Logistics and Supply Chain Management: Concepts, Principles, and Processes in an Organisational Context

This report explores the key concepts, principles, and processes of Logistics and Supply Chain Management in an organisational context. It critically analyses how supply chain strategy can contribute to competitiveness and evaluates the issues associated with its development. The report focuses on Tesco Plc, a multinational grocery store headquartered in England, and outlines the supply chain processes followed by the company. It also discusses the interrelationships between supply chain and various other areas of the organisation for future success.

Logistics and Supply Chain
Management

TABLE OF CONTENTS
.........................................................................................................................................................1
INTRODUCTION ..........................................................................................................................3
LMX THEROY...............................................................................................................................3
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Supply chain management is defined as the centralized management of having the better
flow of goods and services. This includes the converting of the raw material into the finished
goods and supplying those goods in the market. The company must manage the supply chain that
helps them to cut off the cost and deliver the products to consumer. The current report is based
on the Tesco Plc which is the multinational grocery store having its headquartered in Welwyn
Garden City, England. The current report will outline the concepts, principles and processes of
the supply chain. Furthermore the study will critically analyse how supply chain might helps in
increasing competitiveness of the firm in long run. Moreover, certain issues that are faced by
the firm in developing effective supply chain strategy will also be discussed under this report in
detail. Lastly, interrelationships between supply chain and various other areas of the
organisation for the future success had also been analysed under this report.
MAIN BODY
Exploring key supply chain concepts, principles, and processes in an organisational context
The major goal of any supply chain is to provide high quality products efficiently and
timely through fulfilling customer demands. Also, in context of Tesco it can be said that supply
chain helps in making the goods available through applying various strategies within the
workplace in the systematic manner so that there are no problems in the production process.
Moreover, it can be said that there are various key concepts that are related with value chain
such as logistics management which means supplying right product at the right time. Other
than this other supply chain concepts includes supply chain management , value chain ,
distribution channel etc. that is also used in every type of organisation (Tokar and Swink,
2019) . Thus, all these concepts together defines the way in which supply chain activities are
carried out by the firm so that maximum revenues might be generated within the limited time
frame and there is minimum wastage of resources. Furthermore, below is the list of supply
chain process that is been followed in Tesco for making the goods available in best of manner.
Planning : It is the method where effective long and short range supply chain
strategies are been created. Also, through proper supply chain planning predication relating to
the customer demand and effective supply chain strategies might be developed for the future
undertaking of several activities. Also, planning in Tesco is done by top management

according to total resources available and overall availability of time so that smooth flow of
activities might be undertaken.
Procurement: It is method where the focus is developed on estimating the requirement
of purchase of various raw materials, goods and components (Del Giudice and et.al., 2020.).
Furthermore, Tesco appointed team need to ensure that all the raw materials that are made
available are best in quality so that better final output might be delivered in the end to
customers. Moreover, procurement stage indicates that firm is responsible in overseeing
various activities that are related with final production so that right quantity of good is made
available in supply chain networks within the firm.
Production: This is step in supply chain process where it involves conversion,
assembly and manufacturing of final products for the company. Moreover, the supply chain
managers in Tesco provides production support and ensures that all the raw materials are made
timely available whenever in need. Also, if production process is not carried out in right
manner than there are higher chances that there would be only low quality output that would
further affect sales of the business in the long run.
Distribution: Under this stage process managers monitor flow of goods across the
supply chain so that goods might be flown quickly and safely from point of demand till final
consumption. Also, for distribution channel there are various companies that are involved such
as transportation, logistics, wholesalers etc (Brinch, 2018). that are responsible for ensuring
that goods are made available to large number of people of Tesco located in different parts of
the world.
Customer interface: This is the last stage under supply chain process where certain
issues that are related with satisfying the customer needs, customer interactions and fulfilling
the orders perfectly are taken into consideration. Moreover, it is essential as the whole supply
chain process is dependent on customer choices and needs.
Furthermore, there are certain principles also used in the supply chain process that are applied
by Tesco so that best practices might be followed by its SCM professionals. Moreover, some
of them are briefly described as follows:
Principle1 : It states that customer needs to be segmented based on their service needs
and accordingly supply chain need to serve these segments properly and profitability. Also,
through this supply chain than might be able to focus on devising the best strategies to meet

the expectations of these group of people. Moreover, this is success for Tesco as it would allow
in maximising efficiency of the existing supply chain in best of manner.
Principle 2: It is based on belief that company needs to customize the overall logistics
network based on the service requirements and related to the profitability of the customer
segments. Also, through customize the logistics and making certain modifications the firm
ensures that it is capable to reach to maximum number of customers in against of competitors
that are existing in the market.
Principle 3: This principle states that company need to listen to the market signals and
the align the demand planning accordingly across the overall supply chain through optimal
resource allocation and ensuring the consistent market forecasts.
Principle 4: Under this principle all the IT projects of the company need to support the
multi level decision making so that proper understanding of the process might be done and also
through analysing the inefficiencies the company would be able to determine the kind of
innovation that is required in the company (Wieland, 2021). However, this practice might be
failure for Tesco if the IT team is less skill efficient and unable to analyse the defects within
the whole process. Although this might be failure but through skilled workforce this might be
positive factor for the firm success.
Principle 5: The company should adapt to both services and financial metrics so that
customer profitability might be determined . Also, time driven activity based costing helps in
understanding changes within the activities, product, processes and customers.
Critically analysing how supply chain strategy can contribute to the competitiveness
It is known that best supply chain strategy within the organisation always leads to more
cost savings and greater profitability within the firm. Also, best supply chain strategy within the
firm might leads to following results:
Enhancing the output: The best supply chain strategy helps in maximising the
overall productivity of the business . Also, the supply chain managers in Tesco are responsible
for monitoring all the production processes and ensuring that all the processes are efficiently
utilized. Thus, according to El Baz, Laguir and Stekelorum, (2018) best supply chain is one that
is related with maximizing the overall output so that higher productivity levels within the
organisation might be assured. Moreover, with increased in the output means that firm would

able able to attract more number of the customer for the business that is essential for the growth
and success
Avoid delay in the process: The major advantage of the best supply chain strategy is
that it avoid any delay relating with the business (Waters, 2019. ). Also, for best supply chain
the manager ensures that all the materials made are acquired on time without any kind of
uninterrupted in between. Moreover, proper regulation of the delivery and logistics of the
business helps in promoting the business in good manner in target customers too. Furthermore,
through delay in the process Tesco would be able to devise better strategies and conduct
effective future planning in the future
Better collaboration: According to Lai, Sun and Ren (2018) process of the supply chain
helps in the ensuring better collaboration among the various parties of the business. Also, to
avoid any kind of conflicts and dispute it is focused on developing the proper communication
channel within the business. Moreover, through the best flow of information among various
customers, employees and suppliers the firm would be able to enhance the current
understanding that lead in better collaboration. Also, it can be said that through better
collaboration the firm might be able to bring about certain changes within the supply chains
smoothly without much hesitation from various employees working at different levels.
Easily identification of problem areas: Proper supply chain management and the
adopting effective strategy would help Tesco in recognizing the issue that adversely affects the
reputation and profitability of the business (8 Benefits of Supply Chain Management, 2022).
Furthermore, the managers of Tesco would be able to easily identify and track the performance
of various department and identify which department is lacking in delivering its specific
duties. Also, it helps the firm in devising the best risk mitigation strategies that would help the
companies to achieve bets results through avoiding the possible future negative impacts.
However, Paciarotti and Torregiani (2021) sated that if this concept is absent than it would be
difficult for the business firm to detect issues and identify the main reason for the problem for
the same.
Reduced overhead costs: Through more accurately predicting the demand in the market
the company would be able to reduce the overhead costs. Also, these costs might be
optimized through changing the warehouse layout, adopting the right solutions for increasing
the employee productivity and implementing the best inventory management system within the

workplace. Moreover, Shabbir and et.al., (2019) stated that through additional saved cost the
company would be able to utilise it in other important areas that will help in the achieving
overall growth and success in long run. Also, greater reduction in cost would allow the firm to
gain best competitive advantage in the market through its supply chain and it relative strategies.
Furthermore, improved cash flow would also help in implementing the best cost effective
solutions so that there is seamless flow of information , goods and services in the final delivery.
Better vision of the data analytics: Supply chain is truly helpful in delivering high the
competitiveness to Tesco as it helps in managing the stock effectively, monitor the business
performance on timely and regular basis , track all the distribution channels and much more.
Thus, through the supply chain software managers are able to develop contingency plans so
that bets opportunities in the future might be gabbed and the potential risk might be avoided for
the safe running of the business (Giannakis and et.al., 2018). Moreover, , this factor of the supply
chain is best especially when the business is conducting the operations globally so that
maximum benefits might be derived out of it.
Thus , it cane said that supply chain in any business helps the firm to achieve certain
objectives in timely manner through providing the goods to people that are located in
diversified regions. Also, through link of good suppliers the Tesco is able to remain updated
with the market informations and other sources associated with the business so that business is
bale to grow systematically over the years without causing much business problems. Moreover,
through the best partnership with various distribution centres and the wholesaler the firm is able
to keep additional inventory to meet the changing demands of the customers over the given
period of time.
Critically evaluate the issues associated with development of a supply chain strategy(863)
With proper development of supply chain there are several issues that are been faced by
the Tesco. Also, one of the most common issue is related with the political that create
imbalance within the supply chain. Moreover, there are higher chances that there is increase in
cost of transportation and the fuel prices within the country that might force the business to
make certain modifications within the existing supply chain so that the there are no problems
faced while carrying out the various process of the business (Daneshvar and et.al., 2020).
Furthermore, this political problem faced by the company might be overcome through applying
continuous supply chain model that is built for continuous scheduled delivery of goods.

However, this model might be applied only when there is environment where the supply and
demand stability exists. Thus, through following this model logistics or delivery system of the
company is able to receive and produce various products items within the organisation.
Another major issue that is faced by the company is cultural barrier due to which the
company would not be able to manage differences among the people and there are chances that
there is loss of money, contracts and misunderstandings that would only result in negative
operation of supply chain. Also, due to this Tesco would not able to supply the goods in best
of manner to diverse number of people (Kshetri, 2018). Moreover, to handle cultural differences
the company is need to devise the best strategies so the people are able to respect each other and
devise the best strategies so that supply chain might be maximised. Furthermore, to solve such
type of issue Tesco top management should use the efficient model that focuses that supply
chain of any company might be made effective through proper inventory management and
maximising the output from the labour to the production equipment (Six type of supply chain
models, 2022). Thus, through this model all the culturally different people at the workplace
would be able to develop products that are similar to the competitors and would be able to sell in
more better terms than the rest in the market. Also, to keep the proper inventory management
culturally people would come together so that items in the stock might be checked properly.
Furthermore, another issue with supply chain might be related to the technology where
there there are various new digital technologies that have come up in the market that is focused
on making various production processes faster and effective within the organisation. Moreover,
to overcome such barriers within workplace Tesco should use fast model that is used by the
business manufactures to produce those products that have short market life cycle
(Toorajipour and et.al., 2021) . Also, through this model the Tesco would be able to supply
wide range of products in minimum time span and ensure that company is ready again for the
surviving the next wave of trendy products that is about to exist in the market in near future.
Also, such type of technological changes have to be faced by the company so that it is able to
gain the competitive advantage and positioned itself in the market that is ever-changing.
Moreover, technology from earlier times have always created issues within the supply chain in
terms of delay in the final delivery of various products , decrease in the quality of goods and the
lack of proper availability of the goods at certain places. Also, such supply chain issues are
identified by the top management after the final delivery and the feedback form various sources

thus it creates lot of cost and the time of the organisation in identifying and doing rectification
for the same.
Moreover another most common issue that is faced under development of the supply
chain strategy of any company is social barrier due to which Tesco is not able to focus on
manufacturing various units of the company. Moreover such components includes reducing in
general costs, sustainable productions and environmental practices and much more that forces
the business to look into the current supply chain and make the certain required changes or
modifications for future operations (Xu and et.al., 2020.). Furthermore, such type of problem
faced by the company might be overcome through applying the custom configured model that
is providing on custom configuration at the time of assembly and during the production.
Thus, through this model Tesco supply chain managers would be able to closely analyse
correlation between asset and total cost so that accordingly certain supply chain practice might
be developed so that more people might be attracted towards the business thus increasing the
overall brand value at the same time.
Thus, it can be said that through developing the best supply chain strategy the firm
would be able to conquer large market are in best possible way (Gölgeci and Kuivalainen,
2020). Also, above stated are some of the issues that are been discussed but apart from this
there are several other issues or tariffs that cause hindrance in achievement of short and long
term supply chain objectives . Moreover, these issues need to be quickly resolved by the top
management or supply chain managers otherwise it would only result in increase in the
prices of the old goods that major hindrance factor in the success of the firm
Interrelationship between supply chain and other areas of organization
SCM is the most important management area that the organization must focus on that
helps in improving the raw materials for having the better production. The interrelationship
between the supply chain and other areas of Tesco is described below:
a) Supply chain with production department: Supply chain management is focused by
having the proper flow of goods and services in the market. By having the proper production in
the cited organization helps them to have the proper supply (Plinere and Aleksejeva, 2019). The
production area must keep the record of the supply chain which helps them to know the quantity
of production to be done further. This helps Tesco to have the proper supply and production

which helps to attract the customers. By this it will make the company to have the adequate
production by having the optimum utilization of resources and increases the profitability.
b) Supply chain with sales department: These two areas are widely interrelated with
each other. By having the proper supply of the goods and converting the raw material into the
finished goods helps the company to have proper sales in the wide market (Gao and et.al., 2020).
The sales department of Tesco will let them know about the quantity of products sold in the
market. This will make the company to have supply chain to produce the products accordingly.
This will also help the company to have the best marketing of the products by selling according
to the demand of the customers in the market.
c)Supply chain with purchasing and procurement department: The best supply chain
management is very crucial in the company. This helps the customers to have the proper
availability of the products in the market (Barbosa and et.al., 2018). The better supply chain
management makes the company to have the better production which makes them to meet the
customers demand. SCM helps the suppliers to convert the raw material to finished goods and
delivered to the customers. The procurement department of the company helps to buy the
products and services by ensuring that the suppliers in the organization comply with the
company and legal policies. By having the proper interrelation between both the areas helps the
company to have good profitability in the market.
d) Supply chain with human resources: The human resource department are the
professionals that helps the company to find the best talent. These professionals also includes the
supply chain management professionals that helps Tesco to have proper supply of the products in
the market. The best human resource will make the company to know about the best supply
system which will increase the supply in the market (Soetjipto and et.al., 2021). The human
resources of the company must find the best talent which will lead to increase in the supply of
the products in the market. The best HRM practices will unify the supply chain partners in order
to develop the interrelationships and create the valuable sharing of the knowledge.
e). Supply chain with marketing department : Through supply chain marketing
department would be able to market all its products in most efficient manner . Also, with
proper marketing of various goods and services the firm would be able to utilise the supply
chain of the company in most appropriate way. Moreover, through marketing the firm is able
to identify various stakeholders in supply chain and understand all their roles and target markets

. Furthermore, through marketing the company is able to inform customers about the expertise
of the supply chain and share various experiences, announce the latest news related with the
company, highlight the major successes and much more. Hence, such type of interrelation helps
the company to achieve greater success in time of intense competition through creating brand
awareness among the people about the same.
f) Supply chain with finance department: Finance department is also plays active role in
the supply chain management of any company. Moreover , the information regarding the
amount of funds available, total cost involved in delivering the final products and efficiency of
each department through the overall resources consumed helps the supply chain managers to
develop the strategy that is not only effective but superior than the others in the market (Wong
and et.al., 2020). Also, the finance department in supply chain helps in brining the flexibility
and lowers the cost of capital so that greater innovation and investment in new projects might
be done by the company. Thus, through the finance department the supply chain is in better
position to accommodate or increase in the business so that it might be benefited in the future.
Hence, it can be said that all the departments work together in coordination in Tesco so
that supply chain might be made and developed in best manner. Moreover, if does not happen in
this way than the company would deliver poor customer experience and there would be poor
inventory management. Moreover, Tesco that is operating on the large scale need to carefully
think about this and thus to overcome such drawbacks it should conduct regular meetings to
identify the departmental problems and find solutions for the same.
CONCLUSION
From the above report it can be concluded that supply chain management is crucial yet
most beneficial aspect of every business that wants to provide the best customer experience to
all its targeted customers. Also, in context of Tesco it acne be said that through effective supply
chain the firm had been able to conquer large market area in best way. Moreover the report had
identified certain supply chain process sand explained concepts such as logistics and inventory
management that are related with the supply chain. Moreover, certain failures and success that
are associated with the supply chain principles had also been discussed in detail. Also, the study
had critically analysed how the logistics and the best supply chain strategy contribute in the
competitiveness through presenting various points. Also, certain issues related with
development of supply chain such as cultural, social, technological barrier along with related

model for overcoming it had also been discussed . Lastly, interrelationship of supply chain
with finance, marketing , human resource department etc. had also been identified in this study.

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8 Benefits of Supply Chain Management. 2022. [Online]. Available
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Six type of supply chain models. 2022. [Online]. Available through:<https://www.idb.org/six-
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