Productivity Improvement: Evaluating the Supply Chain and Making Recommendations

This study material discusses the evaluation of the supply chain of Tesco Plc and provides recommendations for productivity improvement. It covers topics such as supply chain management, current productivity improvement activities, and strategies for enhancing overall performance and profit margin. Subject: Productivity Improvement

Productivity
Improvement

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1. Evaluate the supply chain of the organisation and make recommendations for the
productivity improvement............................................................................................................3
CONCLUSION................................................................................................................................9
REFERENCES .............................................................................................................................10

INTRODUCTION
Productivity improvement is the process of maximising production in an hour by using
same resources. Basically it means, when company reduces their input and in return they get the
maximise output is called productivity improvident (Chaturvedi, Thakkarand Shankar, 2018).
There are various ways of improving productivity such as capital which enhance the
infrastructure, software etc. Formulate effective strategies for the production will helps in
improving result from the same level of input. In addition, company change their business
model, tools etc. to enhance the productivity. Tesco Plc selected for the better understanding of
the concepts. This assessment covers the various topics such as supply chain management in the
organization and how organization improve the overall productivity of the company. In addition,
it includes the current productivity improvement activity such as Tesco told their managers to be
nice with the employees and it will encourage them to be productive for the company. It further
helps Tesco’s managers to improve their productivity as well as profitability. Along with this,
there are some recommendations to improve their operational activities in order to enhance
overall performance and profit margin.
MAIN BODY
Overview of the company:
Tesco Plc is a multinational British company which deals in groceries & general
merchant items. Its headquarter situated in Welwyn Garden City, Hertfordshire, England, United
Kingdom. Tesco is the 3rd largest retail sector company in the world in terms of gross revenue
and on 9th position in the world on the basis of revenue (Tesco Plc, 2020). In the UK, company
has 28.4% market share and have huge competition and their competitors are ASDA,
Sainsbury's, Morrisons, The co-operative food etc. Tesco Plc founded in 1919 and it was
founded by John Cohen.
1. Evaluate the supply chain of the organisation and make recommendations for the productivity
improvement
Supply chain is the process of networking which include the people, resources, activities,
information, product & services, technology etc. All aspects involved in the supply chain from
sales of products to the delivery of goods to the end users. Basically, supply chain include the
process of moving goods & services from the suppliers to the customers (Current productivity

improvement activity, 2020). In the organizational context, it has been analysis that supply chain
management is the practice which help the organization to maintain various activities such as
storage of raw material, work in progress inventory and finished goods transfer from the point of
origin to the point of consumption.
In context of Tesco, they have their own supply chain & distribution network. Every store
of Tesco offers range of products and each products has different operating cost. Tesco
distributed around 3 billion of goods to the worldwide stores and they focus on their customers
through understanding their needs. Tesco's supply chain division co-ordinate with trucks, train,
ships and planes for the global distribution of products. In the UK market, there are around 6500
stores and more than 475000 employees work in these stores. They offer wide range of products
for their consumers and ensure to meet their expectations (Dave and Sohani, 2019).
Above bar graph is indicating the number of TESCO stores worldwoide. In 2008 there
was 3751 stores of tesco around the globe. This number increases as the time passes and in 2014,
there was more than 7000 stores of tesco around the world. As per the updated information, in
2019 tesco has more than 6900 stores around the world.

With the help of effective supply chain, organization improve their productivity. Such as
Tesco company give their extra efforts to improve supply chain management which further
improve their productivity as well as profitability of the company. Tesco's excellence based on
the following three factors such as:
 Increase the availability of products for their consumers it helps in retaining customers
for the longer period. If people does not find product in the stores, then they will shift on
its substitute or their competitors’ products that is not beneficial for the company because
it affects the profitability of the Tesco. It is the important factors which analyse to
improve supply chain of the company (Durdyev, Ismail and Kandymov, 2018).
Above given picture is showing the tesco recent perfromance. From the above graph, it can
be summarised that operatingh profit of company increases gradually from 2015 to 2019 which
is a result of increase sacle and size of company’s operations.
 Using business scale, organization able to reduce the waste of food and ensure about
product quality and the freshness. Basically, Tesco have to implement such strategies
which reduce the wastage as well as improve the product quality which satisfy the
customer more as well as occur lower cost of production for the company or improve
supply chain productivity which maximise the profit.

 Improve the efficiency as well as effectiveness with the help of making their business
stable through maintaining partnership with the suppliers. It is very essential for the
business to build strong relationship with suppliers which provide them long term
sustainability in term of providing raw material. Further it improves the productivity of
supply chain that is beneficial for the organisation (Fozer and et.al., 2019).
With the help of above three factors, Tesco able to improve productivity that is beneficial
for the organizations. Other than this, company formulate different teams who manage all the
activities and ensure that every function will improve the performance. In the Tesco, there are
four types of teams in the supply chain and it is discussed below:
Development & Blueprint team: This team focus on the ensuring product availability at
the time of reducing wastage of food. In the Tesco, innovation is the competitive advantage for
the company where they use supply chain analytical as a problem solving method. Company use
the 100 million British pound for the supply chain analytics. This team work with the other
supply chain teams in order to develop the supply chain of Tesco at global level. In 2011,
company was working with 2degree network in order to develop online hub and they target to
reduce the supply chain carbon footprint by 30% in 2020 (Krishnan and et.al., 2018).
Supplier ordering team: Tesco order around 30 million cases of food on weekly basis
from their suppliers. Suppliers and purchasing team plan to manufacture or supply products to
the Tesco in order to target the group. It is one of the largest retail sector company of UK which
generate huge revenue due to its effective or owned supply or distribution channel.
Store ordering team: Main purpose of forming this group is to order store items and
ensure that product availability always maintain. Store managers of Tesco build strategies and it
was based on the demand of customers and they ensure that customers are satisfy with the
products and they get everything from the stores which they want.
Security & loss preventing team: In this team, members ensure that all the safety
standard have to followed by the company which provide safe working environment. Theft in
supermarket are the main aspect of targeting which managed by the security & loss preventing
team (Kumar and Singh, 2018).
Flaw in supply chain:
There are some common problems which faced by the supply chain of Tesco company
such as lack of traceability, difficulties to maintain the safety as well as quality of goods (Flaws

in supply chain, 2020). In addition, increase in the cost of supply chain also affect the
productivity of the company along with profitability.
Above mention teams help the Tesco to supply chain of the company and ensure that they
manage each activity which helps in maximising productivity as well as profitability.
According to Trevor Bacon as director of property service of Tesco wants to boost their
productivity around 20% in the next two years (Boost supply chain productivity, 2020). Trevor
has responsibility of contractors or subcontractors who are collaborating with supply chain in
order to minimise waste in constructions. Retailers get the various benefits due to innovating
buildings which includes offsite constructions of pods, modular buildings, standard design and in
house staff rooms. In addition, Mr. Bacon said that, contractors need to be more responsible
because it helps in encouraging further staff to perform well or able to improve their work
(Moore, 2019).
Productivity Improvement Project:
Tesco's original Steering Wheel include four perspective such as finance, operations,
customer and people. Every perspective of the organization include some strategic goals and they
all are set on the high priories of the business. For example operations perspective include
some strategic goals such as work is easier for the staff members, shopping is better for the
consumers, the way company operate is cheaper, safe and responsible for the Tesco.

Illustration 1: Steering Wheel, 2020.
(Source: Steering Wheel, 2020)
Above mention Steering Wheel shows the different perspective that is beneficial for the
organisation and these strategic goals implement by the organization in order to improve the
productivity as well as profitability. Remaining perspectives are customer, people and finance
that are essential to focus and implement in well manner.
From the above analysis it has been evaluated that Tesco is facing the problem of lower
productivity and it is very important for the management to take effective steps for the resolution

of this problem. For this purpose, appropriate theories and concepts could be used by the top
level executives to find ways to improve productivity. By paying attention towards development
of business the managers can improve involvement of staff in their work so that overall
productivity of business could be enhanced.
Theories or concepts which can be used by the organizations to improve their productivity:
Hill framework: It is one of the main theory which could be implemented by Tesco for
the purpose of enhancing its quality. According to this framework the operations executives
should act and think in strategic mode rather then reactive manner. By adopting it the company
can enhance its productivity. There are various steps of it which are required to be followed
while implementing it. Description of all of them is as follows:
 Corporate objectives: It is the first stage of hill framework where the managers of Tesco
will be required to formulate objectives for the organisation so that business can attain
success. The managers have formed the objective of increasing productivity for which
they want to formulate effective strategy (Nuccio and et.al., 2018).
 Marketing strategy: It is the second step of the framework where the managers will be
required to formulate a new marketing strategy which can help to attract large number of
customers. With the help of it, Tesco can enhance its sales and increase funds to carry out
operations so that productivity could be increased.
 Winning orders in the market: It is the third stage of hill framework in which
organisations try to sale the products in the market. Here, managers of Tesco will be

required to pay attention towards price, quality, delivery and its services. With the help of
all of them different orders could be won by the company (Pheng and Meng, 2018).
 Process choices: When orders are received by organisation then managers are
responsible to select the processes which will be followed by them to meet expectations
of clients. Management in Tesco are responsible to deliver all the services in best
possible manner to the clients so that growth could be acquired.
 Infrastructure: It is the last stage of Hill framework where the managers of Tesco will
be responsible make sure that they arrange the infrastructure of organisation properly. It
will help the staff to perform their jobs properly and increase productivity of whole entity
(Purba and Aisyah, 2018).
Four level model: It is also a model which could be implemented by companies to
enhance their productivity. There are four different level of it which are as follows and could be
used by Tesco to improve the productivity:
 Inspection: It is the first level of the model where the managers oLean principlesf Tesco
will be responsible to inspect all the activities that are performed by it to carry out
operations. With the help of it, they will be able to identify all the errors that are resulting
in lower productivity (Purba, Jemali and Nugeroho, 2018).
 Quality control: It is the second level of the model where the managers of Tesco will be
responsible to control quality of all the products and services which are sold by it to the
customers. It will help them to increase the chances of higher productivity as it will help
them to ignore the possibility of bad quality of goods and facilities.
 Quality assurance: This level of the model is concerned with the assurance of quality of
all the items which are sold by Tesco. By assuring that all the products are having good
quality the managers can enhance productivity of organisation. On the other hand, this
level also guides to determine that all the staff members are performing their jobs
properly or not. It will help the managers to analyse the errors in their roles and then
formulate effective decisions to improve their performance. When workforce will
perform properly then productivity of the enterprise could be increased (Ramirez-Mora
and Oktaba, 2018).
 Total quality management: It is the last level of the model which is mainly concerned
with management of the quality. It guides the managers to make sure that they establish a

positive working environment for employees so that they can work effectively to achieve
organisational goals. By using it management of Tesco will be able to enhance
productivity of company because it results in higher customer satisfaction by providing
them such products that they are willing to buy with good quality. It is mainly focused
with continuous improvement which may lead an organisation towards success.
Lean principles: It is a operation management approach which is used by business
entities for the purpose of attaining high level of productivity. There are five different elements
of it which are discussed below in context of Tesco for productivity improvement:
 Identifying value: This principle is mainly concerned with defining and identification of
customer value which should be focused by an organisation to reach the business goals.
By paying attention towards it Tesco will be able to analyse the key elements which
should be focused by it to enhance productivity (Reed and et.al., 2018).
 Mapping the value stream: It is second principle of lean which should also be focused
by the managers of Tesco to make sure that they formulate strategies to meet the desired
value. It will be beneficial to enhance productivity of whole organisation.
 Creating flow: This lean principle is mainly concerned with the ways which could be
used by companies to find ways to maximise efficiency and reduce waste. It will also be
beneficial for Tesco to enhance its productivity and meet business goals.

 Establishing pull: This principle is mainly focused with considering perspective of
customers while delivering products or services to them. While implementing it the
managers will be required to pay attention towards supply chain, products and services so
that the desired level of success cold be acquired by Tesco.
 Seeking perfection: It is last principle of lean which is mainly focused with the
identification of areas of improvements that can help to formulate effective strategies for
development of business and productivity enhancement (Sumner, 2018).
From the above discussion it has been evaluated that there are various types of
frameworks which could be used by Tesco for the purpose of enhancing productivity. It is very
important for all the companies to make sure that effective and highly productive steps are taken
for the development of business. While carrying out operations application of lean principles and
four level model could be performed. By using them Tesco will be able to attain growth and find
solutions for the problem of decreased productivity.
Recommendations:
There are various ways to improve productivity of the Tesco that is beneficial as well as
profitable for the organization. From the above discussion, it has been recommended that
company have to take necessary steps which mentioned below:
 Tesco should adopt Hill framework which helps in focusing various aspects of business
such as corporate strategies, marketing, manufacturing strategy and order winning
criteria. Operations executives are in strategic mode rather then in reactive manner
because effective formulation of strategies helps in providing better output or improve
overall productivity.
 Tesco has to improve their strength such as technology advancement to minimise the
traceability problems. They have to more focus on online shopping and make it easier for
the customers to increases demand. Basically, they need to focus on their strength to
improve overall performance and productivity.
 Company can negotiate with the UK government regarding grants which helps in
covering supply chain cost because Tesco provide huge employment opportunity to UK's
citizens. Minimize the cost will help in improving productivity of company (Wagner and
Ruhe, 2018).

 Open stores in the other countries will minimise the dependency on UK's market and it
will be possible through effective supply chain strategies. So management of Tesco
should prepare strategy to expand their operations which make them able to generate
more revenue as well as improve productivity.
 One of the effective way to improve operational efficiency as well as productivity is to
provide training to their staff or make them skilled. Because use of latest technology or
equipment required skilled people to handle that process, so they need to provide proper
training for the development of individuals (Yang, Yang and Sun, 2018).
CONCLUSION
From the above discussion it has been concluded that organization has to follow various
strategies and implement it in well manner to improve the productivity of the company. By using
supply chain, organization able to manage their resources and delivered from the point of origin
to the point of consumption. Organization have to update their strategies and build their goals
accordingly. It is also observed that, for the productivity improvement companies are required to
focus upon financial, operations, customer and people perspective. There are various theories
and concepts which could be adopted by business entities to improve productivity. These are Hill
Framework, Four level model, lean principles etc.

REFERENCES
Books & Journals
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affecting construction labor productivity. Journal of Construction Engineering and
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Krishnan, S. & et.al., (2018). Bottleneck identification in a tyre manufacturing plant using
simulation analysis and productivity improvement. Materials Today: Proceedings.
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Kumar, R., & Singh, I. (2018). Productivity improvement of micro EDM process by improvised
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Moore, M. L. (2019). Productivity Improvement in Government: The Effects of Departmental vs
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Nuccio, M. L. & et.al., (2018). Where are the drought tolerant crops? An assessment of more
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Pheng, L. S., & Meng, C. Y. (2018). Managing productivity in construction: JIT operations and
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Purba, H. H., & Aisyah, S. (2018). Productivity improvement picking order by appropriate
method, value stream mapping analysis, and storage design: a case study in automotive
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Purba, H. H., Jemali, S. E., & Nugeroho, A. A. U. (2018). Productivity improvement with
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Ramirez-Mora, S. L., & Oktaba, H. (2018, September). Team maturity in agile software
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