systems Corp. to 37 of its European stores. Invantron Systems Corp. , [blog] 2013, Available at: <http://www. invatron. com/blog/main/press-releases/marks-spencer-rolls-out-eplum-enterprise-scale-manager-from-invatron-systems-corp-to-37-of-its-european-stores/> [Accessed 03 July 2013]. * Stein, D. , 2013. CIO Interview: Darrel Stein, IT director, Marks and Spencer Interviewed by Angelica Mari , [online] on Computer Weekly.
Available at: <http://www. computerweekly. com/news/2240179873/CIO-interview-Darrell-Stein-IT-director-Marks-and-Spencer> , 20 March 2013, 17:15. * Butler, S. , 2013. M&S boss under pressure amid race to upgrade supply chain. The Guardian, [online] 10 May 2013. Available at: <http://www. guardian. co. uk/business/2013/may/10/marks-and-spencer-marc-bolland-technology> [Accessed 03 July 2013]. * Gist, 2011. Marks and Spencer Excellence in food logistics. [online] Available at: <http://www. gistworld. om/en-gb/customers/case-studies/marks-spencer/> [Accessed 03 July 2013]. * Wood, Z. , 2012. M&S admits womenswear stock shortages hit sales. The Guardian, [online] 17 April 2012. Available at: <http://www. guardian. co. uk/business/2012/apr/17/marks-spencer-womenswear-stock-shortages> [Accessed 03 July 2013]. * Quantum Retail, 2010. Marks & Spencer Selects Quantum Retail to Improve Inventory Management. [online] Available at: < http://quantumretail. com/2010/01/05/marks-spencer-selects-quantum-retail-to-i
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