A Report on Operations Management Process at Melrose UK

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EXECUTIVE SUMMARY

Melrose is one of the popular manufacturing company offering flooring and rug products within
the markets of United Kingdom. Melrose has biggest chain of suppliers, dealers, manufactures
and agents to supply their rug floor products to the customers across the UK markets. Melrose
Company uses three major processes in order to reach their customers and has direct outlets in
UK, offers online order services and email orders. With the presence of huge number of supplier
and dealer relationships, the operations management process and supply chain activities has
greater efficacy within Melrose Company.

Melrose uses CIF and FOB shipment channels in order to supply their products to the customers
bulkily. For the purpose of expanding their business activities into different markets and reaching
their target customers from different geographic locations Melrose is using the operations
management process as key tool. Within this paper, the critical discussions will be involved with
regards to the key operations management activities of Melrose. The other side of the paper deals
with the operations management strategies being adopted by the company to satisfy the
customers and get competitive advantages among the competitor companies.

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Contents
ANALYSIS .................................................................................................................................... 5

Principle Operation Tasks At Melrose ....................................................................................... 5

Organization Environment of Melrose:....................................................................................... 5

Supply Chain Activities at Melrose: ........................................................................................ 6

Order processing at Melrose: ................................................................................................... 7

Warehousing at Melrose: ......................................................................................................... 7

Inventory control and management: ........................................................................................ 8

Transportation at Melrose:....................................................................................................... 8

Information monitoring at Melrose: ........................................................................................ 8

Process Strategies at Melrose ....................................................................................................... 9

Performance Objectives and Polar Dimension of Melrose: ........................................................ 9

Quality Analysis of Melrose: ................................................................................................... 9

Dependability at Melrose: ..................................................................................................... 10

Flexibility at Melrose: ........................................................................................................... 11

Speed at Melrose: .................................................................................................................. 11

Costs at Melrose: ................................................................................................................... 12

Four V’s Dimensions of Melrose Company: ............................................................................ 12

Volume Dimension of Melrose: ............................................................................................ 12

Variety Dimension of Melrose: ............................................................................................. 13

Variation in Demand Dimension of Melrose: ....................................................................... 14

Visibility Dimension of Melrose: .......................................................................................... 15

Throughput Operations at Melrose Company ........................................................................... 15

CONCLUSION OF THE STUDY ............................................................................................. 16

Recommendations to Melrose .................................................................................................... 16

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REFERENCES OF THE STUDY ............................................................................................. 18

Figure 1: Key activities of Operations Management ...................................................................... 5

Figure 2: Operational Transformation of Melrose .......................................................................... 6
Figure 3: Performance Polar of Melrose ....................................................................................... 10
Figure 4: Statistics proving Dependability at Melrose ................................................................. 11
Figure 5: Volume of products and services at Melrose ................................................................ 13
Figure 6: 4V's of Melrose ............................................................................................................. 14

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ANALYSIS

Principle Operation Tasks At Melrose

Organization Environment of Melrose:

As per the views of Melrose Repot (2013) Melrose is a famous retailer company that offers
flooring products and rug products to the customers and has three target customers like hospitals,
homes, as well as the hotels. The core business operational objective of Melrose is to become a
leader company in UK markets. In general, the operations management is considered to be a
process used to convert different business resources of the organization into different services
and products. The key implementation of operations management process is to support the
companies to design, manage and execute different business activities of the company using
effective strategies. There are few key activities within the operations management process of the
company such as supply chain management, logistics operations, the warehousing, inventory
control, and the transportation services (Melrose Repot, 2013)

Figure 1: Key activities of Operations Management

Reference: http://stratexone.com/consulting/operations-management/

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Operational Transformation Process of Melrose:

Figure 2: Operational Transformation of Melrose

Reference: Own Model

Melrose has made the supply chain management in all countries and followed different programs
based in the local areas. The important orders and timely supply of the products are main
purpose of the Melrose and based on the Supportive operations of WMS and hired various
intelligent people to start the important supportive operations. The IT systems has been used like
the RF readers, barcode scanners and many complex software combined to the supportive
operations and practiced the supply of products in right manner. The near observation is made in
the supply of products and taken the orders from the third party model for providing better
products and fast supply to the customers (Lehner, 2010).

Supply Chain Activities at Melrose:

According to the views of Qiang et al. (2010) in general, there are four major activities involved
in the supply chain activities of Melrose such as order processing, warehousing, inventory,
transportation and information monitoring that is being explained in detail as follows:

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Order processing at Melrose:
The first step in the physical distribution of goods and services is managing the customer orders.
One of the primary tasks of the order processing unit is to collect the customer orders and close
them in a stipulated time by providing efficient services to fulfill the requirements of the
customer. Melrose has broken down the activity of order processing into sub-activities like
receiving the orders, notifying the order, closing the order and finally delivery of the using an
efficient mode of transportation. Order processing is an important function in the logistics
management process. Only if the order processing is carried out in the designated way will the
logistics procedure of that organization be successful in the market (Braunscheidel, 2009).

The goods and products of Melrose will reach the customers in time within a single day after
confirming the orders. In answer to the customer orders, if a defective or below par product is
provided, the said product will be duly returned and there will be a detrimental effect on the
balance sheet and profit-loss account of the company. This will be in addition to the loss of
reputation and goodwill that the company will suffer. On time product delivery is the hallmark of
Melrose Company. Today, customers place a lot of emphasis on timely and qualitative delivery
of their orders, which if not done, will result in return of the products or legal action from the
customers (Qiang et al. 2010)

Warehousing at Melrose:
Russel (2009) stated that the warehousing is the act of storing and classifying the goods or
products for their efficient and timely supply. This stage in the logistics management process of
Melrose comprises gathering the goods or products at a demarcated location and storing them
there, either at the same location as the existing goods or at a new location. It also includes
sorting them as per the orders of the customers. Melrose has highest number of warehouses in
order to store their products and goods for order delivery. This is because by establishing
warehouses at various locations Melrose is cutting down not only their conveyance costs but also
the lead times for the products. Although this becomes expensive upfront, but in the long term it
impacts the bottom line to Melrose. With more number of warehouses, Melrose can store more
number of different products and also serve a wider area (Russel, 2009).

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Inventory control and management:
Chopra (2010) opined that the process of inventory control is not too different from the
warehousing process, but it also includes physical distribution of goods and products. The
inventory control process of Melrose involves the important decision of maintaining adequate
inventory levels of products and services based on the demand for those products and services. It
also involves controlling the costs of holding inventory. Analysis of customer demand for
products and services, ascertaining the accuracy of the predicted sales figures and physical
storing of the stipulated quantity of products or services happen to be the hallmark of an efficient
inventory control system. The cost of inventory control includes the process of setting up
warehouses at designated locations and also maintaining a designated level of inventory stock in
the warehouses of Melrose (Chopra, 2010).

Transportation at Melrose:
In views of Johnston (2009) the transportation is the process of moving goods and services from
the location of manufacture/storage to the point of delivery i.e. the customer location, in a
specified time. An efficient transportation system of Melrose formed as the backbone of supply
chain activities of Melrose. Melrose strongly believes that a good transportation system not only
ensures timely delivery but also provides the benefit of reducing costs by limiting damages in
transit of goods and services. Melrose has number of modes of transportation resources to carry
the goods and services to the customer location namely road transport, railway, waterway and
finally airway. Depending upon the order value and the location of the customer, an efficient
mode of transport is selected and used by Melrose to offer timely and qualitative delivery of
goods and services (Johnston, 2009).

Information monitoring at Melrose:

Slack (2010) stated that the functions of a logistics manager is to monitor the whole process of
logistics right from the receiving of the order from the customer up to timely delivery of the
products or services. The managers of Melrose keeps them self abreast of any information
related to this process, whether it is the stock levels to be maintained, location of the customer,
quantum of his order, value of the order, lead time specified, mode of transport, etc. . The
managers of Melrose monitors and manages the key elements of operations management
activities of Melrose like order processing, warehousing, inventory control, physical distribution,

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and transportation of the goods and services. Melrose has effective management that is capable
of monitoring this whole process to reduce costs, maintain quality, and meet delivery timelines.

Process Strategies at Melrose

Performance Objectives and Polar Dimension of Melrose:

Stevenson (2010) stated that the performance objectives and polar dimension of Melrose is
explained in detail as follows:

Quality Analysis of Melrose:

Krajewski (2010) opined that in general, quality is the key attribute that plays a pivotal role in
the overall success of the organizations. The main aim of Melrose is to offer a right product to
the right person in a right time. The quality of the products has greater influence on the buying
behavior of the customers and shows adverse impact on the product success or failure. Especially
the quality plays a key role in the consumer durable industry like Melrose that initiates the
customers to indentify the service levels of the companies based on the product quality offered.

Melrose main purpose is to offer flooring products that keeps away the customers from different
diseases. In these circumstances, there is a huge necessity to Melrose to offer quality based
products to that customers. The quality is the only aspect that can be considered as the core
competitive edge and competence for Melrose. Even though there are many local competitor
companies competing with Melrose, the company used quality as the core competence to get
competitive advantages among the competitor companies (Stevenson. 2010).

The important distribution outlets of Melrose are found in wider markets of UK with the staff of
600 members. The important supportive operations are performed from the place and provide
huge variety of quality oriented products and also operations to initiate the supportive operations.
The company has managed the segregation of refrigerated and frozen products and follows the
supportive operations to make the management better. Melrose is providing the huge variety of
supply chain operation sand consists of packed items, bulk items, the temperature controlled
items and various supportive operations (Krajewski, 2010).

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Figure 3: Performance Polar of Melrose

Source: Own Model

Dependability at Melrose:
The dependability ratio of the customers towards the Melrose products was high when compared
with other flooring companies. Especially the service availability at Melrose Company including
their timely delivery services maximized the dependability ratio of the customers towards
Melrose (Qiang, 2012).

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Figure 4: Statistics proving Dependability at Melrose

Source: http://www.melroseplc.net/about-us/track-record/

Flexibility at Melrose:
Melrose is highly successful within UK markets in offering effective flooring products to the
customers and has good customer loyalty factors with regards to their business operations. The
products and services offered by Melrose are flexible to adopt and use. The flexibility in ordering
products, delivering products, and using the products increased the reputation of Melrose within
the markets of UK. The other supply chain operations offered by Melrose are temperature
controlled products, bulk products and packed products and there several supportive operations
that are to be followed in the organization (Slack, 2010).

Speed at Melrose:
Summers (2009) stated that the speedy services and the fastest online delivery services to the
customers are considered to be a core competitive edge of Melrose. In order to reach their target
customers from different geographic locations of the market, Melrose used all available
resources to reach them. Melrose offers speedy delivery services using physical outlet bookings,
online bookings, and the email bookings.

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Costs at Melrose:
The costs are considered to be other key factors that play a pivotal role in the success or failure
of organizational products. Melrose is offering cost effective services to their customers that are
flexible to all categories of the customers. Alongside, Melrose faced some challenges with the
competitors for cost reduction of their products, but Melrose strongly believes that the products
offered by Melrose cost effective (Krajewski, 2010).

Four V’s Dimensions of Melrose Company:

According to the views of Nagurney (2010) the 4V’s volume, variety, variation and the visibility
of Melrose are explained clearly as follows:

Volume Dimension of Melrose:

In general, the volume is considered to be a process that defines the level rate of the product or
service output that determines its behavior. The volume of products and services of Melrose has
two major categories like floor products and rug products. There are huge volumes of categories
of floor products offered at Melrose and even there are different volumes of rug products offered
at Melrose (YU, 2010).

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Figure 5: Volume of products and services at Melrose

Source: Own Model

The above figure gives a clear idea on the volume of products and services and the business
activities followed at Melrose.

Variety Dimension of Melrose:

The variety dimension is defined as the process that differentiates the company products and
services from the competitor companies. This dimension plays a key role within the overall
success of the products or services and reinforces the companies in getting competitive
advantages. In general, every company operating in different sectors of the market has their own
products and services, but only few companies are successful in offering variety of products and
services to the customers that in turn gives competitive benefits to the companies. Similarly,
Melrose of offering different varieties of rug products, as well as the flooring products that is not

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being offered by other companies. The on-time delivery services with cost effective products and
having vast range of varieties is considered to be the core variety competence of Melrose
(Gaebler, 2012).

Figure 6: 4V's of Melrose

Reference: Own Model

Variation in Demand Dimension of Melrose:

Johnston (2009) stated that the variation in demand is other key dimension in four V’s of
operations management process and it has greater influence up on the organizational
productivity. The variation degree of rate or level entirely depends on the product or service
demand in the current markets. For instance, flooring products are highly essential in hospitals
and hotels which are not much importance within regular organizations. The variation in demand
will always be low among the companies because the variation within the products or services
take place based on the consumer behavior.

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Visibility Dimension of Melrose:
Chopra (2010) stated that in general, the visibility dimension is a key part in the organization
because it initiates the companies to contact and communicate with their customers regularly.
Melrose is visible in both online and offline medium. Melrose products are available to the
customers directly and indirectly. By using the offline medium resources like physical stores and
outlets Melrose is offering many products and services to the customers. On the other hand, by
using the online resources like website orders and online orders, Melrose is making its online
visibility to promote and sell their problems.

Throughput Operations at Melrose Company

As per the views of Gaebler (2012) the throughput in operations management activities is being
calculated using a little law theory that is explained below:

WIP Inventory = the throughput x flow time

The above equation is known as Little’s law proposed by John. D.C. Litter in 11961 in order to
prove the flow rate of the orders processed by the companies. In order to indentify and analyze
the current throughput of business operations of Melrose, the actual series of activities are being
calculated using slowest throughput rate and this process is referred to as bottleneck process. The
identification and implementation of bottle neck process plays a pivotal role in identifying the
operational capacity of the company. The throughput rate of Melrose is explained in detail as
follows:

Time Saving (On-time delivery) = Customer satisfaction+ Competitive benefits

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CONCLUSION OF THE STUDY
Within this paper, researcher explored information about the core activities involved in the
operations management activities of Melrose. In this paper, Melrose a popular UK based flooring
products company is being taken into consideration as Case Study Company. Researcher gave a
brief note on core operations management activities of Melrose. The supply chain management
activities, inventory control activities, order management activities of Melrose are being
discussed. The stronger side of the paper justifies the performance evaluation process of Melrose
that explains the performance management objectives of Melrose. The 4V’s of Melrose are even
discussed in the paper to give a clear idea on the core competences of Melrose when compared
with its competitor companies. The throughput operations of Melrose are even discussed in the
paper. The critical evaluation carried out on operations management activities of Melrose proved
that the company is highly successful in managing and maintaining its supply chain and
operations management activities. When the case with Resources is considered, the main
resources of Carrefour are their supply chain and logistic strategies.

The final conclusion of the paper was that even though Melrose is highly successful in managing
and maintaining its operations management activities successfully still it is facing problems in
leading the consumer market of UK. The major problem was related to transportation services
because Melrose main target is to offer timely services to the customers. But with this process,
Melrose is giving hard work tasks to the employees working in operations management and
supply chain department of the company leading to many human resource issues among the
company. In the recent times Melrose is facing challenges in managing their human resources
that has shown major impact on the operational productivity of the company.

Recommendations to Melrose
In order to overcome the above mentioned problems Melrose should follow below mentioned
strategies that retain them in managing and overcoming their current issues that are explained in
detail as follows:

 Firstly, with the critical evaluation carried out in the study it has been proved that though
Melrose is offering cost effective products and services still it faced cost reduction
demand from its competitors, in order to overcome this problem, Melrose should try to

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 reduce current costs of their products and maintain same quality to attract more
customers that in turn gives many competitive advantages to the company
 Secondly Melrose should implement effective employee retention and motivation
strategies in their company that allows them to identify the issues faced by their
employees. Melrose should identify that the satisfied employees yield more productivity
and for this reason, they should offer required motivation and support for better
organizational and operational productivity.

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REFERENCES OF THE STUDY
1. Braunscheidel, M. J., & Suresh, N. C. (2009). The organizational antecedents of a firm’s
supply chain agility for risk mitigation and response. Journal of Operations
Management, 27: 119-140.

2. Lehner, F., & Haas, N. (2010). Knowledge management success factors- Proposal of an
empirical research. Electronic Journal of Knowledge Management 8(1): 79-90.

3. Russel, R.S. &Taylor, B.W. (2009). Operations Management: Along the supply chain, 6th
edn, John Wiley& Sons Ltd, NewYork.
4. Q. Qiang, A. Nagurney, and J. Dong (2009)“Modeling of Supply Chain Risk Under
Disruptions with Performance Measurement and Robustness Analysis,” in Managing
Supply Chain Risk and Vulnerability: Tools and Methods for Supply Chain Decision
Makers, T. Wu and J. Blackhurst, Editors, Springer, London, England, pp 91-111.
5. Melrose Report (2013). About Melrose. Available at: www.melrose.com. Last Accessed:
Aug-1st-2014.
6. I S. Chopra and P. Meindl (2010) Supply Chain Management: Strategy, Planning, and
Operations, 4th edition, Prentice-Hall, Upper Saddle River, New Jersey.
7. I W. Stevenson and M. Hojati (2011) Operations Management, 4th Canadian edition,
McGraw-Hall Ryerson, Toronto.
8. Krajewski, L.J;Ritzman, L.P.Malhotra, M.K (2010). Operations Management: Process
and Supply Chain, 9th edn, Pearson Education, New Jersey
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Education Limited, Harlow.
10. Summers, MR (2009), Analyzing operations in business: Issues, tools, and techniques,
Quorum Books, Westport, CT.
11. Johnston, R. and Clark, G. (2009) Service Operations Management (3rd edn), Financial
Times-Prentice Hall, Harlow.
12. Q. Qiang and A. Nagurney (2012) “A Bi-Criteria Measure to Assess Supply Chain
Network Performance for Critical Needs Under Capacity and Demand Disruptions,”
Transportation Research A 46, pp 801-812.

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 13. I A. Nagurney (2012) “Supply Chains and Transportation Networks,” in the Handbook of
Regional Science, M. M. Fischer and P. Nijkamp, Editors, Springer, Berlin, Germany, in
press.
14. I A. Nagurney and M. Yu (2012) “Sustainable Fashion Supply Chain Management Under
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Production Economics 135, Special Issue on Green Manufacturing and Distribution in
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2011. http://www.gaebler.com/Inventory-Management.htm. Last Accessed: Aug-1st-
2014.

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