Supply Chain Management Practice and Technology in Tesco
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This report discusses the impact of supply chain management on the efficiency of Tesco, along with the technology that can be embedded in the process. It also evaluates the supportive functions linked to operation management practice and how they can ensure organizational success.
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Operations and Service Management
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Table of Contents INTRODUCTION..........................................................................................................................1 MAIN BODY...................................................................................................................................1 Task 1. Identify one operation management practice within the Tesco................................1 Task 2. Critically analyse how supply chain management practice impacts the efficiency of Tesco.......................................................................................................................................2 Task 3. Evaluate how technology could be embedded in this process or evaluate how this has already been achieved.............................................................................................................4 Task 4. What supporting functions are linked to this operation management practice and evaluate how can they assist with ensuring organisational success?.....................................4 CONCLUSION................................................................................................................................5 REFERENCES...............................................................................................................................7
INTRODUCTION Operation management is the process of production for transforming the raw material into finished goods and services that provide value to the customers. The operation management help the organisation in making quality products which are durable and reliable by the customer and satisfied their need. The operation management increase the revenue for the company because it provides the quality products to the customers by reducing the wastage and also make collaboration with the individual and other department of the organisation. In this report, Tesco has been taken into consideration, which is a multinational company with headquarter in England, UK. It involves in the business of the selling groceries and general merchandise retailer. The report will cover the concept of the supply chain management in the organisation and also analyse the impact of the operation department on the business entity in respect to the efficiency. Further, the report will discuss the technology that is integrated in the process and the supportive function that are linked to the management practice. MAIN BODY Task 1. Identify one operation management practice within the Tesco Operations management has various important practices which ensures efficiency and high productivity in the performance of an organisation.Supply chain managementis one of the major practice in the concept of operations management. It refers to the process of managing goods and services and ensuring their proper flow so that transformation of raw material into final products could execute in constructive manner(Luthra and Mangla, 2018). In context to Tesco, the supply chain management mainly includes the activities which are involved in sourcing and delivering goods to consumers. The process of supply chain management is a very significantpracticewhichgreatlyinfluenceitsoveralleffectivenessandproductivityin performance. Tesco operates in a global environment and thus it has adopted a consolidated approach in managing functions of its supply chain. The major components of supply chain management in context to Tesco are discussed below:Planning:It refers to the set of actions that the organisation determines as on how to effectivelymanagesandoptimisealltherequiredresourcestofulfildemandsof consumers. The operations managers of Tesco effectively plans strategies as they are highly experience and has great expertise of managing supply chain. It plans effective 1
tactics and strategies in order to determine the processes which it has to conduct in ensuring proper delivery and inventory control functions.Sourcing:It refers to the process included in procuring any raw material or fresh products for the purpose of creating commodities(Silva, Gomes and Sarkis, 2019). The company owns a major number of global suppliers and maintain highly collaborative relationship with them as they are mutually partnering form many years. The diversified portfolio of the organisation is sourced from numerous suppliers and it ensures high quality standards and on time delivery with its collaborative supply partners.Inventory management:It refers to the process of managing inventory and this part is crucial aspect of supply chain as it involves enlisting items which are required for procurement. In context to Tesco, it is ensured through inventory control software which helpstheorganisationinevaluatingitsrequirements.Tescoeffectivelymaintains inventory in order to comply with requirements and demands of consumers. Transportation and logistics:It is one of the most crucial aspect of supply chain as it is associated with providing goods and services to the consumers. In context to Tesco, it is able to enhance the capacity and track its global performance through using effective logistic software and distribute goods from its warehouses ensuring fast processes(Wang and Dai, 2018). The company owns a range of distribution centres from where it supply goods to stores or to direct potential buyers in case of online operations. Task 2. Critically analyse how supply chain management practice impacts the efficiency of Tesco The influence of supply chain management is major on an organisation as it is associated with various functions and they are interlinked with other practices of operations management. In context to Tesco, the function of supply chain is crucial in ensuring high productivity and performance of the enterprise as any interruptions in supply chain can affect the production and marketing processes of the company and hugely impact upon their revenues and profits as well. Theconstructivesupplychainfunctionsputsasubstantialimpacton theefficiencyand productivity of Tesco. It has established a proper and effective network of supply chain which promotes timely distribution and warehousing functions of the company. The impacts and influence of supply chain on the overall efficiency of the Tesco is discussed below: 2
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Effective control over inventory:Constructive supply chain networks ensures better control over inventory through timely availability of goods which is supplied by a number of partners. Tesco maintains its inventory with a number of suppliers and it ensures that proper stock is available at their offline stores as well as it ensures required items in its warehouses to meet with consumer demands(Samad and et.al., 2021). Proper controlandmaintenanceofstockensureshighandconstructiveavailabilityof commodities in its offline store which increase consumer confidence and make it their go to supermarket when they are out of any product.High quality standards:Supply chain is the process which is also associated with ensuring whether the suppliers are providing the company with high quality inputs or not to ensure finest produce. In contextto Tesco, the companyhas builtstrong and collaborative partnerships and relations with livestock farmers so that it can obtain fresh inputs to deliver consumer with high quality yields to comply with their health standards. In addition to this, the enterprise works with 12 banana farms situated in Latin America and it ensures that these farm practices are ethical and comply with health concerns of individuals. Thus, through strong and trustworthy collaborations, it assists in offering valuable commodities to its consumers and is able to build a large base of loyal consumers.Sharing of risks and costs:The strategic partnerships of the enterprise with number of prominent and crucial suppliers helps it in sharing risks and costs which are associated with packaging, shipment expenses as well as exchange rates which keeps on fluctuating. Tesco has established strong and mutual agreement with basmati rice producer, the Marbour group which has allowed the brand to procure high quality and quantity of branded rice in its European stores. Through working mutually the risks and costs of the enterprise gets reduced and furthermore, it helps in pooling and integration of resources ensuring high efficiency in results with minimisation of costs(Evans and Mason, 2018). Higher consumer satisfaction:The effectiveness in supply chain management and logistics of the company helps a great deal in ensuring satisfaction of consumers through ensuring accessibility and availability of commodities throughout stores of Tesco. The suppliers of the company ensures timely delivery within various offline stores of the organisation which allowed it to enhance its brand image(SPARKS, 2018). It provides 3
readily servicesto consumersthrough conducting the processof distributionwith constructionnetworksofsupplychain.Forinstance,theenterprisemaintains collaboration with Hilton which allow the company to supply its beef in the stores of Poland where the supplier operates. Task 3. Evaluate how technology could be embedded in supply chain management process or evaluate how this has already been achieved There are various technologies that have been emerged in order to assist then process of the supply chain management. This digital technologies help in procuring data, manage the inventory, transportation of the goodsad its distribution. These technologies are described as under in respect to Tesco: Automation:This is the technology which isused to improve theskilfulness, link applications and conformation activity in its supply chain operations. It uses digital process automation, Machine learning and so on which transform the manual task into the mechanical which help in saving time(van Hoek,2021). In relation to the Tesco, it reduced the labour cost, operation cost, also eliminate the human error and improve the inventory management. This also provides the transparency and visibility in its operation and ensures that the regulation are properly followed. Internet of things:This provide the real time visibility of the operations to the entire manufacturing processes and connect the data points to get the final result. In relation to the Tesco, this provides facility of the exchanging datawith the other devicesand system over the internet with the help of the sensor and the software. It provide the availability of the cloud platform to the businesses and the customers. Advance analytics:This plays a major role in the supply chain management where the massive amount of the data collected by the organisation and collaborate with the partner and better understandingof the risk and the opportunities(Yu and et. al., 2021). With reference to the Tesco, the supply chain generate the massive datawhereas analysis make the sense of the all data and provide the different visualisation in the form of graphs, chart and other means which assist in reducing the cost of the inventory. Artificial intelligence:AI help in the supply chain management process which enable the companies to collect the data from the various areas and make self-improvement in the process. This help inforecasting thefuture scenario, identify the errors, improving 4
the materiel planning, order scheduling and logistics. It safely move the goods from one place top other and reduce the labour force and alto increase the efficiency. Block chain:It is the system of recording the information which is impossible to change, hack cheat the system(Yang, Fu, and Zhang, 2021). It help in verification and the multi step transaction which provide security, reduce the cost of complianceand speed up the data transfer. Task 4. What supporting functions are linked to this operation management practice and evaluate how can they assist with ensuring organisational success? Operation management deals with the different processes in an organisation by using the various tools and plan of actions in order to increase the level of production and ascertain that the order are completed in time. There are various supportive function that are connected to operation management as regard with Tesco which are discussed below: Operational planning:This is the basic function of the operationmanagement which monitors the daily production of the products. It controls and manage the inventory by focusing on the performance of the team members. This help in transforming the raw material into the valuable products or the services(Helmold and Terry, 2021). With reference to Tesco, the operational department is responsible for the planning, organising, directing and controlling the all activitiesof the production department.It makes production by utilising the resources full capacity to get the effective output. Finance:Financeisveryimportantfunctionoftheoperationdepartmentinan organisation because it creates budgets so that it can get the goals of the production department by reducing cost. This function helps in finding the investment opportunities in order to utilise their financial resources to the fullest. In relation to the Tesco, it utilises and allocates the finance in order to reduce the cost and increase its profitability. This assists in manage the resources and satisfy the all needs of the consumers. Product design:This is the main responsibility of the operational management which ensuresthattheproductaredesignedappropriatelythroughitscreativeteam members(McCrieand Lee, 2021)Therefore, the organisation uses the latest technology in order to bring new innovative product in the market to satisfy the wants of the customers. In context to Tesco, it drives the changes in the products according to the taste of the customers so that their experienced can be enhanced with good quality and quantity. 5
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Quality control:The operation department always consider the quality for the products and ensures that it will give their best quality to their customers. The modern people demand the good quality instead of the quantity because they are health conscious and want quality goods. In relation to the Tesco, it provides its customers good quality products which has gained the trust of the people. Therefore they set the standard for the quality while making the products. Forecasting:This is the process follows by the operation management to forecast the demand that may arise in the future related to the particular products. This identifies the demand of the existing customers and aware the manufacturing department about the right amount of the products that are to be produced(Cai, Choi and Zhang, 2021).. With reference to Tesco, It produces the products according to the requirements of the customers because when fewer products are made so itleads to shortage in the marketplace. Hence, it brings the products after analysing the demand in the market related top the particular item or that are required by the customers. Strategy:Itisthegreaterfunctionofthemanagementwhichinvolvesplanning, monitoring andanalysis of the all aspects regularly. With reference to Tesco, this help the organisation in making the effective decision concerning with the production planning and scheduling and make the customers satisfied by providing them better quality products. Supply chain management:The organisation requires supply chain management so that it can manage then source,production and supply of the products. With reference to Tesco, , it manages it supply chain by analysing the needs of the customers and arrange for the raw material from the suppliers and get it ready supply it thendistributor who takes it ahead to the retailer and then to the customers. CONCLUSION From the above discussion it has been concluded that the operation department plays a significant role in an organisation because it facilitates the production of the goods by making coordination in various departments. Then operations managementensure the quality of the products which they offer to the customers top enhance their satisfaction level and identified the areas where the demand of the products develop. This ensures that the needs of the customers are fulfilled which provide assistance to the company in the generating the revenue and increase its 6
market share. The report has discussed about importance of the operation management which help the company in gaining the competitive advantage. Apart from this, the report has explained the supply chain management which is the function of the operation managementthat manage the manufacturing the supplying of the products to the distributor which takes goods to the retailers and then finally to the buyers. 7
REFERENCES Books and Journals Cai, Y.J., Choi, T.M. and Zhang, J., 2021. Platform supported supply chain operations in the blockchain era: Supply contracting and moral hazards.Decision Sciences,52(4), pp.866- 892. Evans, B. and Mason, R., 2018.The lean supply chain: managing the challenge at Tesco. Kogan Page Publishers. Helmold, M. and Terry, B., 2021.Operations and Supply Management 4.0: Industry Insights, Case Studies and Best Practices. Springer Nature. Luthra, S. and Mangla, S.K., 2018. When strategies matter: Adoption of sustainable supply chain managementpracticesinanemergingeconomy’scontext.Resources,Conservationand Recycling,138, pp.194-206. McCrie, R. and Lee, S., 2021.Security operations management. Butterworth-Heinemann. Samad, S. and et.al., 2021. Green Supply Chain Management practices and impact on firm performance: The moderating effect of collaborative capability.Technology in Society,67, p.101766. Silva, G.M., Gomes, P.J. and Sarkis, J., 2019. The role of innovation in the implementation of greensupplychainmanagementpractices.BusinessStrategyandtheEnvironment,28(5), pp.819-832. SPARKS, L., 2018. Tesco’s chain management supply 07.Logistics and Retail Management: Emerging Issues and New Challenges in the Retail Supply Chain, p.183. van Hoek, R., 2021. Lessons from CSCMP Supply Chain Hall of Famer Henry Ford and the research that they call for in modern supply chains.International Journal of Physical Distribution & Logistics Management. Wang,J.andDai,J.,2018.Sustainablesupplychainmanagementpracticesand performance.Industrial Management & Data Systems. Yang, M., Fu, M. and Zhang, Z., 2021. The adoption of digital technologies in supply chains: Drivers,processandimpact.TechnologicalForecastingandSocialChange,169, p.120795. Yu and et. al., 2021. Integrating big data analytics into supply chain finance: The roles of informationprocessinganddata-drivenculture.InternationalJournalofProduction Economics,236, p.108135. 8
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