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Operations & production management.

Operations & production management

When it comes to grocery retailing, Spain’s Canary Islands are like a throwback to the UK in the 1950s. Large supermarkets are virtually non-existent. Instead, groceries are mainly sold through Spar-type neighbourhood shops or family owned mini-markets. Almost all the main residential developments in the Canary Islands have at least one of these shops. As a result, few of the islands’ many holiday apartments are more than two or three hundred metres from a ‘sell-everything’ store. No milk for your coffee? No problem – you can be back at your apartment with a chilled litre of half-fat before your caffeine shot has gone cold. Run out of cleaner with the floor half-wiped? The problem is solved in a Flash at the mini-market across the road.

While it all seems so civilized to holidaymakers accustomed, at home, to planning their weekly buy-in with military precision, there are environmental costs. The backbone of the local retail economy is an army of white-van owners, keeping the islands’ thousands of local shops stocked with everything from bread to bananas, or pan to platanos, on a daily basis. It makes the committed environmentalist yearn for articulated supermarket wagons that carry rather more than half a dozen donuts and a box of Mars bars.

The giant supermarket companies do, of course, have much to answer for in terms of their environmental impact. But consumer pressure is beginning to tell and all the main chains have now adopted a green agenda. Asda, for example, was named Multiple Environmental Retailer of the Year in the 2007 UK retail-industry awards, for its commitment to: reducing its own-brand food-packaging weight and carrier-bag use by a quarter by the end of next year; sending no waste to landfill by 2010; and reducing carbon-dioxide emissions from stores and depots by 20% by 2012.

Birchall (Financial Times, 10 Sep 2007) provides examples of projects that Asda’s US parent, Wal-Mart, has been implementing in an attempt to rebrand itself as a corporation concerned about the environment. They include cutting the prices of environmental products and pressing for the adoption of full carbon accounting. The company has named three chemicals, used in cleaning products and insecticides, which it wants its suppliers to phase out.

Such is the buying power of Wal-Mart that when the corporation shouts, its suppliers jump to attention – even if this means varying the product they sell in the US market from the version they offer in the rest of the world. Sometimes these variations in product content or design are driven by consumer pressure, sometimes by legislation. Accommodating them is one aspect of the flexibility that modern producers need to possess.

Bruce et al. (The Journal of Product Innovation Management, Sep 2007, Vol 24 No 5) examine the factors that influence the global product-launch process, using Microsoft’s Xbox launch to show how different regions respond. The article reveals that a company’s ability to understand design issues for each region of the world, and respond by customization, is crucial.

One example from the world of literature proves illuminating. J. K. Rowling’s first Harry Potter book, Harry Potter and the Philosopher’s Stone, was sold in the USA with the title Harry Potter and the Sorcerer’s Stone because marketers believed that the word ‘philosopher’ could fail to attract the novel’s target readers in the USA. The eagerness with which young readers devoured the book on both sides of the Atlantic shows that the marketers probably got it right.