Part1
Wegmans Food Markets.
- Make-to-Stock
- Wegmans can improve by making sure they are getting the products and bands that their customers want to have.
- Understanding their customers more, any and every business can continue to get to know their customers more.
- Focusing on the brands the customers prefer and not just the cheapest or most expensive.
- Improvement of the shipping trucks for employers.
- According to a truck drive, the trucks could use some improvement. The article says, “I felt like one very small, plump tomato looking for a way to get back on a very tall vine. When I asked for rappelling hooks and ropes, however, the driver for my outbound “flight” said reassuringly, “Don’t worry. I’ll give you a push if you need it” (Stoneback, 2002).
- Looking into other ways of shipping.
- Wegman’s get all their supplies to their headquarters and has trucks pick up supplies for each store and has them take it to the store.
- According to an employer Wegmans must spend a lot of money of doing their shipment this way. One way of improvement would be to have the supplies sent to each other first rather than the headquarters. The employer says, “After all, it takes 15 to 20 truckloads of groceries a week just to stock the shelves of the Allentown Wegmans and another 15 to 20 for the new Hanover Township store. Start multiplying the total number of supermarkets in the Lehigh Valley by a similar number of trucks for each store, and you’ll begin to get the picture” (Stoneback, 2002).
- “So even though that would normally be much cheaper than air travel, it can be more expensive, because if it’s containerized, you need to get it into a container boxed up with lots of other things. You need people to take it off, split up the shipment again, and get it to the destination. In those unusual cases, air can be the cheapest as well as the fastest. But, sending something by FedEx is going to cost a lot of money. Now, I should mention there are cases where you can justify sending large volumes of goods by air. One example of that was reported on extensively a few years ago is why Apple uses air shipments for its iPhones, especially around product launches. It costs about $250,000, or at least it did back in 2013. It’s probably a little less now, because fuel prices have come down. But about $250,000 to ship by air a plane full of iPhones” (Motley Fool Staff, 2017). –article about which of way shipment is the cheapest.
https://search-proquest-com.ezproxy.liberty.edu/docview/393090646?pq-origsite=summon&accountid=12085
https://www.fool.com/investing/2017/06/29/what-is-the-cheapest-way-to-ship.aspx
Part 2
Operation Management Concepts
As previously stated, Wegmans food stores is one of the most successful grocery stores out there. How do they do it? What is their secret to making their business run so smooth? It is the way they succeed in operation management techniques. I am going to discuss some of those techniques that include; Quality of work life, location planning, process selection, and facility layout, inventory management, total quality management, and supply chain management. The combination of these concepts is key to the success of Wegmans grocery store.
Quality of work life
Quality of work life “affects not only workers’ overall sense of well-being and contentment, but also worker productivity” (Stevenson, 2018, p. 301) With the amount of time Americans spend at work and that number continuing to rise. In an article by Andrew Nader who works for Rand Corps as a behavior analyst said Americans spend over 1/3 of their life at work “We spend a lot of time at work and it really affects people’s general happiness, and also life outcomes.” The environment you spend all this time must be a good one. Wegmans understand this. They take care of their employees in several ways. One of the ways is investing in the development of them. Each new employee at Wegmans has over $7000 invested in training. This training goes to sending them to school for their specialty. Other employee benefits Wegmans offers include, assistance programs to help find childcare, legal consultations, financial planning, adoption assistance, and other resources (Wegmans, 2018). “In return for employees’ dedication, Wegmans serves as a superior employer in the grocery industry.” (Taylor, 2016) The company also offers healthcare coverage. On top of the training and other benefits that Wegmans provides. It also has a top tier scholarship program. The programed kicked off in 1984 and has since paid out $110 million dollars to over 35,000 employees. In a press release, the company said they “expects to pay out approximately $5.1 million in tuition assistance to both new and returning scholarship recipients during 2017-2018 school year” (Wegmans, 2017) This way employees take the education they receive, that was paid for by Wegmans and in return, give back to the company or leave with a great attitude and feeling towards the company. With all these positive changes, it is no surprise that Wegmans has been listed as one of the top places to work for in several magazines.
Location Decisions
“When a well-known real estate broker was asked what the three most important detriments of the value of a property are, he said,” That’s easy, Location, location, and location.” (Stevenson, 2018, P. 343) Successful businesses all tend to have a common theme. That is where they are located, and Wegmans is no different. Wegmans has over 100 stores, mainly in Rochester, Buffalo, and Syracuse. They are expanding down the east coast in as far south as North Carolina. How do they decide where to place stores? For example, in North Carolina, they are in college areas with high household incomes. Thousands in the state and in other communities have been insistent on Wegmans building in their communities. (Clausen, 2017) According to Wegmans, more than 4,000 people contacted the company asking for a store in their community in 2015. (Taylor, 2016) According to our textbook, “Customer access is sometimes a prime consideration, as it is with banks and supermarkets…” (Stevenson, 2018, p. 356) This is exactly what Wegmens tries to do. By building locations in populated suburban neighborhoods people have easier access to them and the demand is high.
Process Selection and Facility Layout
Now that we have established they value taking care of their people and putting locations in accessible locations. Let’s talk about the process selection and facility layout.
Process selection and facility layout as defined in out textbook is “the arrangement of the workplace” (Stevenson, 2018, p. 243). Wegman also leads the way in this category. Known for their wide aisles and smooth layouts Wegmans takes a lot of pride in the design of their stores. Their stores are larger than most, most of them 100,000 square feet, up to 35 checkout lines (that are actually all open during peak times) The store does not just sell groceries, they have pharmacy, card shop, video rentals, produce, bakery, floral shops, foreign groceries and organic options. (Stevenson, 2018, p. 33) This layout style is becoming more common in large grocery super stores such as wholefoods and trader Joes and even more traditional stores such as Kroger. Wegmans must keep on track with the innovative layouts if they want to continue to grow and compete with others. (Taylor, 2016)
Inventory Management
Inventory Management is a key component of success for groceries stores. Inventory as defined by textbook is “a stock or store of goods” (Stevenson, 2018, p. 552) Management of these items plays a role in all aspects of any operation. Having just the right amount of any given object is the simple definition of inventory management. For a large store such a Wegmans this can be especially challenging. Wegmans is a little different in this aspect because each department does their own inventory using the company’s companywide program. The program keeps track of how many days’ worth of supplies they have in the stores and orders more if necessary
Total Quality Management (TQM)
“A philosophy that involves everyone in an organization in a continual effort to improve quality and achieve customer satisfaction” (Stevenson, 2018, p. 391) this concept can sum up everything Wegmans does. From investing in their cashiers to attend a 40 hours customer service training to sending their butchers and chefs all around the world for the best training possible to provide the best service possible. Stevenson says, “It would be incorrect to think of TQM as a collection of techniques, but a new attitude towards quality. It is about the culture of an organization.” Stevenson, 2018, p. 392) It is not just their customer service where quality matters. They take great pride in providing great quality products. Their produce is often replaced 12 times a day and is provide via a farm to market approach these ideas ensure that all their goods are as fresh as possible. Wegmans is so confident in their products and service that if a customer is not happy with something they are offered a replacement or refund. (Stevenson, 2018, p. 34).
Supply Chain Management
Lastly and probably what Wegmans does best is their use of supply chain management. Defined in our textbook as “the strategic coordination of business functions within a business organization and throughout its supply chain for the purpose of integrating supply and demand management” (Stevenson, 2018, p. 652). Unlike inventory management which just focused on goods that are already in the store. Supply chain management is the start and finish of the process. Wegman has been praised for its use of its vertical integrated system. Owning its warehouses help with not having to outsource distribution functions. Another piece that helps with quick delivery time is the fact that Wegman stores are limited to 6 states primarily located in the north east to assist in quick delivery times. (Teti, 2015) These are just a few ways is leading the way in supply chain management and able to keep prices low and supplies stocked in stores able to sell at a competive price for customers.
Wegman understands that succeeding in a few of these concepts is not good enough and to remain successful they must strive in all areas. That is how Wegmans uses; Quality of work life, location planning, process selection, and facility layout, inventory management, total quality management, and supply chain management to be one of the best grocery stores on the market.
References:
Clausen, T. (2017, June 23). Analyst: Wegmans should expand much faster. Retrieved from https://www.democratandchronicle.com/story/money/business/2017/06/22/analyst-wegmans-should-expand-much-faster/417201001
Jobs. (2018). Benefits. Retrieved from https://jobs.wegmans.com/benefits
Nader, A. (2017, January 17). 1/3 of your life is spent at work. Retrieved from http://www.gettysburg.edu/news_events/press_release_detail.dot?id=79db7b34-630c-4f49-ad32-4ab9ea48e72b
Taylor, K. (2016, August 03). This regional grocery chain is competing with Trader Joe’s to take over America. Retrieved from https://www.businessinsider.com/wegmans-beat-trader-joes-no-1-grocer-2016-8
Teti, K. (2015, December 15). Wegmans: The Best of Four Worlds. Retrieved from https://rctom.hbs.org/submission/wegmans-the-best-of-four-worlds/
Wegmans. (2017). Wegmans Employee Scholarship Program Welcomes 2,019 New Scholarship Recipients in 2017. Retrieved from https://www.wegmans.com/news-media/press-releases/2017/wegmans-employee-scholarship-program-welcomes-2-019-new-scholars.html