CASE ARTICLE – Ocado

You will prepare a 550 word written document for this section in which you will critically consider the operational practices of your allocated case and make recommendations for future operational practices.
In section 3 you must present your work in three subsections which are as follows:
3.1 Introduction ~ Briefly introduce the context of the case and then outline the most obvious operational challenges from the perspective of the digital economy, digital readiness; capacity and supply chain management. Cite case reference.
3.2 Operations in practice ~ Next you will outline the examples of operational practices of digital readiness; capacity and supply chain management, as they are evident within the case context. This needs to be undertaken specifically in relation to how operational functions are developing and changing in the digital economy; linking to the points that you have made in section 3.1. Here you will also show that you understand the current operational capacity levels within the allocated case and the significance of the role of capacity and supply chain management. References are required.
3.3 Developing digital operations capability ~ Finally, you will provide recommendations in relation to how the case organisation can meet the future operational challenges that you have identified in section 3.1. You should use academic sources to support the points that you are making about how to conduct operations management in this context. You should finish with clear points drawn from the argument and bring the work to a constructive end. References are required.
ADDITIONAL INFORMATION FOR SECTION 3 WRITTEN CASE REVIEW This section requires you to carefully consider how theories of operations management are put into practice, particularly from the digital operations perspective. You are encouraged to use additional academic sources that are relevant and credible.
4 Reference list ~ Overall list for all sections. It must be no less than 8 academic and credible sources which should be drawn from the recommended reading and supplemented with your own choices from a relevant context. Not included in word count.
5 Appendix items these must be copied into the main word document prior to conversion to PDF document and uploaded as one item. Not included in the word count.

THE CASE
Students should start by reading the Ocado at Glance section at this web link https://www.ocadogroup.com/who-we-are/ocado-at-a-glance.aspx and next they should read the section entitled Strategic Objectives before they undertake the study activities related to this case.

CASE SYNOPSIS In lecture 2 we considered the context and explored the strategy as stated within their website: Our strategic objective is to align the interests of our customers, investors and other stakeholders to deliver long term shareholder value. We seek to do this by driving growth, maximising efficiency and utilising our proprietary knowledge. This objective is a new business model which is based on knowhow, technology and designing from scratch. There has been a growth in customer numbers and a broadening of the range of goods. They aim to enhance customer satisfaction. If you look at the results centre https://www.ocadogroup.com/investors/results-centre.aspx you can see a video that talks about the 2015 results and about the new fulfilment centres. These are Hatfield and Dordon facilities and they are considering the capacity of the facilities and a third facility will go live in 2016 in Andover delivering 65,000 orders per week. Then a fourth building will begin operating mid-2017. Ocado has been running the technology and delivery network for Morrisons online business since it launched in 2014, and have now agreed to develop a new IT system to allow Morrisons supermarket to serve online shoppers from its own brick stores as well as Ocados central warehouse in Dordon, Warwickshire. See https://www.theguardian.com/business/2016/aug/09/new-ocado-deal-boosts-morrisons-online-push

THINK The case detail within the Results Centre indicates the operational challenges that include: short and long term capacity increases; development of operationally efficient infrastructure solutions; enhancing their end-to-end technology systems and enabling current and future partners online business. The Ocado website information includes an indication of their key strengths such as being the largest dedicated online grocery supermarket in the world https://www.ocadogroup.com/investors/key-strengths.aspx The term supermarket would normally refer to a large building containing a vast selection of groceries, which is smaller than a hypermarket but larger than a convenience store. However how can an organisation with a vast range of products avoid the lengthy shopping time that the supermarket requires whether in the brick or click environment?

DISCUSS: Notably Ocado have adopted a completely new business module. What stage of the Hayes and Wheelwright model do you consider them Ocado to be at? What risk might there be from competitors such as Amazon? What do you think Amazon are able to learn from the operations of Ocado? What aspects of five areas operations performance can you see within the case?

Readings to be used

Operations management – Nigel Slack, Alistair Brandon-Jones, Robert Johnston 2013

E-business: a management perspective – Jonathan Reynolds 2010
Book Essential Chapter 9 ONLY

Digital business and e-commerce management: strategy, implementation and practice – Dave Chaffey 2015

Operations management – Andrew Greasley 2013

Operations and process management: principles and practice for strategic impact – Nigel Slack, Alistair Brandon-Jones, Robert Johnston, Alan Betts 2015