Managing the operations of Hypermarkets using the BSC approach

The word ‘Hypermarket’ speaks for itself the level of ‘intensity’ and ‘functioning’ that goes in the background to make things work in this place

These are places which house an incredibly large range of products enabling its visitors gets nearly all that they need. Quite expectedly hypermarkets work on the principle- ‘you name it, we have it’.

Owing to the very wide variety of stuff that is placed on the slabs, operating a hypermarket successfully can be a mammoth task. An issue that stands tall and demands immediate attention is the ‘management’ of such a place. Underestimating the job in any way can lead to problems raising their head’ in no time. This is turn, can even mark the sealing of fate for the store, in extreme cases.

Deciding the model on which the store would be operated is another subject that deserves appreciable attention. In a large number of such locations, the revenue model followed is that of ‘high-volume, low margins’. However, the rising competition in this field makes ‘distinguishing own’ from the crowd a difficult job. Consequently, being on the ‘path often treaded’ does not serve the purpose and a constant quest for devising ways to lure maximum number of visitors is on.

Further, apart from this challenging situation that comes ‘embedded’ in a business as large as hypermarket, legal issues also do creep in. These further lead to constricted situations that prevent the expansion of these huge markets. For instance, stores operating at smaller scale than hypermarkets face a substantial threat from these warehouses. Subsequently, government has often entered such scenarios in many nations to ensure that uniform growth structure and prospects are available for all retail industry players, irrespective of the size.

Moving on, the level of integration with the operations of suppliers too is a significant factor. Stocks should be sufficient in quantity to avoid the dangerous situation of ‘stock out’ that causes negative reputation. For this, automation of logistics processes is the only way out. So, one needs to spend appropriate amounts in carrying out this.

Moreover, the never ending list of items that needs to be collected adds to the complexity of the job. Besides this, yet another entrant is the picture is the ‘handling of workforce’. Consequently, the issue of ‘managing human resources’ stares in the face of the manager to be paid attention to.

However, one can pacify the complications involved by embracing a performance management and measurement tool, i.e. BSC. The perspectives that can be put together for overcoming these hurdles are the ones relating to- Logistics and Suppliers, Social Benefits, Human Resources and Internal Operations.

The indicators for ‘Logistics and Suppliers’ Perspective are- ‘number of suppliers’, ‘logistics position’, ‘number of distribution centers’ and ‘average integration degree’. Internal Operations can be measured using KPIs like ‘area covered’, ‘number of customers served in one year’, ‘number of associates’ and ‘efficiency increase’. Social Benefits Perspective can be measured using the indicators like ‘number of disaster distribution centers’, ‘number of volunteerism programs conducted in one year’, ‘number of volunteer hours’ and ‘number of environment preferable products offered’. Human Resources perspective can be obtained using KPIs such as ‘percentage increase in training rate’, ‘average absence rate’, ‘average competence level’ and ‘cost: benefit ratio per employee’. By using the accuracy offered by BSC direction, one can tame the ‘loads of issues’ that are normally experienced in running a Hypermarket.