Ocado: Business Analysis

Business Operations Management

Operations management can be defined as the management of the processes that produce or deliver goods and services. It has made a significant contribution to society by playing a role in areas such as increasing productivity, providing better quality goods and services and improving working conditions. ‘Every organisation despite having or not having a functional operations department use operations management as every organisation produces either goods and or services’ (Greasley, A. 2010). The key elements of operations management are facility design and location, process technology, product and service design, process design, job and work design, planning and control, inventory management, capacity management,

Ocado have 4 fundamental operational areas within their retail operating model which effectively can be monitored and managed to achieve its strategy of ‘creating value for customers’. These key areas include; Order Interface, Order Processing, Fulfilment & Last Mile Solution and combined with the key elements of operations management shows how Ocado are currently doing in the industry. The main elements of operations managements Ocado are currently succeeding in are process technology, facility design and location and quality control.

Ocado currently use a centralised approach in terms of their Virtuous cycle which ‘drives both their platform operating model and platform business focuses on 4 attributes; Innovation, Efficiency, Growth and Investment’ (Ocado Group Annual Report 2016).

Since Ocado focuses on the providing value to its customers the very first step is the order interface which can be linked with the process technology element of operations management. (Ocado Group Annual Report, 2016) states that the ‘average order size is £108.10 within its active customer base of

This can be linked in with the flexibility and speed objective of Slacks performance objectives as ‘being able to change far enough and fast enough to meet customer requirements gives a flexibility advantage’ (Slack, 2007) as specific time slots can be chosen by customers which ensures that they are available to collect their delivery at times which suit them and online payment features and imports of favourite items speed up the process of shopping for