Carrefour Department Store’s Operational Efficiency

Executive Summary

In the business environment, sustainable business operation is influenced by powers in the business sector, choice science, corporate structure, and genuine financial related administration. Along these lines, a business must put set up stringent measures and systems pointed at observing expansionary modules inside attainable levels. In particular, this paper reviews the quantitative examination of value and supportability perspectives as identified with Carrefour Department Store, which has existed for more than two decades in Abu Dhabi as a leader in the retail supermarket business.

The apparent challenge identified as crippling the store’s operational efficiency is long delays in timely customer services since many clients often complain of waiting for such a long time before being served due to long queues. The paper proposes the addition of a cashier in each of the food, bakery, clothing, and electronics sections to reduce the waiting time before service by approximately 20%.

The reduced waiting time translates into efficiency in service delivery and increased customer satisfaction. Although the addition of four cashiers will increase the cost of labor, the ripple effect will be increased sales as customers will prefer the store for its efficient and timely service module. Besides, this proposal is likely to reduce the workload and pressure that the current twenty cashiers are experiencing since the labor force will increase by four.

Introduction

Headquartered in France, the Carrefour Department Store in Abu Dhabi is a subsidiary of the Carrefour S.A., which was established fifty-eight years ago. The Carrefour Department Store is a very successful supermarket store that serves more than three thousand customers in a day. The store is arranged into four departments to pool goods with similar purchasing trends. The departments are Bakery, Food and Groceries, Clothing, and Electronics.

These four departments are served by 20 cashiers besides an extra cashier in the special service line that serves customers who purchase less than ten items. The store is associated with providing a variety of products all under one roof at very competitive pricing. The Carrefour Department Store is well positioned within the external environment as a result of diverse products, high economies of scale due to a large number of customers, and a well-developed supply chain channel. However, the suppliers have very high power because most of the goods sold in the supermarket originate from independent suppliers. The supermarket also faces the challenge of competition from many stores and mall retailing the same goods and services.

From the analysis, it is apparent that the Carrefour Department Store offers very affordable and competitive pricing for the products it retails. Besides, the store has a well-structured service charter that stresses quality and timely service. However, the Carrefour Department Store is currently faced with poor service delivery due to an imbalance between the workforce and the number of customers. Apparently, the current number of cashiers is not enough to serve customers promptly. Therefore, there is a need to remodel the current operations management in service delivery to increase the continuum value of service delivery.

Organization Service OM Analysis

The Carrefour Department Store functions on the pillar of the total quality management system. The supermarket is proactive in safeguarding assets and resources, sustaining efficiency in operations, and ensuring completeness in the management strategies. These strategies support communicational culture, efficiency, and optimal resource use in its service delivery to customers (Escrig-Tena, Bou-Llusar, Beltran, & Roca-Puig, 2011).

The business has integrated a corporate disclosure and system of litigation variables which are connected at a central point by strategic planning. The flexible service approach adopted by the Carrefour Department Store is comprehensive of the exploratory perspectives, for example, the specialized procedure of comprehension of the operations and legitimate utilization of measurable devices. These devices are basic in checking and dealing with the logistics behind the business capacities (Witcher & Chau, 2010).

Current Supply Chain Processes

Effectiveness in the inventory network is extremely basic in the circles of value affirmation as a component of an organization’s operations administration procedure. The Carrefour Department Store has an automated supply chain framework, which guarantees a smooth stream in the production model from inputs procurement to conveyance of products in the stores (Witcher & Chau, 2010).

The framework has an adaptable module that adjusts the control channels, structure, and extension to guarantee manageability. With a specific end goal to accomplish a reasonable level of productivity, the parts of cost, steadfastness, quality, and adaptability are consolidated through value addition, delivery, and constant creativity in managing the global supply chain (Escrig-Tena et al., 2011). The business model of the Carrefour Department Store is managed like a corporation with different interests in the food, clothing, electronics, and bakery products as summarized in the flow chart below.

The supermarket’s flow chart
Fig.1: The supermarket’s flow chart

Current Operation Processes

Skills required in supporting a business strategy plan are found in the Carrefour Department Store operation management model, which functions as an implementer and driver of business decisions. The variables are connected at a central point by strategic planning which encompasses cost, flexibility, and dependability to create a smooth continuous operation tracking model that operates like a computer from one segment to another (Escrig-Tena et al., 2011).

Besides, the topological structure of the Carrefour Department Store consists of communication and operations management systems which help in determining efficient performance and optimal resource use. The continuum of increasing the value of quality in operations lies in constant training, strategic planning, and employee motivation at the Carrefour Department Store (Escrig-Tena et al., 2011). This is summarized in the diagram below.

Variables in the service description.
Figure1. Variables in the service description.

OM Activities Details

The OM activities strategies of the Carrefour Department Store are to ensure long-term and sustainable operations. For the implementation of the strategy, the management balances both the short-term and long-term consideration towards decision making (Escrig-Tena et al., 2011). Management that ensures long term obligations is fulfilled. They consider the role played by planning for resources in technology, continued innovations in the production of new products, and conducting researches in the market to identify market niches within the customers (Witcher & Chau, 2010).

For instance, the long-term expansion and further market penetration have been integrated through a series of beneficial partnerships, performance evaluation, and proactive innovation in the services to meet the demands of its diverse customers. Although operations management systems experience constant metamorphosis as a result of short-term, mid-term, and long-term goal planning, the store cannot operate efficiently without quality system functioning (Witcher & Chau, 2010). Thus, quality system functionality is used at the store to quantify optimal functional within a competitive advantage parameter.

At the Carrefour Department Store, there are systems in place to measure success as a component of the existing operational structure. Generally, this quality operations management system satisfies requirements within the budget and schedule without disintegrating the initial goal projections. However, the current changes in the weights of labor cost and operating costs have substantially altered the final weighted average rating for the store (Escrig-Tena et al., 2011).

The quality operations management system performs optimally via the integration of appropriate scientific factors of production. To enrich artistic managerial talents, a balance in the factors of production comes in handy to not only magnify the margins of success but also to ensure a smooth transition of an idea or an event after another as is the case at the store. Besides, to avoid an imminent failure, the current operations management system at the store is focused on a defined edge in balancing the labor and operation costs (Witcher & Chau, 2010).

Therefore, the Carrefour Department Store has put in place stringent measures and strategies aimed and monitoring expansionary modules within feasible levels. These measures include techniques that are in use at the store to monitor sustainability by application of the scientific management strategies to balance the factors of the production matrix (Escrig-Tena et al., 2011). The measures have been successful, despite the current challenges facing the Carrefour Department Store.

Problem Identification

Despite the quality in its operations management, the Carrefour Department Store faces the challenge of delayed customer service due to the inability of the current workforce of twenty cashiers. Many customers often complain of long queues and sometimes take more than ten minutes to be served at the counter, despite the Carrefour Department Store’s promise of efficiency and timely services.

Although the Carrefour Department Store has added a new service line consisting of a cashier designated to serve customers who buy less than ten items to minimize the queuing, the seems to be a very minimal impact in the overall efficiency in customer service since the complaints have not ceased (Escrig-Tena et al., 2011). Specifically, the situation becomes dire during the weekends when there is a high traffic of customers in the store since the bakery, clothing, electronics, and food sections are always busy.

Proposed Solution

The store should hire four more cashiers to reduce the customer waiting time. The viability of this proposal is discussed as follows. The model is based on the assumption that the service time follows an exponential distribution. The number of servers is multiple. Also, the waiting room is unlimited. Thus, the supermarket can hold an unlimited number of customers. Further, the arrival time is estimated at 160 customers per hour. The service rate is 200 customers per hour. Also, the salary for each cashier is estimated at AED3, 000. The table below shows the calculation of waiting time for customers when the company employs 20 cashiers.

Inputs
Unit of time hour
Arrival rate (l) 200 customers per hour
Service rate (m) 160 customers per hour
Number of identical servers (s) 20 Servers
Outputs
Meantime between arrivals 0.040
Meantime per service 0.166666667 Hour
Traffic intensity 0.833333333 Hour
Summary measures
The average utilization rate of server 83.3%
The average number of customers waiting in line (nl) 3.10074 Customers
The average number of customers in the system (ns) 7.26740 Customers
Average time waiting in line (tl) 0.12403 Hour
Average time in system (ts) 0.29070 Hour
Probability of no customers in the system (P0) 0.00988 (this is the probability of empty system)
The probability that all servers are busy 62.0% (this is also the “percentage who wait in queue”)
The probability that at least one server is idle 38.0% (this is also the “percentage who don’t wait in queue”)
Distribution of the number of customers in the system
n (customers) P(n in the system)
3 0.119068
Distribution of time in the queue
t (time in queue) P(wait > t)
0.25 0.177675
hour
Cost of cashiers 20 * 3,000 AED60,000

Thus, the average waiting time in the line is 0.12403 while the average time in the system is 0.29070. The total cost of the cashiers is AED60, 000. The table shows the calculation of waiting time for customers when the company employs 25 cashiers.

Inputs
Unit of time hour
Arrival rate (lambda) 200 customers per hour
Service rate (mu) 160 customers per hour
Number of identical servers (s) 25 Servers
Outputs
Direct outputs from inputs
Meantime between arrivals 0.063 Hour
Meantime per service 0.05 Hour
Traffic intensity 0.4
Summary measures
The average utilization rate of server 40.0%
The average number of customers waiting in line (Lq) 0.15238 customers
The average number of customers in the system (L) 0.95238 customers
Average time waiting in line (Wq) 0.00952 Hour
Average time in system (W) 0.05952 Hour
Probability of no customers in the system (P0) 0.42857 (this is the probability of empty system)
The probability that all servers are busy 22.9% (this is also the “percentage who wait in queue”)
The probability that at least one server is idle 77.1% (this is also the “percentage who don’t wait in queue”)
Distribution of the number of customers in the system
n (customers) P(n in the system)
1 0.342857
Distribution of time in the queue
t (time in queue) P(wait > t)
0.333333333 0.000077
Cost of cashiers 25 * 3,000 AED75,000

An increase in the total number of cashiers reduces the average waiting time in the line to 0.00952 while the average time in the system reduces to 0.05952. The total cost of the cashier’s increases to AED75, 000. The table presented below shows a summary of the results

20 cashiers 25 cashiers Percentage change
Average waiting time 0.12403 0.00952 -92.32%
average time in the system 0.29070 0.05952 -79.53%
The total cost of the cashiers AED60,000 AED75,000 25.00%

The summary in the table above shows that the percentage decline in average waiting time (92.32%) is greater than the percentage increase in the cost of cashiers (25%). This implies that the benefits of adding cashiers exceed the cost. This indicates that the company will gain by adding the cashier. Therefore, based on the cost-benefit analysis, the company should add cashiers.

Discussion

From the findings of the quantitative examination, there is a need to reorganize some of the operational strategies of the Carrefour Department Store to ensure that the current quality model is sustainable in the long term.

Since the operations administration framework determines accomplishment of the business strategy, the Carrefour Department Store should create a small scale inspection unit for interior decision making as opposed to depending significantly on the full-scale market environment, especially in implementing the proposal to increase the number of cashiers by four. For example, the strategy for balancing the cashier efficiency and correspondence as part of the administration standards in quality management should be credible (Escrig-Tena et al., 2011).

Also, the part of restricting work and variables of creation will assume the most essential part of the operations administration system. This is a direct result of the part of social importance regarding dialect, inclination, and utilization that may be in the objective of the Carrefour Department Store.

Choices made ought to be subject to access assets such as venture portfolio, workforce size, experience, and proficiency for a particular task requiring particular capabilities. These outcomes would give a top to the bottom estimation of the circulation of success for future expected returns since increasing the number of cashiers will result in increased efficiency (Escrig-Tena et al., 2011). The specific recommendations for adjusting the current operations management by increasing the number of cashiers are discussed below.

Adopting the Flexible Monitoring System (FMS)

Business productivity reflects the ideal usage of distributed variables in the creation of products at the most cost-effective module. From the above refection, it is clear that the Carrefour Department Store should integrate the Flexible Monitoring System (FMS) to balance the quality variables that determine the magnitude of service delivery sustainability in the short-run and-long run (Witcher & Chau, 2010).

Despite lower rates of return beneath the projection, the general impact of adopting the FMS is that the company will have advantages that will exceed its restrictions since the increased labor force will translate into increase customer service delivery. For example, when the FMS is completely embraced as proposed, the company will be in a position to manage costs as a result of delays and logistics management. Even though the value of the Carrefour Department Store is lower than often anticipated, the FMS will make it reasonable since it manages the element of costs in managing operations through ensuring that optimal productivity is achieved at the least possible cost, especially when integrated into the new cashier service charter (Escrig-Tena et al., 2011).

Besides, the part of productivity as a consequence of FMS will push the generation logistics management towards manageability over a long period. Fundamentally, the prompt adjustment of the proposed FMS will contribute towards supportability in the part of cost, reliability, velocity, quality, and adaptability of the current operations management module. In particular, the increased productivity at the least cost will give room for the development of different product lines with a labor force of 24 cashiers without expanding the physical production utilities in each of the four departments. More space means more products being created inside of the same production lines.

Through enhanced flow in the customer service schedule, the Carrefour Department Store is set to quickly and considerably pick up from the unwavering quality perspective when contrasted with its rivals. Since customers will have the capacity to get their requests inside of a shorter time, the organization stands to gain from consumer loyalty and referrals (Escrig-Tena et al., 2011). Since the length of time of conveyance will diminish by around 92.34% of its present rate when the FMS is integrated, the organization is equipped to profit from economies of scale because of expanded ability to create and disseminate inside of a brief timeframe will guarantee increased productivity for different product lines currently being retailed by the Carrefour Department Store.

Within the dynamics of the Abu Dhabi retail industry, the quality framework is guaranteed by the integration of the FMS system since the customer service structures are well placed. Subsequently, when the framework is arranged effectively, the whole chain organizing these fragments would bring about ideal operations at the Carrefour Department Store, in terms of timely services to customers. Even though operations administration frameworks experience steady transformation as a consequence of short term, midterm, and long term goal setting, no organization can work productively without a quality framework (Witcher & Chau, 2010).

Accordingly, the quality will evaluate ideal production sustainability and competitiveness to ensure that the Carrefour Department Store is not only profitable but also efficient in managing the entire operations management matrix in balancing the cost as a result of the increased labor force and improved customer service time. Furthermore, the efficiency requirement as integrated into the FMS operations administration tracks implementers of the business procedure with a specific end goal to exhaustively confirm the reason for supporting current, anticipated, and real results for each complete customer service cycle, through a quality awareness framework.

Adopting the Six-Sigma

The Carrefour Department Store should consider adopting the six-sigma approach in quality control and certification in the logistics support after increasing the number of cashiers. Six-Sigma is an ordeal of operations administration that is utilized to create business operations, which guarantee productivity through ideal and convenient service cycles. Six-Sigma is embraced to accomplish huge impacts of creation effectiveness through occasional audit of the generation logistics network across the major departments in an organization (Witcher & Chau, 2010).

Really, Six-Sigma is an arrangement of business occasions that conveys positive yields and creates a business point of dependability in the customer service chain. Six-Sigma guarantees that service functions are vital and enhanced through the proactive administration of the components of production such as labor, time, and ideal efficiency timeline in each complete customer service cycle.

Six-Sigma is intended to diminish wastage in the productivity resources that can create an unstable service cycle and inadequate output from each resource input in the form of an increased labor force. Quality control is generally used to advance the nature of business productivity. Six-Sigma typically incorporates workers to give optimal productivity through self-appraisal and proactive ways to deal with efficiency in job performance (Escrig-Tena et al., 2011). Six-sigma is done to plan, synchronize, and deal with the diverse exercises of the organization through a productivity module that is designed to manage the performance of each employee (Escrig-Tena et al., 2011).

By actualizing the six-sigma approach at the Carrefour Department Store, the organization can focus the future dangers and obstacles in the execution of any service activity and take appropriate measures for addressing the unforeseeable dangers such as avoidable delays in customer service.

Modification of the Variables in Performance Management

Keeping in mind the end goal to accomplish quality operations administration, the current performance management matrix should be occasionally moved up to track the various working service models such as proportion examination in operation administration, which is perfect in proactive management of the entire performance matrix in the short term and long term production activities. These variables are achievable through quality assurance, production expansion, and inventiveness as part of performance management (Escrig-Tena et al., 2011).

The modification of performance management variables as a strategy is fundamental in the specialty of operations administration at the Carrefour Department Store (Witcher & Chau, 2010). Notwithstanding, having proficient operations administration framework will enable the Carrefour Department Store to completely track the component of checking advancement at miniaturized scale beside the large scale customer service cycle, especially during the weekends.

The second technique for reviewing the performance management variables for the cashiers at the Carrefour Department Store should be adjusted to correspond to quality assurance strategies across the departments such as logistics, human resource, production, research and development, and supply chain. To guarantee success in performance management, the quality administrators at the Carrefour Department Store should adjust both the performance trackers and complete service cycles across different departments as independent entities. This proposal will ensure that the Carrefour Department Store is in a position to locate areas with efficiencies or inefficiencies.

As a result, the quality management strategies that guarantee long term commitments are satisfied in the service cycle in each department (Escrig-Tena et al., 2011). This is conceivable because this model of operations administration framework takes into consideration operations process aggressiveness as it manages the superfluous overhead expenses from waste and underutilization of production input in the form of the increased labor force.

By the primary goal of estimating the completeness of the operation management matrix, it is of quintessence to reverberate upon the standards of relative execution of distinctive contending operation variables as a major aspect of the framework of the operation at the Carrefour Department Store. For consistency, the parameters and variables utilized should be adjusted to guarantee that the quality model is accomplished inside contending service matrices since the Carrefour Department Store has a series of departments with different service cycles.

Keeping in mind that the end goal is to address the hidden issues in stochastic instability estimation, the parameters should rotate on the fringe of pertinent data which is steady with the genuine and expected results from the quality model (Escrig-Tena et al., 2011). When the proposal is implemented, the Carrefour Department Store will not only be in a position to create an ideal performance management network but also track the progress of the customer service support functions such as labor, supply chain, and efficiency (Witcher & Chau, 2010).

Conclusion

The Carrefour Department Store has a generally stable operations administration framework. The company has a quality and proficiency certification framework that specifically affects the operations station, as the procedure is comprehensive of key and reasonable decision science. To reduce the waiting time in the supermarket, the researcher computed the average waiting time and total cost of cashiers after an increase based on an estimated number of customers visiting the supermarket per hour.

The results of the calculations show that the percentage decline in average waiting time (92.32%) is greater than the percentage increase in the cost of cashiers (25%). This implies that the benefits of adding cashiers exceed the cost. This indicates that the company will gain by adding the cashier. Therefore, based on the cost-benefit analysis, the company should add cashiers.

To effectively implement the proposed change, the store must make alterations in the effectiveness column through embracing the Flexible Monitoring System, Six-Sigma, and execution variable to guarantee maintainability in its business operations after increasing the number of cashiers to 25. These strategies will ensure that the store can track efficiencies and inefficiencies in the customer service cycle in each department.

References

Escrig-Tena, A., Bou-Llusar, C., Beltran, M., & Roca-Puig, V. (2011). Modeling the implications of quality management elements on strategic flexibility. Advances in Decision Sciences, 1(1), 1-27.

Witcher, B., & Chau, V. (2010). Strategic management: Principles and practice. Alabama, Al: Cengage Learning.