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Management
Utilization of Personnel
Store Maintenance
Energy Management
Store Security
Insurance
Credit Management
Crisis Management
Chapter Objectives
To describe the operational scope of store
operations management
To examine several specific aspects of
operating a retail business: personnel
utilization; store maintenance, energy
management, and renovations; store security;
insurance; credit management; and crisis
management
13-2
Overview
Operations management is
the efficient and effective
implementation of the policies
and tasks that satisfy a retailers
customers, employees, and
management (and stockholders,
if it is publicly owned)
13-3
Operational Decisions
What operating guidelines are used?
What is the optimal format and size of a
store? What is the relationship among shelf
space, shelf location, and sales for each item
in the store?
How can personnel be matched to customer
traffic flows? Would increased staffing
improve or reduce productivity? What impact
does self-service have on sales?
13-4
13-5
13-6
Personnel Utilization
Labour costs are high-one half of operating cost
High employee turnover means increased
recruitment, training and supervision costs
Poor personnel may have weak sales skills,
mistreat shoppers, missing transactions, and
make other errors
Many retailers are labour intensive Labour
scheduling is often subject to unanticipated
demand. They can be under or over staffed
There is less flexibility for firms with unionized
employees
13-7
13-8
13-9
13-10
Store Maintenance
Store maintenance encompasses all the
activities in managing physical facilities:
Exterior - parking lot, points of entry and exit,
outside signs and display, windows and common
areas adjacent to a store (sidewalk)
Interior - windows, walls , flooring, climate
control and energy use, lighting, displays and
signs, fixtures and ceilings
13-11
Store Maintenance
The quality of store maintenance affects
consumer perceptions, the lifespan of
facilities and operating costs. Customers
dont like decaying stores :
Replace burn out bulbs
Repaint room surfaces
13-12
Store Maintenance
Heating, ventilation, air-conditioning
equipment lasts an average of 15
years
Display fixtures- 12 years
Interior signs 9 years
13-13
Energy Management
Use better insulation in constructing and
renovating stores
Adjust interior temperature levels during
non-selling hours
Use computerized systems to monitor
temperature levels
Substitute high efficiency bulbs and
fluorescent ballasts for traditional lighting
Install special air conditioning systems
that control humidity levels sp. In freezers
13-15
Store Security
Personal security
Merchandise security
13-16
13-17
Insurance
Workers compensation, product liability,
fire, accident, property and officers liability.
Many firms also offer health insurance
13-19
Impact on Retailer
Premiums have risen
Many insurers have reduced the scope of
their coverage or require higher deductibles
There are fewer insurers servicing retailers
today
Insurance against environment risk is more
imp due to govt. regulations
13-20
Credit Management
The retailer must weigh the ability of
credit to increase revenues against
the cost of processing paymentsscreening, transaction and collection
costs plus bad debts
13-22
Operational Decisions to be
made in Credit Management
What form of payments are acceptable?
Who administers the credit plan?
What are customer eligibility
requirements for a check or credit
purchase?
What credit terms be used?
How are late payments or non-payments
to be handled?
13-23
13-24
13-25
13-26
Crisis Management
In-store fire or broken pipe
Access to a store blocked due to picketing by striking
workers
Car accident in the parking lot
Burglary
Sudden illness by employer
Storm knocking out power
Unexpectedly high or low demand for a good or service
Sudden increase in suppliers prices onions
Natural disaster like flood
13-27
13-28
Operations
Blueprint
An operations blueprint systematically lists all
the operating functions to be performed, their
characteristics, and their timing.
The retailer specifies, in detail, every operating
function from the stores opening to closing
and those responsible for them.
13-29
13-30
13-31