D1: Evaluate How Managing Resources and Controlling Budgets Can Improve the Performance of Asda.
It’s important for Asda to manage all its resources and control its budgets so that they can be successful. Managing resources and budgets gives Asda more structure and allow Asda to be more stable which can lead to a high performance and success. If resources and budgets are not controlled then problems could occur for Asda, which then could lead to bad performance and failure.
Managing the human resources can help to build more reliable and hardworking employees. If they can manage their human resources the right way it can lead to highly motivated and skilled staff and can defiantly improve performance. E.g. at Asda it’s important to provide staff with incentives so that they feel their work is being valued and they will want to work harder to achieve targets, Asda have to treat their staff right because if they feel like they are being harshly treated then they will take out their feelings on the customers and then Asda will lose custom from that store, also they give employees pride to work for the company. I believe that if the management of the human resources department is done in the right way then it can be an important factor for what success a business will have. If the staff are well trained and looked after, they will provide better customer service which will bring more customers there so they will make more money but just doing that one task is nit enough, staff will also need to re-stock shelves that are bare and they would have to do that quickly so that there is always fresh food for customers to buy, staff will also need to multitask so being able to do the job they are doing while helping a customer at the same time. Managing physical can have big say in how much money Asda spend, ensuring that the building and the space inside is well maintained helps Asda work more efficiently because customers will be pleased about changes made therefore it will give them a reason to shop at Asda regularly and also it will make the staff pleased and encourage them to work more efficiently. It is important to have all equipment working properly e.g. machinery in the factories. Otherwise resources will end up being wasted and not used efficiently. The motivation for Asda was to produce 0% of waste going to landfill business and to support everyday low cost. Part of the project as to separate out the food waste from landfill and utilise Asda’s supply chain network to deliver a process that would also avoid increasing landfill costs. They developed 3 separate categories for their food, animal by products Bakery and all other food waste into bio at store. (Taken from http://www.igd.com/our-expertise/Supply-chain/WastePrevention/15943/Asda-Food-waste-diversion/) Technological resources also can have big say in how much money Asda spend, they keep their IT software up to date which will then lead to the system be efficient. This can have an impact on the performance of Asda because if the machinery isn’t working at all this would mean that Asda couldn’t then produce its products, which then leads to no sales and no money being made. Asda will need to also make sure that they have enough tills working so that customers are served quickly, they will also need to maintain their stock control system to see if there are no errors in the system and then update it when it needs updating to keep the flow. By managing its physical and technological resources Asda will have less mistakes in their production, they will be able to cut down their wastage and be able to reduce the amount of stock they hold. An example of this would be in 2006 were Asda had sold £6.8m more own-brand products over the year, after they improved their supply chain software enabling it to bring products to market more quickly, this was important because at the time in the UK own brand product had brought, the big five supermarkets, 45% of their sales.
Asda need to controlling costs and budgets is essential so that they are not overspending on the budget that is available. Budgets need to be planned carefully in advance and events need to be added such as double discount days for their staff, so the business knows exactly how much money is available to spend on the specific department or whether they can invest on a new product in order for a budget to be agreed on. This will ensure that enough money is available for each department to carry out their jobs to achieve their overall aims. If costs and budgets are not correctly controlled then the business may overspend and end up in debt. If Asda doesn’t pay their food suppliers on time they would risk that food supplies would not be delivered to their stores causing customers to be unhappy and not buy because their products aren’t available therefore Asda would be losing money instead of making it. Asda will need to use emergency funds if there was for an example a fire in the store in order to pay for the damage etc., they will also have to take out less loan so that they are not getting charged more and more by the bank, they might have to cut down on the maintenance but that could lead to dysfunctions in the production line. I think if Asda can aid ways to cut their costs they will be able to maximize their profits and stay in business, by boosting the profits they can help invest into new products or be able to expand by making new stores but, by cutting cost Asda are could be damaging other departments that help them make the money that they do, also, I think that if costs are not monitored and if Asda doesn’t have a budget then Asda will never know the exact amount of money they will have available without causing its revenue to be at risk.