Read full version paper Operational Effectiveness of Supermarkets in Australia

Operational Effectiveness of Supermarkets in Australia


Category: Business

Autor: jon 08 March 2011

Words: 5987 | Pages: 24

Executive Summary

Supermarkets have been a part of life for many people living in the cities, people like you and me. It is hard to imagine not being able to go to one single place to get the groceries, the fresh vegetables, milk for the baby and food for my dog! In some places, supermarkets have became a tourist attraction of its own, like the 100-yen shops in Japan, where everything in the shop sells at 100 yen is part of a tourist itinerary. The sales concept is much similar to Daiso in Singapore where all products are S$2.00

In this report, the operations manager of one of the largest supermarket retail chain in Australia looks and analyses his operations based on the 10 determinants of the service quality. Applying to the current operations of the supermarket, he will evaluate each of the determinants and derive the recommendations to improve the overall service quality of the chain. With the decline of the quality of service currently, there is no time to be wasted for this analysis and to implement the strategic decisions to attain the objective of making the branch's operations more effective, efficient, productive and excel in customer service.


This study hope to achieve an in-depth analysis of the level of service quality, in a high profile supermarket branch in Australia. By using the ten determinants of quality service model developed by Parasuraman et al. (1985), this report will zoom into each of the ten determinants namely: Reliability, Responsiveness, Competence, Access, Courtesy, Communication, Credibility, Security, Understanding and knowing the customer and Tangibles. This report will analyze each determinant in areas relevant to a supermarket scenario, and makes recommendations on strategic decisions that can be made to improve the efficiency, effectiveness, productivity and excellence of the branch.

Some of the total quality management (TQM) system are being brought into the scenario to effect the logistical part of a supermarket's operations. However, it is ultimately the employee's competency, courtesy and responsiveness that impact the customer's shopping experience in the largest way. Thus the operations with employees involvement is found to be the most useful yet unable to quantify.

The report also questions the quest for productivity in a service industry, and what is perceivable in numbers increase (increase in productivity) may not equate to dollars increase (increase in customer service leading to more sales.


The innovation of a retailing technology known as supermarket begun in USA in late 1920s, with the concept of customers doing most of the purchase work on a self-service manner; shoppers picking goods as they move through the aisles at their own pace with no pressure (Lo et al. 2001). Shoppers then bring their intended purchase to the cashiers who will do the "check out" process, tabulating the total purchase, collects payment, pack the purchase and sends the shopper off.

What was intended as a self service, pick-your-own outlet has, over time, developed into a one-stop shopping experience by itself. A set up familiar to most city-dwellers in current times, a supermarket commonly consists of sections like butchery, fresh produce, fish/seafood monger, bakery, dry food, sommelier and frozen section. Some supermarkets include non-food merchandise such as sundries, toiletries, toys, IT-related products, drugs, books and also apparel. It is also common to find a café, a laundry shop and photo-processing kiosk in its midst to bring about well-rounded customer satisfaction.

It is found that large size stores, especially supermarkets, are the main shopping destinations of consumers in developed economies (Anderson and Hilmola 2007).

Oxford (2006) refers a supermarket as a large self-service shop selling foods and household goods. A retailer is referred as a business that sells good to the public.

Manufacturers produce goods, however a supermarket produces both a good and a service.

In Australia, the main supermarket brands are Coles, Foodworks, IGA and Safeway/Woolworths. Each with more than 300 branches and exists in metropolitan area of large cities of Australia (Vella and Gountas 2009).

The subject investigated is a high profile supermarket retail branch in a big city in Australia. The subject is one of the top 5 supermarket brands in Australia, and known to excel in excellent products and services.

However, the subject's staff seems to have taken the standard of their personal performance for granted, and the quality of service has started to decline. As the branch's operations manager who has just completed a short course on operations management, this report will analyze the supermarket retail branch's operations, namely the service quality aspect. With the results, it should re-establish the status of the branch, in terms of process and capacity design.

The operations manager's objective is to build a total quality management system that identifies and satisfies customer needs (Heizer and Render 2009, pp. 168)

Service Quality is defined as the customer's overall impression of the relative inferiority/superiority of the organization and its services (Bitner and Hubbert, 1994 cited by Johnston 1995). Service Quality is a measure of how well the service level is delivered matches customer expectations. Delivering quality service means conforming to customer expectations in a consistent basis (Lewis and Booms, 1983 cited by Parasuraman et al. 1985)

Challenges of service quality in Supermarket

Though one of the largest service industries, the supermarkets differentiate themselves by service quality factors for a competitive edge, as the prices and products are very similar amongst competitors. Supermarket provides very "low-contact" retail services, its employees has little chance to vary in their styles of delivering services, as they are trained in communicating in a fairly standardized scripted way with customers (Vella and Gountas 2009).

Productivity improvement in services industry are typically lower (than manufacturing), is because the design and delivery of service products include customer interaction (Heizer and Render 2009, pp. 157).

Dimensions of Service Quality:

Parasuraman et al. (1985) suggested that consumers use ten criteria in evaluating service quality, namely: reliability, responsiveness, competence, access, courtesy, communication, credibility, security, understanding/knowing the customer and tangibles. These are known as the ten determinants of service quality.

He later developed SERVQUAL, modifying the ten determinants to 22 items/five dimensions in 1988: Tangibles (physical facilities, equipment and appearance of personnel), reliability (ability to perform the promised task dependably and accurately), responsiveness (willingness to help customers and provide prompt service), assurance (knowledge and courtesy of employees and their ability to inspire trust and confidence), and empathy (caring, individualized attention the firm provides its customers). In addition, SERVQUAL evaluates the matching of customer's expectations and perceptions, which is the basic of Service Quality (Long and McMellon 2004).

SERVQUAL met with several critiques, one of them Cronin and Taylor (1992) who developed an alternative assessment, SERVPERF, which concerns only performance, without relevance to the customer's expectations. Other alternatives developed were Teas (1993) evaluated performance model (EP model) and normative quality model (NQ model). (cited by Lee et al. 2000)

For this paper, the analysis of the supermarket retail branch operations will be based on the ten determinants of Service Quality by Parasuraman et al. (1985)

(1) Reliability

Parasuraman et al. (1985) refers reliability to the consistency of the performance of the supermarket as a whole.

4 main areas that falls under this category:

(i) Presence of the branch and its operation hours

The physical presence of the store, and its dependability, that it will not close down unexpectedly. Store is open for customers to visit during the hours stipulated by the operation hours published, not later or earlier.

(ii) Availability of goods the customers needs, when the customer needs it

The selection of goods available is based on studies of the customer needs in the area. Goods (packed or fresh produce) are stocked always, shelves are not empty.

(iii) Availability of the service the customer needs, when the customer needs it.

Staff performing the services, the right way the first time. Staff does not make mistakes. Accurate in billing, cashiers do not overcharge nor undercharge. Should there be any discrepancies to be investigated; the supermarket keeps the records completely and correctly. Services are performed where they should be, like the weighing counter for fresh produce, gourmet counter for fresh and cured meats etc.

(iv) Firm honors its promises

If the supermarket promises to be the lowest priced in the city, it will be. Discounts/offers published will be honored as stipulated.

Recommendations on Reliability

(i) Presence of the branch and its operation hours

Proper scheduling of the staff will be able to ensure that the manpower is allocated for the correct opening and closing of the supermarket's operations. Considerations such as weekdays/weekends, public holidays etc should be made when preparing the schedule. For the team of employees in charge of the opening, it should be planned with back up, so that if a particular employee does not show up for work, the operations still continue.

The opening and closing task should be familiar to the staff who will be performing it. Dis-arming complicated electronic security systems, power switches for lights and air-con/heat, cash float drawing process and goods stocking should be trained to the employee, to prevent any delays possible in opening the store. Monitoring with random check at opening should be made by supervisors.

(ii) Availability of goods the customers needs, when the customer needs it

One of the major concerns of customers going to the supermarket to make a purchase successfully is the availability of what he/she wants. The intention of entering the supermarket is met, and the satisfaction of the customers is achieved. Morgan and Dewhurst (2007) suggested the use of Statistical Process Control (SPC) to monitor and control of stock availability. The system links with the Point-of-sale (POS) system to monitor the items that are selling out soon, and works with SPC to prompt the order with a suitable lead time that is pulled from the statistical history that SPC provides. As this lead time can differs between local and overseas producers, SPC helps the supermarket to track and order at the right time, armed with ongoing sales forecast.

SPC is also able to track and monitor the supplier's performance in areas such as: On-time deliver, delivery to the right address, complete order, correct paperwork and undamaged products. This will assist in the choice of best-practices supplier, which in turn will improve the effectiveness and efficiency in bringing about the customer's satisfaction. This will enhance the supply chain management process.

Implementation of efficient consumer response (ECR) system, will help to create better service (higher sales) with lesser wastage of products (lower cost) for supermarkets. Though co-operations is required from various members of the supply chain in sharing of information, the benefits of ECR has been evident in USA, Europe and Asia (Kumar 2008).

(iii) Availability of the service the customer needs, when the customer needs it.

Within the same roster mentioned in (i), staff should be also assigned their workstation (ie. cashier, gourmet counter, weighing station etc). Supervisors are to be assigned for the station to ensure that the physical manpower are on hand at the right areas to be of assistance to the customers.

Heizer and Render (2009, pp. 124) suggested forecasting of the branch's demands and sales volume, and arranging the manpower based on such forecast. The manpower base is usually made up of a mix of full timers and a group of casual workers. By forecasting, the potential of this mix of employees could be fully maximized.

(iv) Firm honors its promises

Fernie and Grant (2008) explored "incentive alignment" in a supermarket, where employees are scheduled to improve shelf filling. In Edinburgh, a UK grocers retailer, the department manager's priority throughout the day is to ensure that the all shelves offering promoted items are full and dresses, an employee is allocated to this task alone every morning.

Staff should be trained on "today specials" and also honors any discount or offer programs at check outs.

Quality control practices should be in placed to ensure that the produce are delivered and kept fresh while in the store, goods should not be expired etc. Damaged and expired goods are dealt with the suppliers or disposed off.

(2) Responsiveness

Parasuraman et al. (1985) refers responsiveness to the willingness or readiness of employees to provide service.

- Timeliness of service when the customers request them

- The ability to answer questions accurately when asked

- The ability to detect that customer is in a rush and moves and transact with speed

- Calling the customer back quickly

- Giving prompt service

- Attend to a complaint immediately

- Attend to an emergency immediately yet calmly

Recommendations on Responsiveness

Lee et al. (2000) suggested that firm can improve employee's responsiveness by increasing employee's motivations, improving selling skills, attitude training, clearer role perceptions, and improving the knowledge of the service itself and the organizational policies. As a result, they would increase the service quality and in turn increase organizational effectiveness such as increased sales and new customer attractions.

Being responsive is a rather broad area to discuss, as its output will be determined by the situation. In the supermarket environment, it will largely be problem-solving and service recovery. In this manner, the staff and supervisors of the supermarket will have to have a good service recovery plan with their level's empowerment. This should be cascaded to the levels so that the staff will know their abilities empowered and react fast to the issues that might come up. Should the situation calls for a higher authority, then the staff will be fast to alert their supervisors as well.

Having a comprehensive emergency plan that the staff can use as a guide, is important to improve the staff's responsiveness. Staff should be trained in handling medical emergencies (eg. first aider course), petty thefts or robberies (things to look out for) and bomb threat.

Specific operations standards are to be set up for follow-up with customers; staff should response to emails within 24 hours after receipt. There should be a "3-rings policy" for incoming calls during operating hours, phonecalls should be answered within 3 rings. Calls should be directed to a voicemail machine direct after operating hours. In the morning, such voicemails should be handled (if necessary) within 3 hours after opening. Standards like these should be briefed to the staff, and such standards should be expected and audited.

(3) Competence

Parasuraman et al. (1985) describes competence as possessing the required skills and knowledge to perform the service.

Like any industry, each staff is assigned an area of responsibility. The staff should be competent in the area of his/her responsibilities in order to be fully efficient to serve the customers. Different areas in a supermarket can be (but not limited to):

- Cashiers should be trained to use the Point-Of-Sales System; to be able to do mental mathematics; know where to find fresh produce or special of the day's rates; different payment modes; acceptance and checking of the discount coupons or vouchers.

- Gourmet counter assistants should be trained in the different kinds of cured and fresh meat; knowledge of cheeses and its origins; wine-pairing recommendations

- Weighing counter assistant should be trained on how to see if fruits are ripe for consumption; specials or discounts of the day; how to use the weighing and tagging machine; how to promote items which might need to be cleared off the shelf fast (eg bananas)

- Receiving personnel is aware of the deliveries of the day, and ensure that the different goods are stocked at its respective temperatures. Frozen goods to the freezer, diary to the chiller, and other to the general warehouse.

In addition to the role of receiving, the Quality Management aspect is evident at the loading dock as he is the sole person/s inspecting the goods that are going into the supermarket. The reverse logistic (returning damaged or unsold goods to the supplier) is crucial at this area as well.

Recommendation on Competence:

The correct training should be provided to the staff allocated the respective work stations as well:

Competency can be achieved by the combination of 2 factors:

1) The availability and training according to the documents that states the guidelines of tasks, expected outcome of tasks and Moments of Truth.

Moments of Truth are moments that exemplify, enhance, or detract from the customer's expectations. The operations Manager's task is to identify moments of truth and design operations that meet or exceeds the customer's expectations.

Documentation is required to specify what is to happen during the desired Moments of Truth. They could be work flow chart, operational manuals, job descriptions or service documentation.

In addition, Sohal and Lu (1995) illustrated Safeway's success in motivating their employees to provide superior customer service. The 4 factors listed were:

- Involvement of the staff in training, in improvement teams, which helps to introduce discipline, commitment and continuity to the purpose of the team

- Measurement of objectives and quantifiable progress that are selected by the teams and use them as an agreed scorecard to gauge their performance. Such measurements are displayed prominently and discussed in meetings.

- Empowerment to undertake improvements of the services themselves.

- Recognition of and rewarding the achievements of the employees.

2) The On-Job-Training provided for new staff, to enable them to use the various machines and also learn on-the-job. Buddy system of a new and an experienced staff for a period of time can enable to the experienced staff to impart his knowledge and experience to the new staff.

Subject should build an inspection system to audit on the competency levels of the staff by inspecting the work that is performed by them.

Training for management

Beamont et al. (1997) discovered that the service industry is more inclined to use consultants, especially for training for Quality Management Practices (QMP) in Australia. This reflects a lack of experience and internal knowledge of the QM techniques. In 1989, Safeway engaged a consultant who introduced the philosophy of Total Quality management (TQM) to the senior managers through a one-day "vision setting workshop", after which the same managers were sent for an external seminar where they were taught how to implement TQM (Sohal and Lu 1995).

(4) Access

Johnston (1995) explained access as the physical approachability of service location, including the ease of finding one's way around the service environment and the clarity of the route.

Parasuraman et al. (1985) added that it includes approachability and ease of contact. It means the service is easily accessible (lines are not busy and they don't put you on hold; waiting time to receive service is not extensive; convenient hours of operations; convenient location of service facility.

Fernie and Grant (2008) also described accessibility is the trip to the supermarket, instead of individual trips to the fishmongers, butchers, bakers etc. Having everything that the customer needs, under one roof, is improving the accessibility aspect of the supermarket.

Recommendations on Access:

As the subject is an existing branch, performance audits can be done in the following 2 areas:

(i) In-store Merchandising includes:

- The design of the aisle layout (signboards, planning of the stocks' locations, planning of varioys sections such as frozen goods, butchery etc)

- The display policy of the shelves (colours, labels)

- Location of special offers goods

- Location of last minute purchase (near check out line for impromptu buying)

(ii) In-store Convenience includes:

- Width of space between shelves (must be handicap-friendly)

- Presence of handicap-ramps and elevators

- Spacious corridors

- Available trolleys and shopping basket (pick up and return)

- Parking facilities or valet-parking service

- Operations hours beyond the competitors (eg. 24 hours)

The consideration of extending the operating hours can be addressed by research of Miranda and Konya (2009). They researched shoppers in Australia namely patronizing Coles and Safeway, and found that the patrons are tempted to make visits to the outlets with extended shopping hours. This is increased when other lifestyle services are included in that outlet during the extended trading hour, like eateries, hair-dressers etc. However the opposing views include the extension of operating hours will engender longer working hours for the employees, inhibiting family ties, neglecting religious sensitivities and also possibly increased prices to cover the operation costs.

Having supermarket services accessible has also expanded over time, most supermarkets now offers delivery service to homes, or e-grocers ordering online. Such services improves the accessibility of the supermarkets and can increase sales (Kumar 2008). Should such services be available, the operations manager should ensure that the quality of the goods delivered is the same as if it was purchased directly from store. Such complementary services should be based on the main supermarket's standard operating procedures.

(5) Courtesy

Johnston (1995) states that it is the politeness, respect and propriety shown by the service, usually contact staff, in dealing with the customer his or her property. This includes the ability of staff to be unobtrusive and un-interfering when appropriate.

Parasuraman et al. (1985) added that it involves the consideration and friendliness of contact personnel (including receptionists, telephone operators etc). It includes: consideration for the consumer's property (eg no muddy tracks in the carpark lots of the supermarket); clean and neat appearance of public contact personnel.

Recommendation on courtesy:

Martin and Adams (1999) approached aspects of nonverbal communication in service encounters from the perspective of empowering front-line personnel to engage in behaviours that were ". . . intended to convey courtesy, professionalism, respect, enthusiasm and appreciation". Eight actions were observed by non-participating researchers:

1) serving customers immediately;

2) conversing with customers;

3) smiling;

4) maintaining eye contact;

5) maintaining aligned posture;

6) demonstrating proactive behaviours;

7) placing change in the customer's hand; and

8) saying "thank you".

Training can be used to inform staff of the company's expectation of courtesy that should be displayed to the customers.

Courtesy is an element that is not possible to quantify for measurement, thus the Management needs to have a more accurate assessment of how the staff is performing in this area. Mystery shopping could be an option provided by an external consulting company, to be considered to get this assessment. Focus groups by the stores customers could also bring insights to how the customers feel first hand.

(6) Communication

The ability of the service providers to communicate with the customer in a way he or she will understand. This includes the clarity, completeness and accuracy of both verbal and written information communicated to the customer and the ability of staff to listen to and understand the customer (Johnston 1995).

Means keeping customers informed in language they can understand and listening to them. It may mean that the company has to adjust its language for different consumers – increase the level of sophistication with a well-educated customer and speaking simply and plainly with a novice. It involves: explaining the service itself; explaining how much the service will cost; explaining the trade offs between service and cost; assuring the consumer that a problem will be handled. (Parasuraman et al. 1985)

Recommendations on Communications:

Language could be a constraint in some countries; however in Australia where English is the main spoken and written language, this would not be an issue. However, as the store might employ non-English speaking staff, language training would be required should such staff be placed in customer contact areas. An English basic assessment test could be set up to ascertain the minimum language ability of any new hires.

Other communication concerns will be the clarity and accuracy of the offers/discounts promoted in the newspapers or magazines. Mailers or handouts given should contain the right information that the consumers can easily understand and utilize.

The labeling of the items on the shelves, showing the make and model of the item with the prices should be accurate. Because of its display, fresh produce's prices have to be clear to the customers (eg. fresh prawns in a tank could be priced at per 100grams, whilst frozen prawns in a bow will be charged at a per box price)

Store can look at unique way of speaking with customers too. Summit Inc, a Japanese grocery market, attach sensor-operated automatic speakers to the special offers shelves, which allow the customers to be informed of the special offers as they walk pass the shelves (Azuma and Fernie 2001)

In Carrefour Singapore, a voice over the public announcement system reports the specials of the days in different sections of the supermarket on an hourly basis.

(7) Credibility

Involves trustworthiness, believability and honesty. It involves having the customer's best interests at heart. Contributing to credibility are: company name; company reputation; personal characteristics of the contact personnel; the degree of hard sell involved in interactions with the customer. (Parasuraman et al. 1985)

The credibility of the business depends very much on its history, as discussed in point (1) reliability, honoring its promises is one way to add to the credibility of the firm. Ensuring that the quality that is promised is being met is a continuous effort of the firm to build up on its credibility.

Recommendation on Credibility:

Like courtesy, credibility cannot be measured. Thus, firms will have to rely on market researches done by external consulting companies in order to have a real value tagged to it.

Consumer benchmarking criteria could also be used to gather information from consumers comparing subject with the competitors. Such feedback attained can be used to address performance gaps.

In addition, the clarity and understanding of the firm's mission and vision statement helps employees to know where the firm is heading and how to get there. Guided by the mission and vision, employees will be able to act along them, and increase of the credibility factor.

Honesty awards could be set up to honor any staff members who have displayed honesty at work front.

(8) Security

Personal safety of the customer and his or her possessions, while participating in or benefiting from the service process. This includes the maintenance of confidentiality (Johnston 1995).

Is the freedom from danger, risk or doubt. It involves: physical safety, financial security and confidentiality. (Parasuraman et al. 1985)

In a supermarket scenario, such areas are covered:

- Security of the branch itself, ie customers does not get robbed or pick-pocketed

- Safe environment of the branch, ie no broken tiles, missing glass panels or slippery floors

- Information Intelligence, customers' personal information (address, telephone number) or payment details (atm pin number, credit card numbers) are protected.

Recommendations on Security:

Ensuring that the branch is installed with a network of closed circuit TV (CCTVs), this should be made known to the public so that potential criminals will avoid committing any crimes within the branch. This should include the car-park areas. A process has to be set up for the filing of the footage.

A comprehensive security plan should be available in cases when the cashier is robbed, like a emergency call button at the check out counter.

A committee could be formed to do regular patrolling around the branch, detecting possible hazards. Working closely with the housekeeping and maintenance team, these hazards should be immediately rectified. Affected area should be cordoned off, if unable to be rectified immediately.

Staff should be familiar with the fire escape routes and be on hand to assist in case of emergencies. Fire exits should be clearly visible and its power on back up generator in case of power failure.

Accounting procedures are to be set up so that the customers' information will be properly kept. The disposal of such information would also be done correctly.

(9) Understanding and Knowing the Customer

Involves making the effort to understand the customer's needs. It includes learning the customer's specific requirements; providing the individualized attention; recognizing the regular customer (Parasuraman et al. 1985)

Knowing the customers that subject serves is very important. It is also noticed that the consumers now are wealthier, older, more educated and more ethnically-diversed. Such changing demographics affect taste and expectations (Kumar 2008). Understanding such changes may affect what the supermarket might stock on the shelves.

Recommendations on understanding and knowing the customers:

Safeway uses several methods to gather customer information that are commonly used in the market (Sohal and Lu 1995). They include:

- Market surveys conducted on a regular basis by professional market research organizations

- Focus group meetings held at stores by willing customers

- Suggestion boxes placed in the store.

Another way to know about the customers will be through the items that they purchased, using the point-of-sales (POS) system, the supermarket is able to tell which are the top selling items, and from such statistical information derived the demographics that could be visiting their store. For instance, if the top selling items are baby's diapers, milk powder and baby food, then the conclusion could be drawn that families with young children are patronizing the store. Thus, the supermarket is able to correctly bring in more items that could satisfy the needs of such clientele.

(10) Tangibles

Includes the physical evidence of the service: physical facilities; appearance of personnel; tools or equipment used to provide the service; physical representations of the service, such as a plastic credit card or a bank statement; other customers in the service facility. (Parasuraman et al. 1985)

Theodoridis and Chatzipanagiotou (2009) mentioned that although the supermarket context is a self-service one, the service provision to the customers with its various sections such as fresh produce areas, bakery, aisles of goods are all important attributes. All these attributes could increase the customer's positive buying experience.

Another important attribute of the tangibles is the overall store atmosphere, which is created by the combination of the sensations that the supermarket can create, the smells of the bakery, the air-con temperature, the music that it plays and also the colour of the staff's uniform. The success of this combination could also increase this buying experience and also the customer's satisfaction.

For the customer's convenience, the store layout and design can help the shopper to plan their trip in terms of orientation and direction. The layout of the store is successful when it has a clear and legible concept, shoppers can find the items that they one easily even on their first visit. The various labels, information posters and clear signs help to enhance the store's environment.

Other common tangibles found in current supermarkets can be nursing rooms, children's toilets, children play area and even a reading corner full of books.

Together with an efficient housekeeping team, the cleanliness of the supermarket can be kept to maintain the desired atmosphere. The schedule of the housekeeping should include washrooms, common areas, corridors and supermarket areas on a regular basis.


Johnston and Jones (2004) argued that the measurement of productivity, when brought to the service industry perspective, could be complex. As productivity is ratio between the inputs and outputs, when used in measurement of services, can be limited by the features and characteristics of services. The intangible nature of many services means it can be difficult to objectively define and measure the service outputs.

Other considerations could be that the "outputs" could be simultaneously produced. A cashiering transaction at the check out counter of the supermarket, outputs could be the monetary transaction of money and goods, this could also be a service experience that is produced and left in the customer's impression.

Services being perishable and heterogeneous are also be experienced differently by different customers in different circumstances. A customer could approach the cashier to check a special ongoing in the supermarket. This could have cost the cashier 10 minutes with zero output in her primary duty which is the monetary transaction, however, her assistance made a positive impact in the customer's impression which could be a favorable service output.

A few supermarket scenarios are raised to challenge the "service productivity" concept:

- A faster check out line due to more sophisticated machines (scanners) or simply a corporate performance target, could make the customers feel that he/she is being "rushed off". This resulted in a poorer service experience although the productivity is higher.

- A self-service check out counter is set up for customers to self scan the items that he bought and check out using credit card payment. Although this does not improve productivity (it still take as long if not longer to check out one batch of purchase), but the customer gains more satisfaction (of being in control and no time spent waiting in line)

- To prevent customers from having to queue at check out, the bakery in the supermarket decided to collect its own payment. Although this has brought about higher productivity at the bakery, it has caused much inconvenience to the customers who have to pay again if they are purchasing other items from the supermarket.

The subject being part of a chain could also pose some issues, as corporate direction could render some hindrance into the Operations Managers' work. However, if it is already a structured total quality management (TQM) system that is in place, like Safeway (Sohal and Lu 1995), this could bring about convenience. Anderson and Hilmola (2007) defined parent company's role as skill transfers and sharing of activities such as group marketing efforts.


This report concludes that it is indeed possible to bring about total quality management (TQM) system into a service industry, a supermarket.

After the analysis of the ten determinants, it was found that for determinants (like responsiveness, courtesy) are not quantifiable, this results in training and planning for standards to be done in a "hopeful" way.

Productivity for such an operation remains a questionable issue. Being a business which primary purpose is to get sales and earn a profit, owners or managers will have to stop looking at the productivity numbers (as to how many customers are served) and should be how many customers were delighted in the process and will return to the store again.

The main areas that could use a results-trackable system will be the supply chain management and receiving function.

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