Lancaster University
Blackwell’s Bookshop
MNGT 503: Operations Management
Report

Anais Anais
Christine Neubauer
José Pedro Martinho
Olivia Gao
5th December 2015

LANCASTER UNIVERSITY BLACKWELL’S BOOKSHOP BOOKSHOP

Table of Contents
Introduction ............................................................................................................................................ 2
Objectives ............................................................................................................................................... 3
Operation Process................................................................................................................................... 4
A.

The Four Vs of the Operation Process ........................................................................................ 4

B.

The Five Performance Objectives ............................................................................................... 5

C.

The Process Map ......................................................................................................................... 7

D.

Shop Layout................................................................................................................................. 8

Analysis................................................................................................................................................... 9
A.

The Four Vs of The Operation Process ........................................................................................ 9

B.

The Five Performance Objectives ............................................................................................. 10

C.

Process Map .............................................................................................................................. 11

D.

Shop Layout............................................................................................................................... 11

Conclusion and Recommendations....................................................................................................... 12
A.

The Four Vs of the Operation Process ...................................................................................... 12

B.

The Five Performance Objectives ............................................................................................. 12

C.

Process Map .............................................................................................................................. 13

D.

Shop Layout............................................................................................................................... 14

Limitation & Further Study ................................................................................................................. 15
References ............................................................................................................................................. 15
Appendices ............................................................................................................................................ 16

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LANCASTER UNIVERSITY BLACKWELL’S BOOKSHOP BOOKSHOP

Introduction
“Blackwell’s is an Oxford-based academic book chain over 130 years old. Its Lancaster branch is the latest legacy of bookshops placed on campus, preceded by Waterstones for a number of years. When Waterstones chose to leave campus in late 2011, Blackwell’s moved in to what is now the renovated study zone on the ground floor of the Library. In July 2014
Blackwell moved to the current location on the Spine in Bowland College. In April 2015 the long-time manager moved on to work for the university, and was replaced by one of the original staff from when the shop first opened back in early 2012” (Millan, 2015). The shop sells a wide range of products including academic textbooks, general books and a wide range of fiction titles and stationery. It also buy and sell second-hand textbooks (Blackwell, 2015).

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LANCASTER UNIVERSITY BLACKWELL’S BOOKSHOP BOOKSHOP

Objectives
This report aims to provide a recommendation for improvement of the Lancaster
University Blackwell’s bookshop by characterising and analysing its operation proccess. This report is divided into four sections, which are the following:
1. Operation Process:

A. The Four Vs of the Operation Process
B. The Five Performance Objectives
C.

Process Map

D. Shop Layout
2. Problem Analysis:

A. The Four Vs of the Operation Process
B. The Five Performance Objectives
C.

Process Map

D. Shop Layout
3. Recommendations:

A. The Four Vs of the Operation Process
B. The Five Performance Objectives
C.

Process Map

D. Shop Layout
4. Limitation and further study

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Operation Process
A. The Four Vs of the Operation Process
Even though the operations processes present some similarities regarding the transformation of inputs into outputs, there are still some differences when it comes to describe them specifically (Slack et.al, 2013). This part of the report will outline the Four Vs of Blackwell’s which are composed by the volume, variety, visibility and variation - all representing the operations processes. The graph below illustrates how those Four Vs are charaterised. The operation of Blackwell’s consists in a low volume, as the store only orders a small number of products. This negatively impacts unit costs making them higher and thus harder to compete with their main rival Amazon.
The general variety of products can on the one hand be described as being quite low since books (academic and non-academic), stationery, cards and gifts are the only products offered.
The target customers are almost exclusively university students, both graduate and undergraduate. On the other hand, analysing the variety of academic books, which are the most sold product of Blackwell’s, the variety is very high. Taking both perspectives into account, the process of the shop can be described as having a medium level of variety.
The variation of the operation can be described as being high since there are some peaks on the demand throughout the year, particularly in October and February matching with the beginning of terms. As this variation can be predictable the manager can change the capacity of the store according to those changes.
The visibility of the operations is very high since the whole transformation process is directly dependant on the contact established with customers.
Low

Fig. 1: The 4 Vs

Volume

High

High

Variety

Low

Variation

Low

Visibility

Low

Low
High
High
Low
High
High

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LANCASTER UNIVERSITY BLACKWELL’S BOOKSHOP BOOKSHOP

B. The Five Performance Objectives
In order to achieve the organisational and operational goals, the five performance objectives lead the organization in managing its resources and activities. As mentioned by
Rowland Jones and O’brien (2004) the five performance objectives are the dimension of overall performance to measure the customer satisfaction. These performance objectives consist of quality, speed, dependability, flexibility and cost dimensions. Those five dimensions are not only aligned with the needs of the customers but also incorporate the company’s objectives and values which then become its competitive advantage. However, no company will ever be able to accomplish all dimensions equally since there are a trade-offs between each one of them due to the inevitable limitations of resources (Neely, 2007). One of the obvious example is the trade-off between cost versus quality.

Quality:
Slack et al. (2013) explained that quality can be described as conformance and specification, in other words, “doing things right”. In addition, Neely (2007) stated that quality is not only about conformance and specification but also the desirability, reliability and durability of a product. By improving quality, company might reduce complaints from the customers. In this Blackwell’s shop, quality can be defined as:
 The condition and quality of producs which are books, stationary and gifts;
 The cleanliness and tidiness of the shop;
 The shop layout and decoration;
 The friendliness and helpfulness of the staffs.

Speed:
Speed refers to the time spent by the customer in buying the product or service since it is requested to the moment it is dispatched and until receiving it, in other words, “doing things fast” (Slack et al., 2013). The benefits of speed dimension are the support in maintaining dependability and also enhance the value of the product or service. The speed dimension of
Blackwell’s is described as:
 The elapsed time in requesting until receiving product;
 Immediate availability of the products.

Dependability:
This dimension evaluates how the company produces and delivers products to its customers on time and according to agreed costs and prices. It is the ability to function as designed and expected whilst performing consistently over a reasonable amount of time. By maintaining dependability, the company reduces the possibility of customers’ complaints.
Dependability concerning to Blackwell bookshop could be seen as:
 Predictable opening hours;
 Proportion of out-of-stock product;
 Queue times.
(Slack et al., 2013)

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LANCASTER UNIVERSITY BLACKWELL’S BOOKSHOP BOOKSHOP

Flexibility:
Flexibility dimension focus on the ability of the company to configure the product lines to deal with various product requirements and whether operations can adjust to new requirements quickly. There are four types of requirements which are a product/service mix, volume, delivery. The flexibility dimension enhances the benefits of the previously mentioned dimensions. In the context of the bookshop, the requirements of flexibility could be defined as:  Product/service: Introduction of new books, stationery or gifts;
 Mix: Wide range of books, stationery and gifts;
 Volume: The ability to adjust the number of products demanded;
 Delivery: The ability to get out-of-stock books, stationery and gifts.
(Slack et al., 2013)

Cost:
The variation in unit cost due to changes in the volume of manufacturing production and the variety of goods produced are a matter of the cost dimension. All of the four Vs in the first section and the other four dimentions in this section influence the cost. In most cases, the higher the variety of products and the lower the volume produced, the higher will be the unit cost, and vice versa. Regarding customers, cost means the price and value of products. For the shop these costs were defined as:
 Book, stationery and gifts initial cost;
 Operating cost;
 Staff cost;
 Technology and facilities cost.
(Slack et al., 2013)

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LANCASTER UNIVERSITY BLACKWELL’S BOOKSHOP BOOKSHOP

C. The Process Map

Activity
1. Meeting publishers
2. Gathering information from academic staff
3. Analyze data from the past years
4. Decision which books to order
5. Order books
6. Wait for books to arrive
7. Book the books into the system
8. Label the books
9. Put “saving” sticker on them
10. Order books into the shelves
11. Wait for them to be bought
Sum

4

1

2

3

1

0

Graph 1: Process mapping symbols as suggested by the scientific management and Slack et al., 2013

During the summer the shop manager meets publishers to see what they have to offer.
After this he sits down with professors to see, which books they would like to use for their courses and how many students are going to attending them. For finalizing the order the figures from last year are taken into account. These three steps help to determine the size of the order and which books are going to be sold in the next year. After the books arrive, they are booked into the shop’s system, get their price label stick on them and if they are soled cheaper due to a discount, a sticker indicating the saving will be attached. Then the books are put into the shelves and are ready for sale. A similar process is used for stationary and gifts.
Only here the demand will be determined by previous sale figures. (Slack et al., 2013)

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LANCASTER UNIVERSITY BLACKWELL’S BOOKSHOP BOOKSHOP

D. Shop Layout
As Blackwell’s shop works as an intermediate seller, there is no relevant process of transformation of products. Instead, this bookshop sells books, stationery, cards and other gifts that have acquired from different suppliers straight to the final customers. Blackwell’s acts as a retailer and their shop at the Lancaster University uses a functional layout both for different types of products and for different kind of books.
Because in a “functional layout, similar resources (…) are located together” (Slack et. Al
2013), different kinds of products need a different strategy on the layout to use. The shop has two entrances, one in the front, the main one, and the other on the back. In front of the main entrance we can find the counter. Around it are stationery items displayed as well as items in sale, including books. The middle of the store, in between the two entrances, has some nonacademic books, mainly science fiction and some recommendations selected by Blackwell’s.
But the mainly composes this section are the stands and book-shelves containing gifts, like bag-packs, pens, pencils, etc., and cards. Other very important component of this section is a small area where second hand books are available. This second hand books are sold cheaper than the other books and are bought from students and sold to students. Finally, the end of the store includes all the most important products for the business, the academic books. This larger area has its walls covered by book shelves divided by scientific area (for example: economics, marketing, biology, history, etc.). Being the most attractive reason for customers to visit the shop, the managers decided to include in that zone a stand with cards, since it is the item least sold. In this area of the shop we can also find two shelves in between the side limits allowing the retailers to have an extra space where they can have more items in exhibit.
This is where we can find academic but not exclusive to a subject books, like dictionaries.

Fig. 2: Lancaster University Blackwell’s Bookshop Layout

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LANCASTER UNIVERSITY BLACKWELL’S BOOKSHOP BOOKSHOP

Analysis
A. The Four Vs of The Operation Process
Volume:
Blackwell’s has a very low volume of output. Besides the manager, there are four other employees: two working on full-time and two only on part-time. A smaller number of workers enlarges the range of individual tasks which leads to an increase of unit costs. In this sense there is low repeatability and less systemisation of the tasks.

Variety:
There are only four different types of products in the shop, making its variety quite low: books, stationery, gifts and cards. On the other hand, as this is an oriented to university students shop there is a well-defined and wide range of books. The variety of this single product is very high with the academic and non-academic books as the two most important groups. Inside these groups books are still divided by a more specific genre (e.g.: science fiction and thrillers for the non-academic books; biology and economics for the academic books). There is clearly a mix on the variety of the shop’s operations.

Variation:
Conforming to the shop manager the demand for all the products rockets at the beginning of each term, especially in the first two weeks. From that peak onwards the general demand starts declining slightly. It remains steady, with minor fluctuations, for the months in between terms. During the holidays the demand plummets, reaching a trough, because the majority of students leaves the campus and the shop is closed for a few days.
Due to the repetitiveness of the process, it is easy for the manager to make an estimation on how the demand will be. To be prepared for those estimates the shop contacts the different departments on the university to collect information about which textbooks they will adopt and how many students will be attending lectures. The shop also gets in touch with editors to negotiate prices in order to deal the best margin.

Visibility:
At Blackwell’s the clients are an important part of the transformation process and interact directly with it. Their presence while purchasing an item enables them to interact with staff. So there is a requirement for the employees to have the right serving skills to meet customers’ needs. While comparing with their biggest competitor customers are less tolerant about waiting for a product, preferring the quicker solution. When an out-of-stock situation occurs (probably caused by the lack of storage capacity of the warehouses) the shop’s

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LANCASTER UNIVERSITY BLACKWELL’S BOOKSHOP BOOKSHOP

response, three to five working days, is slower than the delivery time of the always in stock
Amazon, one to two working days.

B. The Five Performance Objectives
In order to analyse the five performance objectives of Blackwell’s bookshop the report uses two different sources of date: First the perspective of the manager, which was gathered by an interview an e-mail. Secondly 50 students from 16 different courses responded to a questionnaire, which was based on the five performance objectives in the context of
Blackwell’s bookstore, as outlined above. The full results are attached in the appendices.
Based on the interview, the manager of Blackwell rate the shop 10 for all the dimensions whilst based on the questionnaire, on average, the customers’ rate 7.8 for quality, 7.3 for speed, 6.7 for dependability, 6.5 flexibility and 4.5 for cost. The comparison between manager and customer perspective on the five performance objectives is shown in the polar diagram below. Adapted from Slack et al (2013)
Based on the diagram above, it can be concluded that there is a different perspective between manager and customer which creates gap, as shown in the diagram above. There is relatively small gap in the quality and speed dimension. Then, the gap is slightly bigger in the dependability and flexibility whilst the biggest gap is clearly shown in the cost dimension.
Regarding to the small gap in the quality, it indicates that Blackwell provides good quality of books, stationery and gifts, a clean and tidy shop and also courteous, friendly and employs helpful staff. Moreover, the customers believe that the books that Blackwell’ sells are in the correct edition since Blackwell’ coordinates book orders with the course directors. The quickness between requesting and getting the products, products immediate availability and also accessible location of Blackwell are evidences that support the small gap in the speed dimension. In regards to the dependability, the majority of customer is quite satisfied with the general dependability, quarter of the respondents are quite disappointed with the opening hours, proportion of out-of-stock products that failed to be kept to minimum number

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LANCASTER UNIVERSITY BLACKWELL’S BOOKSHOP BOOKSHOP

and the queuing times especially in the peak season such as October when the academic term starts. Regarding to introduction of new products, wide range of products, Blackwell’s ability to adjust demand and get out-of-stock products as the flexibility dimension, most of the customer are satisfied and only small number of responses are low-rated. Concerning the cost dimension, the majority of customers rates the value as high whilst more than half of the respondents stated that the price of the product is too high, especially compared to Amazon, which is according to the manager also the main competitor.

C. Process Map
The process of Blackwell’s is straight forward. The steps are clearly separated and according to the shop manager there is only one bottleneck: Indicating that the book is cheaper than somewhere else. The shop only needs to move their ware once, when they put them into the shelves. As there is no storage, everything is displayed in the shop. Accordingly
Blackwell’s is saving time in regards to moving things in and out of stock.

D. Shop Layout
Because “the objective of layout strategy is to develop an effective and efficient layout that will meet the firm’s competitive requirements”, the layout designs must be planned in order to improve the customer interaction and flow. As well as to guarantee a better use of space and equipment.
Heyl (2011)
The main problem with the layout of the store is that in the busiest seasons, like the beginning of terms, the queue gets too big occupying a large area of the shop. This creates an exaggeratedly long waiting time to pay for a product, discouraging the clients to search for
Blackwell’s products and finding an alternative within their competitors. This happens due to the lack of space in front of the counter, where there are stands preventing the formation of an ordered queue, interrupting the normal flow of people inside the store. Also the bad positioning of the counter in comparison with the two entrances contributes to the problem of a bad flow of the “production”.
Accordingly to the shop manager there is another problem related to a wrong planning of the layout. Some books in the academic area are not being sold as expected because the shelves where they are displayed are too “hidden”. What he meant is that clients cannot see them at first, especially for those who have a worse knowledge of the store, either because they have a stand covering them or because they are in a corner shelf with a lower visibility.
On the other side, books which are in great demand get out of stock frequently due to a lack of storage to provide a sustainable ratio of stocks, where either there are too much copies of a book or too few of another.

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Conclusion and Recommendations
A. The Four Vs of the Operation Process
As highlighted in the previous section we identified two problems in terms of price and ordering time. Therefore some suggestions will be given in the Five Performance Objectives section. B. The Five Performance Objectives
Based on the analysis, it can be concluded that there is a trade-off in the Blackwell’s bookshop which is cost versus quality, speed, dependability and flexibility. Regarding to this conclusion, since the trade-off is inevitable, Blackwell’s need to consider the relative importance of performance objectives that can help in deciding the improvement priority which can be determined using the importance-performance mapping. There are three factors in the importance-performance mapping which considered as competitive factors which are order winners (factors that will gain customer and encourage them to switch buying pattern), order qualifiers (factors that might not gain customer but keep existing customer) and other less important factors (factors that might not gain new customer or keep exisiting customer but should not be ignored since could be important in the future) (Slack et al., 2013).

Adapted from Slack et al (2013)

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Considering the analysis in the previous section, regarding Blackwell’s performance compared to Amazon and customer perspective on the importance of their buying decision, below is shown the importance-performance mapping.

*Location
*Quality of products & shop

*Customer Service
*Queue times
*Flexibility of
*Purchasing lead-times products, volume, mix & delivery

Adapted from Slack et al (2013)

The order winner of the bookshop is quality and especially accessibility or location and purchasing lead times since these are not only important for the customer but also where
Blackwell’s performs well against Amazon. Regardless, several order qualifiers and less important factors, there is one urgent action which related with price since it is considered important yet Blackwell’s scores poorly against Amazon. Therefore dynamic pricing strategy by customizing the price to compete with Amazon is recommended. Blackwell’s might use direct comparison in the price label or the receipt by stating how much the customer save their money from buying products in Blackwell’s compare to Amazon. In addition, student membership pricing as part of dynamic pricing is also recommended since by creating this loyalty programs that reward the best customers, Blackwell’s might counter the Amazon subscription program, the Amazon Student Prime.

C. Process Map
Getting the information earlier about how cheaper Blackwell’s is able to sell the books would help them to prepare in advance the correspondant stickers. As the stickers are hand written, printing them out would be faster and cheaper. Other than that the process flows smoothly and is well designed for its purpose and its circumstances.

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LANCASTER UNIVERSITY BLACKWELL’S BOOKSHOP BOOKSHOP

D. Shop Layout
Although the “objective is to maximize profitability per square foot of floor space” as stated by Heyl (2011), there is a management of the available space and products to be concerned. In order to avoid the creation of such long queues and to assure a normal flow of the clients the stands in front of the counter must be removed or replaced during the peak seasons. Giving a role to each entrance would also shorten the queue, moving the counter right next to the side of the door in the front making it just a way out for those customers who had made a purchase. The other door, the one in the back, would be used as the main entrance and also as a way out for those customers who had not bought anything.
Despite of the handicap of the space of the shop and its small spaces for storage, stocks of products could be stored in a rented place in the periphery of the shop. Anywhere inside or outside the University as long as it was located in Lancaster would allow Blackwell’s to respond quickly to a higher demand of certain products, especially books.
Predicting forecasts on the demand for certain products is always a challenge, and with it comes the equally difficult task of distributing them among the shelves of the store. The front area and the shelves in the middle of the store and in front of the entrances are the ones with a higher visibility. Items which are less sold, new releases and items in sale should be strategically placed in these areas to make clients aware of them and stimulate their purchases. Products that have a steady demand over the year, like specific books for lectures should be placed in the most “hidden” areas since customers will look for them anyway.
Even though there is a clear bottleneck related to the size of the store there is an efficient way to manage the allocation of products that can contribute to raise profitability using the available conditions.

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Limitation & Further Study
Due to the time limitation, it impacts on the limited number of respondents which is only fifty students compared to total population in Lancaster University that reach more than twelve thousand students. It is recommended to conduct further study with more respondents while also differentiate the undergraduate and postgraduate respondents to gain deeper insight. In addition, to complement the process map as the descriptive aspects of process design, analytical aspect might be conducted by using the analytical queuing models of Little’s Law to improve in minimising the lead times as one of the order qualifiers factor.

References
Bookshop.blackwell.co.uk, (2015). Blackwell's About us. [online] Available at: http://bookshop.blackwell.co.uk/stores/blackwell-university-lancaster/about-us/ [Accessed
2 Dec. 2015].
Heyl, J. (2011). Layout Strategies. Available at: http://www.slideshare.net/hunjoo14/layoutstrategies-39798834
Jones, R. and O'brien, L. (2004). Operation and Business Systems Management. Harlow:
Pearson.
Millan, C. (2015) Lancaster University Blackwell’s Manager Interview, Interviewed by
Operation Management Group 8, Blackwell’s Bookshop, 20 November
Neely, A. (2007). Business Performance Measurement: Unifying Theory and Integrating
Practise. 1st ed. [ebook] New York: Cambridge University Press. Available at: http://www.alnap.org/pool/files/business-performance-measurement-andy-neely-(ed-).pdf [Accessed 2 Dec. 2015].
Slack, N., Brandon-Jones, A. and Johnston, R. (2013). Operations management. 7th ed.
Harlow: Pearson.

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Appendices

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