Supply Chain Management in Tesco

Supply chain
management

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Customer Service & Inventory........................................................................................................1
How readily product(s)/service(s) of selected organisation are available to customers.............1
Inventory methods opted to improve availability and service level of mentioned company......1
Method of managing stock..........................................................................................................2
Transportation & LSPs....................................................................................................................2
Identify transport mode of supply chain by mentioned company and also provide reason for
opting particular transport mode.................................................................................................2
LSPs method applied by Tesco...................................................................................................3
Supply side transportation and demand side transportation........................................................3
Efficiency of the supply chain transportation in chosen company.............................................3
Warehousing and Capacity..............................................................................................................4
Contribution of warehouses in selected organisation's supply chain..........................................4
Why might managing capacity can be difficult given the "5 steps" involved............................4
How efficient is the supply chain in managing capacity for chosen organisation......................5
Strategy, Competitive Advantage & Conclusion.............................................................................6
Do any aid your chosen organisation’s competitive advantage? If so, how?.............................6
Do any suggest ways in which to improve your chosen organisation’s supply chain? If so,
how?............................................................................................................................................6
What is the overall supply chain strategy used by your chosen organisation? Does it lead to a
competitive advantage? If so, what?...........................................................................................7
CONCLUSION................................................................................................................................7
References:.......................................................................................................................................8

INTRODUCTION
Supply chain management is the management of all inflow and outflow of goods and
services within a company. It consist all those activities which is involved in converting raw
material into finished goods and it also include how company distribute its products and services
to end customers. It is a wide concept which involve all those productive activities which is
necessary to create a customers value for the company(Gong and et. al., 2019). SCM help in
identifying where company is wasting their material and where they are utilizing it properly.
Hence, SCM is important to eliminate the wastage of raw material and other resources which
further help in reducing manufacturing cost of particular product and services. Tesco is a British
supermarket chain of groceries which is headquartered in Welwyn Garden City, United
Kingdom. It was founded by Jack Cohen in the year 1919. following report covers inventory
methods opted by company, determining service level, method of managing stock, transport
mode of supply chain, LSPs method applied by Tesco, analysis of effectiveness of supply chain
transportation of mentioned company, contribution of warehouse in organisation's supply chain
management, procedure of managing capacity and identification of effectiveness in supply chain
management in managing capacity of organisation.
MAIN BODY
Customer Service & Inventory
How readily product(s)/service(s) of selected organisation are available to customers
It is compulsory for every organisation to provide their products and services on timely
basis to their customers without delaying in any situation(Zimon, Tyan and Sroufe, 2019).
Customer value can be created on this basis that how frequently an organisation is ready to
provide the facilities to customers. In context of Tesco, their merchandise are always available at
any time between 6:00 am to 11:00 pm to their customers. They manage their inventory and
stocks in such a way that their stores will not face the problem of lack of products. They are the
only supermarkets in UK which work for 16-17 hours a day.
Inventory methods opted to improve availability and service level of mentioned company
Inventory are the goods which is kept by company for future use mainly with the aim of
future sell. Inventories are kept by companies to insure that they will not have to face a problem
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of lack of products in their stores. A proper inventory management help an organisation to
maintain their inflow and outflow of products. In context of Tesco, they use historical method of
managing their inventories because they study their historical buying data and expected
temperature trends which means Tesco predict what customer want to purchase within an
specific area. They analyse their previous data to ensure their inventories needs.
Service level is that percentage which is determined how frequently the goals of
organisation is achieved(Sauer and Seuring, 2019). It tell the performance of an organisation. In
context of Tesco, their service level is 98.5% which means there is 98.5% chances that overall
demand during lead time will be met by Tesco.
In context of Tesco, the order of inventory is based on how much inventory is already
kept by the Tesco stores. In case appropriate inventory is already kept by stores then they will
not order any inventory and if the inventory is less in number they order it. For quick eatable
foods they kept that much stock only which will quickly move out from the store in the form of
sells because this items get spoiled easily and the home appliances like electric items can be
stored for long period of time. Hence, Tesco can order such items to kept in inventory for longer
time. Placing an order for inventory is fully dependent on availability of products in stores.
Every Tesco store order inventory from their warehouses at anytime whenever they are facing
the problem of lack of inventories. The cost involved in inventory order is very low in context of
Tesco because they use their own trucks for transportation, they have their own warehouses and
they have their own production houses. The only cost which is inured during ordering inventory
is petrol expenses and tax on inventories expenses. Re-order level is also called re-order point
which specify a particular amount of minimum inventories available at stores and determine if
total inventory fall down from this fix number then company re order inventory as soon as
possible.
Method of managing stock
Managing stock is an essential part for company to make their customers satisfy and to
manage the supply chain of an organisation. Tesco use EOQ method which is defined as the
method of managing stock within an company which is used to purchase inventory at minimum
cost which further means that this method help the company to purchase that much stock only
which is required buy the company. No extra inventory is kept for longer period of time by the
company in this method(Tseng and et. al., 2019). It reduce the holding cost, shortage cost and
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