Supply Chain Strategy and Management

This assignment delves into the crucial aspects of supply chain strategy and management. It examines various strategic approaches, highlighting their significance in achieving a competitive edge. The importance of lean principles in optimizing supply chain processes is also discussed, along with real-world examples and case studies illustrating successful implementations.

Management Report

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1. Critical assessment of supply chain strategy into the organization.........................................3
2. Critically evaluate the key environmental challenges that has affected the supply chain
strategy of the organisation.........................................................................................................5
3. Evaluate the sustainability of supply chain.............................................................................7
4. POWERPOINT PRESENTATION........................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Supply chain strategy helps in developing and executing strategies that helps in
efficiently integrating the management players of supply chain that includes suppliers,
manufacturers, customers and distributors. Supply chain strategy helps in production and
distribution at the lowest possible cost by effectively reaching large range of customers across
the globe.
Tesco plc is one of the leading retail industry which was founded in the year 1919 by
Jack Cohen. It mainly deals in groceries, toys, furniture, home appliance, financial services,
telecom, software, clothing, petrol and electronics.
This study will critically evaluate the supply chain strategy in the organizational context.
It also critically evaluate the key environmental challenges that affected the supply chain strategy
of the organisation. It further evaluates, whether the present supply chain strategy of the
organization is sustainable or not by critically evaluating with range academic frameworks.
Furthermore, it also highlights two strategic supply chain options to ensure the success of your
organisation in the future which helps in smooth functioning of the organization which leads to
higher operational efficiency, performance and productivity.
MAIN BODY
1. Critical assessment of supply chain strategy into the organization.
Supply chain strategy is the integration of all management players of supply chain that
includes suppliers, manufacturers, customers and distributors at the lowest possible cost
effectively and efficiently. Effective supply chain strategy helps in reaching large market share
which leads to higher competitive advantage and long term sustainable growth and development
of the business (Supply Chain Strategy and Design, 2019). Supply chain strategy helps in
identifying how the company will function in a dynamic changing environment which helps in
satisfying customer needs and also helps in attainment of organizational goals and objectives.
Success of the retail company like Tesco has always been dependent on the supply chain
strategy. Effective implementation of Supply chain strategy into the organization helps in
delivering quality goods and services to the customers at lower price which leads to higher
operational efficiency, performance and productivity. Effective supply chain strategy helps in

transforming raw material into finished goods and making goods available to the customers by
effectively building strong supply chain (Dubey and et.al., 2017).
Tesco focuses on using lean supply chain strategy which leads to higher operational
efficiency, performance and productivity to reach large number of customers in their market at
low cost effectively and efficiently (Giannakis and Papadopoulos, 2016).
 Lean supply chain strategy: This supply chain strategy helps in removing unwanted and
waste components or substances from the process (rotopappa-Sieke, Thonemann, and
Segmentation, 2017). Lean supply chain strategy helps in identifying valuable and non-
valuable part of supply chain which leads to higher operational efficiency for Tesco plc.
This supply chain strategy helps in eliminating non valuable components from the
process to reduce wastage and minimise cost by identifying unproductive parts in the
process. The key elements of lean supply chain strategy constitute of warehouse,
transportation, distributors and customers (Lean Supply Chain Management, 2019).
Lean supply chain strategy helps in reducing cost and lowering wastage. Lean supply chain
strategy helps Tesco plc in minimizing wastage by effectively using just in time approach which
helps in delivering only that amount of goods which is demanded in the market (Purvis and et.al.,
2016). Delivering of large number of inventories is wasteful for the company resources. Lean
supply chain strategy helps in delivering products and services to the customers at the right time,
at the right place and at the right quantity. This supply chain strategy also helps Tesco plc in
enhancing customer relationship through lean infrastructure (Swink and et.al., 2017). On the
contrary, lean supply chain strategy has a little room for error but the failure in labour and
equipment can adversely affect the entire operations of the business. It may also lead to delivery
inconsistency which may hinder the customer relationship which shifts customer focus towards
competitors which leads to lower revenue and profits for Tesco plc.
 Agile supply chain strategy: This supply chain strategy is highly flexible as it helps in
quickly adapting to the changing environment like economic swings, change in customer
preference, change in technology (Ciccullo and et.al., 2018). Agile supply chain strategy
focuses on speed, cost efficiency, flexibility, productivity and responsiveness in the
process of production and distribution of goods. Agile supply chain strategy helps Tesco
Plc. In making effective decision in accordance to the day to day operations of business

and also helps in eliminating waste of excess inventory and also anticipate potential
shortages in the future (Supply Chain Strategy: Back to Basics, 2019).
As Tesco is constantly changing as per the needs and demand of the customers because needs
and wants of the customer are constantly changing and they need to design new products to
remain competitive in the market. New design and products are launched as per the customer as
they will have wide range of products to choose from (Cheung and et.al., 2018). Adaption of
agile supply chain strategy helps Tesco in responding to change quickly which will give the
competitive advantage and also leads to long term sustainable growth and development of the
company. On the contrary, shortage in supply will occur in case there is a growth in the demand
of products both in terms of volume and variety. It is also difficult for Tesco plc. to track the
progress of the business because of the resource planning in accordance with cost, time, etc.
Tesco plc aim at lowering the cost and wastage of goods and services by implementing
lean supply chain strategy. It has been realised that, Tesco plc has high operational cost which is
the major challenge for the company to effectively operate their business. Tesco plc aim at
delivering high quality goods and services to the customers and they have high cost attached to
the production process (Christopher, Harrison and van Hoek, 2016). It is difficult for the
company to mitigate risk effectively to lower the cost by focusing on more important task.
Tesco plc. has wide range of operation all across the globe which makes it difficult for
the company to estimate the demand of the products. Agile supply chain strategy was
implemented by Tesco plc to effectively evaluate the needs and demand of the product by in
depth understanding of the market (Tarafdar and Qrunfleh, 2017). On the contrary, this supply
chain strategy helps Tesco plc in eliminating the wastage and delivering goods to the customer
according to the market demand. The management of supply chain must critically evaluate the
risk and understand the demand cycle in accordance with changing market opportunities.
Tesco plc aims at aligning the supply chain with the goals and objectives of the business
by effectively integrating sales and operation in corporation with business planning (6 Strategies
for Better Supply Chain Management in the Current Economy, 2017). It aims at adapting to real
time demand which leads to higher sustainability growth and development.

2. Critically evaluate the key environmental challenges that has affected the supply chain
strategy of the organisation.
Tesco plc is one of the most leading retail industry in the work are facing major
challenges ranging from change in customer preference or taste, fast changing technology,
greater focus on quality and price, change in economic, social and environmental factors impose
major challenge on the Tesco plc (Top Five Issues Facing Retail Supply Chains, 2015). Retail
companies are facing major challenge at improvising profit margins for the company as the price
of the raw material are continuously increasing and makes it hard for the company to keep the
price low. Tesco plc aim at delivering quality products and services to the customers and they
have to abide with various laws and standards which is the major challenge for the company.
External environmental challenges Economic factors: Economic factors like economic downturn, recession, inflation, tax
rates, exchange rates, interest rates, demand and supply of goods and services widely
affect the supply chain management of Tesco plc. Lower demand for the goods and
services impose major challenge on the business which leads to lower operational
efficiency and also affect the growth and success of the business. On the contrary,
increase in demand of the products put Tesco plc at an advantageous position which helps
them in increased profit margins. Environmental factors: Environmental factors like company environment, uncertainty
from local market or overseas and government support act as major environmental
challenge for Tesco plc. Company environment is concerned with change in the needs of
customers, increase in the number of competitors. Tesco plc need to deal with
environmental challenges in order to perform effectively in proficient manner. Tesco plc
operates worldwide and has to abide with various laws nationally and internationally for
smooth functioning of the business which is the major challenge for Tesco plc. Social and
cultural uncertainties, use of different technology act as a barrier in the function of supply
chain. Geopolitical factors: Natural disasters and extreme weather conditions like earthquake,
hurricane, thunderstorm, flood, typhoon, etc. adversely affect the supply chain of the
company which leads to lower operational efficiency, performance and productivity.
Various political factors like shortage or unavailability of raw materials or resources

affect the supply chain management and adversely hinders the operations of the Tesco
plc. Political instability, theft, corruption, illicit, trade restrictions, terrorism, piracy are
some major challenges faced by the company which adversely impact the supply chain
management.
Internal environmental challenges Extended value chain risk: Stemming problem between upstream supply chain partners
and downstream supply chain partners (Fernie and Sparks, 2018). There is multitude
business relationship which affect the bottom line. This leads to ineffective distribution of
goods to the end customers. When supply chan of the company is wide it will add various
risk to the company. Increase in the risk of piracy, transportation, management problem,
high operational cost imposes major challenge on Tesco plc. Operational risk: This risk can occur along the supply chain which varies from product
development, manufacturing and to distribution. Operational risk can arise from
development, planning, sourcing, implementing, delivering and return of goods and
services. Operational risk is critical for Tesco plc. Which leads to lower operational
efficiency, performance and productivity (Beal and et.al., 2017, November).
 Functional risk: Functional risk consists of financial, legal, human resource and
information technology risk which adversely affect the supply chain management of the
Tesco plc. Technology are changing at a faster pace and they tend to become obsolete
very quickly. If Tesco plc. do not adapt to new technology, then they will face major
challenge and will not be able to maintain competitive advantage in the market.
Shortcomings of effective and skilful human resource also act as challenge for Tesco plc
which leads to lower operation performance and productivity. Lack of financial funds
hampers the smooth functioning of the organization (Garcia and You, 2015). Non -
compliance with legal laws and standards act as major challenge for the business and
hampers the growth and development of the business.
Tesco plc. tend to use new technology to remain competitive in the market and also aim at
retaining prospective employees in the organization who have desired skills and knowledge in
the particular field which leads to higher operations and productivity. They should also comply
with various laws and standards for effective operations of business.

3. Evaluate the sustainability of supply chain
From the above discussion, we have observed that TESCO have adopted lean supply chain
which are suitable for the company in accomplishing its objectives.
The lean production of the company with efficiency reduce waste within a production
technique. Moreover, sometimes company take a seat on big amount of stock and waste, this
system eliminates obsolete inventory. Simultaneously, with waste reduction, this method of
supply chain also reduces the cost of operation adopted by the company (Zhong and et.al., 2016).
Furthermore, rather than entirely concentrating on the needs of all clients, lean method of
TESCO focuses especially on loyal consumers who are consistent buyers of the company. Thus,
through this technique the company is able to construct study and reliable relationships with
relied on clients and attracts the constant flow of income within the company which gives
competitive advantage to the company to gain huge market share (Cooper, 2017).
Moreover, lean infrastructure of company handles numerous additives: building, gear,
resources, device, and labour to meet urgent inventory demand. Thus, this technique does not
waste any resource in the operation and enable the company to increase its productiveness.
Further, for imposing lean concepts within the organisation TESCO involve stimulant
and participation from their production personnel’s (Boström and et.al., 2015). Thus, through
their participation company will be able to evaluate where the waste and inefficiency is
occurring. However, they not only considered as a resource for the company but employees
normally respond effectively when they are engaged in development processes. However, in the
methods the employee’s ideas and recommendations are included and they feel possession and
pride about their participation which enable company to accomplish its goal.
Furthermore, through lean supply chain, TESCO produces the products according to the
expectations of the customers. However, patrons always look for the merchandise that they
accept as of amazing quality. Thus, lean method permits the manufacturers of the company to
build the quality consumer oriented product whilst additionally preserving up with a different
demand of different customer (Prajogo, Oke and Olhager, 2016). Thus, this technique is
sustainable for the company as by providing the products according to customer needs and
wants, the company can capture huge market share and customer base which enable them to
accomplish their goals.

However, in today's digitized era, TESCO have adopted various advanced machines
which enable them to produce the products on time and meet the demands of the customer
regularly (Jajja and et.al., 2016). Moreover, through various technology company can provide
correct information and facts, which enable the company to make quick choices and preserve
manufacturing flowing.
Further, through this method, TESCO maintains a regular flow of statistics in the course
of the complete supply chain will make certain manufacturing to attain full capacity. Thus, this
could be executed via sharing customer statistics with diverse outside regions of the supply chain
inclusive of providers which permits the whole deliver chain in an effort to reorient with patron
demand (Tarafdar and Qrunfleh, 2017). Thus, through coordinating with supply chain the
company can produce products according to the market trends which in turn increases the sales
of the company and provide competitive advantage to the company in the entire industry.
4. POWERPOINT PRESENTATION
CONCLUSION
From the above study it has been summarized that, supply chain strategy is the
integration of the all management players of supply chain that includes suppliers, manufacturers,
customers and distributors at the lowest possible cost effectively and efficiently. This study
concludes that, Tesco plc adapt to lean management supply chain strategy and agile supply chain
strategy to effectively operate the business which helps Tesco plc in higher sustainable growth
and development. Lean supply chain strategy helps in lowering cost and reducing wastage,
whereas, agile supply chain strategy is flexible and helps in analysing the demand of the market.
It further critically evaluates the major environmental challenges (including internal and
external factors) like social responsibility, economic factors, technological change,
infrastructure, resources, legal factors, operational risk, functional risk which affect the supply
chain strategy of the organization. Further it has been critically evaluated that, the lean supply
chain strategy and agile supply chain strategy are both sustainable for the organization as it helps
in analysing the needs and demands of customers and also minimize wastage and cost. This
study also helps in analysing that, Tesco plc can opt for physical distribution and inventory
management supply chain for sustainable growth and success of the organization which leads to
higher operational efficiency, performance and productivity.

REFERENCES
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