Supply Chain Management: Key Concepts, Principles, Processes, and Strategies for TESCO

This report discusses the key concepts, principles, and processes of supply chain management for TESCO, along with good practices and failures. It critically analyzes how logistics and supply chain strategy contribute to competitiveness and evaluates the issues associated with the development of supply chain strategy. The report also evaluates the interrelationship between supply chain and other areas of an organization for the success of a business.

Report

Contents
INTRODUCTION.......................................................................................................................................3
MAINBODY...............................................................................................................................................3
Discussing key supply chain concept, principles and processes along with good practices and failures. 3
Critically analyzing how logistics and supply chain strategy contribute to competitiveness...................6
Critically evaluating the issues associated with development of supply chain strategy and identifying
solution based on good practice models..................................................................................................9
Evaluating the interrelationship between supply chain and other areas of an organization considering
their importance to the success of a business.........................................................................................11
CONCLUSION.........................................................................................................................................11
REFERENCES..............................................................................................................................................13

INTRODUCTION
A supply chain refers to the overall network that consists between an organization and its
suppliers in order to produce and distribute particular products to the final consumer. This supply
network consists of various activities, individuals, entities along with resource and information.
The supply chain consists of various steps which need to be considered in order to have effective
organization operations in contest to distribution of products. For the following report TESCO
has been taken into consideration which is a British multinational groceries and general
merchandise retailer headquartered in Welwyn Garden City, UK. The following report will
discuss key concept, principle as well as process of supply chain. In addition to this, it will
critically analyze how logiest and supply chain strategy contributes in competitiveness.
Moreover, it will highlight issues associated with development of supply chain strategies.
Furthermore, the report will evaluate the interrelation between supply chain and other areas of an
organization for the success of a business.
MAINBODY
Discussing key supply chain concept, principles and processes along with good practices
and failures.
Supply chain is consists of various components which are developed by an organization
and included design, assembly along with delivery of specific products. In context to TESCO,
the supply chain plays an essential role within the business as it allow them to effectively deliver
of final products and service to their customers (Singh and et. al., 2021). The optimal functioning
of supply chain is crucial for the organization as it ensure in achieving organization objects of
satisficing needs of customers through finished product and enables organization to grow and
generate profitability. In order to further understand the aspect of supply chain the concept’s,
principles as well as process are elaborated below in context to TESCO:
Concept of Supply chain:
The overall concept of supply chain consists of various aspects that help in outlining its
basic objectives. The primary function of a supply chain is to effectively forecast and plan the
required products needed by customers. It allows an organization to ensure it is able to deliver
required products to customers in an effective manner. In context to TESCO, the supply chain of
the organization is able to assist the business in increasing the satisfaction of their customers and

ensure all the process within their supply chain are effective as well as cost efficient through the
utilization of structure technological techniques.
Principles of Supply chain:
The principles of supply chain consist of various ideas and practices that are focused on
seven principles and present effectiveness to a supply chain. The seven principles of supply
chain are mentioned below in context to TESCO:
Principle – 1:
The segmentation of customers on the bases of needs of distinct groups and adapt supply
chain to server particular segment. In context to TESCO, it allows the organization to target a
specific segment of customers and develop supply chain strategy accordingly for high level of
performance (Truong Quang and Hara., 2018).
Principle – 2:
To customize network of logistics to fulfill needs of specific segment and profitability of
customer segment. In context to TESCO, the management focuses on ensuring their logistic
network is well structured as well as systematic in order to deliver optimal productivity.
Principle – 3:
Understand maker trends and align demand planning accordingly within the supply chain.
In context to TESCO, the management evaluates the maker and understand market trends in
order to improve the supply of products that are high in demand in order to maintain efficiency
of the supply chain.
Principle – 4:
To differentiate products closer to the actual needs of customers in order to speed supply
of products across the supply chain. In context to TESCO, the organization involves various
products within its supply chain which makes it complex but allows in meeting customers
demand a higher level (Panigrahi, Bahinipati and Jain., 2018).
Principle – 5:

To effective manage various sources of supply chain in a strategic manner in order to
reduce total cost of material. In context to TESCO,
Principle – 6:
To develop and widen supply chain through technological strategy in order to provide
optimal support in the overall process. In context to TESCO, the management involves various
technological process in order to keep the operations of its supply chain optimal and efficient.
Principle – 7:
To adapt channels-spanning in order to enhance performance and collects data relative to
productivity of the supply chain process. In context to TESCO, the management ensure it is able
to periodically analyses the performance of the supply chain in order to negate any hindrances
that can lead to supply chain failure.
Process of Supply chain:
It is crucial for an organization to ensure that is supply chain process is effective as well
as efficient in order to not only save valuable time but cost as well. This allows an organization
to provide products to customers in an optimal way resulting in increased satisfaction and
organizational growth (Hong, Zhang and Ding., 2018). In context to TESCO, its supply chain
process allows the organization to ensure that all process are performance in a productive manner
and have high level of performance in delivering products. Given below in the supply chain
process in context to TESCO:
Planning:
This step of supply chain seeks to create effective long and short range supply chain
strategies which can predict customer demand and needs. In context to TESCO, this stage
enables the management to develop suitable strategies that will allows for an effective supply
chain and ensure high level of performance (Centobelli, Cerchione and Ertz., 2020).
Procurement:

This step of the supply chain consists of purchasing required raw material, components as
well as goods. In context to TESCO, the management develop positive relations with their
suppliers and acquire high quality good at least cost possible for cost advantage in market.
Production:
The following process involves converting raw material in products through
manufacturing and conversion. In context to TESCO, the management utilizes effective
technological technique and methods to convert acquired good into finished products.
Distribution:
This step of supply chain process involves managing logistics flow of products across the
supply chain and consists of transportation for quick and safe flow of goods. In context to
TESCO, various distribution channels are utilized in order to store and transport good to either
warehouse or outlets in order to make products available to customers (Zimon and Madzík.,
2019).
Customer interface:
This step of the process focuses on customers planning and interaction in order to
understand their level of satisfaction relative to the products delivered. In context to TESCO, the
organization focuses on taking customers feedback relative to this satisfaction levels and
fulfillment of orders. This allows the management to makes necessary changes in their planning
step of the process.
Critically analyzing how logistics and supply chain strategy contribute to competitiveness.
The overall supply chain of an organization can be a key contribute towards gaining
competitive advantage in the market. The effective of supply chain ensure that an organization is
able to deliver products to their customers in an optimal manner. This allows the organization to
gain leverage in the market relative to its competitors (Li., 2020). This makes it crucial for an
organization to develop suitable and appropriate supply chain strategy that will allow the
business to have high level of productivity and performance. In context to TESCO, there are

various supply chain strategies that can be utilized in order to achieve enhanced competitiveness
in the market. It will allow the organization to capture a larger market share and acquired a larger
customer base relative to their competitions. In addition to this, the effective supply chain
strategy will allow TESCO to achieve the objective of growth and success. Given below are few
supply chain strategies in context to TESCO which can provide competitive advantage:
Strategy – 1 (Adopt demand driven planning):
This strategy of supply chain focuses on orienting the overly supply chain process on the
bases of customers demand. It requires an organization to forecast demand and preference of
customers demand relative to particular products in order to optimize supply chain (Jain, Jain
and Metri., 2018). In context to TESCO, this strategy can help the organization to makes
necessary changes in their supply chain relative to the needs of customers which will result in
high level of efficiency. On the contrary, this strategy can be complex as it requires analyzing of
customer’s needs which are dynamic in nature which can lead to inaccurate changes within the
supply chain lending to failure of supply chain and organizational operations.
Strategy – 2 (Develop an adaptive and agile supply chain):
This particular focuses on instilling flexibility within the supply chain in order to make it
adaptable to various changes in customer demand and preferences. It allows the supply chain to
handle sudden changes in the market. In addition to this, this strategy enable the organization to
makes necessary changes in their supply chain process in an effective manner which provide
high level of competitiveness. In context to TESCO, this strategy can help the organization to
develop suitable plans that can handle market and customer variation in an optimal manner
which will help in reducing cost an improving performance. Although this strategy can only be
effective for a small customer segment as it is easy to handle and instill changes.
Strategy – 3 (Optimize product design and management for supply):
This strategy focuses on improving the overall design and managing of supply chain in
order to gain competitive advantage. This strategy allows an organization to develop products in
a manner which will be cost effective as well as produce less waste in the overall process (Boone
and et. al., 2019). This allows the organization to save cost and gain advantage in the market

through its supply chain process. In context to TESCO, this particular strategy can allows the
business to develop unique product design which will save them cost which can further be
utilized in order to reduce the overall price of the product which can help in attain competitive
advantage in the market. Although this strategy is straight forward sit requires high level of
research and development as well as planning process to develop product design.
Strategy – 4 (Align supply chain with business goals):
This strategy of supply chain pays emphasis on aligning the overall process of supply
chain with the set organizational goals and objective in order to attain competitive advantage in
the market. It allows an origination to focuses on instilling their goals into supply chain process
which can be oriented in various manners according to the set objectives (Neutzling and et. al.,
2018). In context to TESCO, it can utilize this technique by focusing on reducing the overall cost
of products through alterations in their supply chain. This will help the organization accomplish
its objective of offering high quality products to customers at least cost possible. Although this
strategy can be complex as not all business objective can be aligned with the supply chain
process making it partially effective in providing competitive advantage.
Strategy – 5 (Sustainability in supply chain):
This strategy of the supply chain focuses on promoting Sustainability in the overall
supply chain process of the organization in order to enhance not only the productivity of the
process but gain competitive advantage in the market as well (Tseng, Lim and Wu., 2019). In
context to TESCO, introduction of Sustainability can be costly in the initial stage but can provide
high level of returns in the long run relative to their supply chain. Sustainability will enable the
organization to save cost on raw material which will provide competitive advantage in the maker
through reduced product price. On the contrary implementation Sustainability within the supply
chain requires high level of planning and commitment as it will require altering all stage of the
supply chain process which can be costly as well as complex.
Strategy – 6 (Adopt emerging technologies):
This strategy focuses on promotion utilization of advance technology within the supply
chain of an organization. This strategy pays emphasis on the use of automation and AI in order to

improve the overall performance of the process. In addition to this, the strategy allows in
reducing cost of operations as well. In context to TESCO, technology can play a major role in
increasing the efficiency of their supply chain which can provide high level of competitive
advantage. On the other hand implementation of the strategy can be costly due to the nature of
technological development and can lead to increase price of products in the initial stage.
Critically evaluating the issues associated with development of supply chain strategy and
identifying solution based on good practice models.
The concept of supply chain is an essential component of an organization as it allows the
business to supply its products in an effective manner to their customers. This allows the
business to ensure all the needs of their customers are met and allows the organization to attain
the objective of growth and success (Caniato, Henke and Zsidisin., 2019). In context to TESCO,
the supply chain is serves an as essential aspect of the business and allow the organization to
provide high quality products at least cost through positive relations with their suppliers.
Although there are various challenges that hinder the operations of supply chain and lead to
reduced profitability as well as organizational performance. Given below are various challenges
that TESCO can encounter in its supply chain along with suitable solutions:
Quality customer service:
The concept of effective quality service is a major challenge while developing supply
chain strategy. It is essential to have structured and systematic process of attaining feedback
from customers in order to develop planning process of the supply chain. In context to TESCO,
providing effective customer service can be challenging as specific measures have to be
established in order to optimally gain feedback form their customers.
Costing:
The overall cost of supply chain can be altered through various factors which are not in
the control of the organization. These factors can include external environment and change in
cost of raw material which have an impact on the overall costing of supply chain. In context to

TESCO, the aspect of variation in cost can influence the overall supply chain operation of the
organization. This can lead to disrupted supply chain channels and financial loses as well.
Supplier relations:
It is crucial for an organization to have positive relations with their suppliers in order to
maintain harmony and acquired goods in an effective manner. In context to TESCO, establishing
relations with supplier can be a challenge as they possess the power to change prices of raw
material which can cause development of negative relations. This can lead to disruption of
supply chain material leading the organization with ineffective operations (Swanson and et. al.,
2018).
Qualified personnel:
It can be challenge for an organization to hire individuals how are qualified to maintain
the process of the supply chain. It is important to have qualified personnel in order to ensure all
the operations of the supply chain are conducted in a structured and systematic manner. In
context to TESCO, this can be challenging as there has to be effective training and development
of personnel which can require time and be costly for the organization to establish.
Unforeseen delays:
The element of unforeseen delays can be caused by aspect such as external environment
which are not in the control of the business. These element cause delay in the overall process of
the supply chain and lead to loses of the organization along with reduced productivity. In context
to TESCO, situation such as COVID -19 pandemic have been an unforeseen challenge for the
organization and has negatively impacted the supply chain leading to loss of inventory along
with reduced customer base (Vargas, Mantilla and de Sousa Jabbour., 2018).
Solution to challenges of Supply chain strategy:
Gain insight:
The concept of gaining insight can allow TESCO to improve upon its supply chain
strategy. The insight can include elements such as behavior of customers as well as suppliers,
cost of raw material along with market trends. This can allow the organization to develop

suitable strategies that are relatively flexible in handing market changes and ensuring that supply
chain maintains its performance as well as productivity in a structured manner.
Automation:
The concept of automation consists of automatic supply chain process along with the
introduction of AI within the overall operation. In context to TESCO, automation can allows the
organizations to save cost and eliminate the challenge of talented personnel. Moreover,
automation will allows the organization to save massive cost in its operations which can help in
reducing the overall cost of products and help in development of business strategy
(Ramezankhani, Torabi and Vahidi., 2018).
Inventory management:
The development of a structure and systematic inventory management can allows
TESCO to ensure it is able to identify key gaps in their supply chain process. In addition to this,
it will also help them in saving cost by reducing loss of inventory. In addition to this, inventory
management will allow TESCO to instill the overall demand of customers within their supply
chain process and ensure they can develop suitable supply chain strategy which will enable in
attain competitive advantage in the market.
Evaluating the interrelationship between supply chain and other areas of an organization
considering their importance to the success of a business.
As in context to TESCO, supply chain management is a process used by the organization
to improve the performance of the concern. Supply chain management is the process of making
the products available from business location to customer’s location and includes the activities of
sourcing, procurement, packaging, transportation and so on.
Interrelations of supply chain management with other areas of the undertaking:
Supply chain management and Financial Management:

Businesses measure their performance through financial results of the company on
quarterly or annual basis. These are used by the internal or external shareholders of the
organization to track their performance. Other than financial aspect, supply chain mangers are
using the resources of the business and taking decision that have a direct impact on the business.
When managers relate the financial goals with the supply chain management they would be able
to make more profits. Financial statements of the organization consist of income statements,
balance sheet, statement of cash flows and others which has a direct effect business. Supply
chain management impacts the financial performance in various ways such as transportation
costs, procurement costs, inventory costs , packaging costs, storage cost and many more all these
have a direct impact on the financial goals and performance of the concern. Moreover, evaluating
the relation of the supply chain with other areas of the undertaking will help to predict the future
scenarios and framing a corporate strategy.(Biswas, Raj and Srivastava, 2018) It will also
improve the decision making and would led to profits in the organization. In context to this,
organizations use decision model to analyse and measure the relationship between organizational
culture and supply chain performance by using cognitive maps, clustering and inference system
as it promotes the alignment between organization performance and supply chain management
team. Furthermore, supply chain directly influence the cost of the firm and its efficiency. The
business environment is competitive and has lot of challenges to face, business addresses all such
changes through effective supply chain management.(Panigrahi, Bahinipati and Jain, 2018). In
this they plans and manages all the activities right from sourcing, procurement, logistics planning
and management, coordination among supply chain partners. TESCO is facing challenges
globally regarding competitive edge and these are impacting the concern on massive scale.
Therefore, to ensure sustainability companies need to maintain proper process of supply chain in
order to enhance the performance of the concern.
Supply chain management and Marketing Management :
Other than finance, marketing professionals should have strong understanding with
supply chain managers. It will help to harmonize the activities of the concern and are
interconnected to each other. When marketing and logistics harmonize, it enhances the growth of
the business. Company's advertisement and promotional techniques will entice the customers. It
will built customers loyalty and built long term bond between customers and business. It

becomes necessary for the business to maintain unity while performing different activities of the
organization. Dysfunction of marketing and supply chain will result into disaster. So, it is
relevant to have mutual understanding and friendliness between managers to run the organization
smoothly.(Shi, Dong, Zhang and Zhang, 2019)Economy runs on the factors of demand and
supply, supply is overseen by supply chain managers such as sourcing, inventorying and many
more whereas demand is seen by marketing managers like advertising, product differentiation,
sales, customer feedback and many more. All these factors are need to be in tune with each other
to boost the productivity of the organization. This will help business to effectively sell the
products which marketing managers promoted. Marketers identify the needs and wants of
customers which supply chain managers fulfils. This SCM performs functions, for instance,
forecasting accuracy, stock utilization, on time supply to satisfy the customers need and desires.
When these functions are properly coordinated will be in more tune and high performing. Both
go hand in hand supply chain managers wants marketers to advertise the products to the potential
customers and marketers wants supply chain managers to fulfils the needs of products and
services advertised. It is an inherent part of the business and is necessary for company's success
and customer satisfaction. It will satisfy the needs of customers by making the products available
at right location and on right time so, it will better serve the needs of customers. Furthermore, it
will help to reduce the operational cost of the organization as manufactures and retailers depend
on supply chain managers to design networks that satisfy the customer needs at low cost. It will
help the organization to give competitive edge over others as it will improve the financial
position of the business. As supply chain managers helps to reduce cost which results in higher
profits. This is done by reducing the cost of plants and machines, warehouses and transportation
vehicles and so on. This will ultimately increase the cash flow of the concern and would generate
profits better than others.
Supply chain management and its general impact :
It also helps to sustain human life because they deliver basic amenities of food and water
to people. Any breakdown in this process will ruin the life of people. It also provides emergency
services to people by quickly delivering the requirements that will improve the quality of life.
Additionally, this boosts the economic growth of the company by quick supply at cheaper costs
due to high infrastructure development. This also helps in giving employment opportunities to

the people. As managers are involved in various activities ranging from inventory management,
transportation, warehousing, packaging and logistics management and others. (Cooper and
Slagmulder, 2017) This will create job opportunities to the people, it will reduce the problem of
unemployment. This process will improve the performance and would generate profits to the
firm.
CONCLUSION
From the above report it has been concluded that, supply chain plays an essential role in
the overall process of delivering their products to customers in an effective manner. In addition
to this it was observed that there are various principles and steps in the supply chain that allow it
to be efficient. Moreover, it was observed that there are various aspects through with the supply
chain strategy can help an organization to gain completive advantage in the market. It allows the
organization to not only save cost but provide high level of satisfaction to customers.
Furthermore, the report was able to highlight that there are various challenges that the supply
chain of an organization can encounter and cause hindrance in the overall process. Although it
was also observed that there are methods through which these challenges can be negate in an
effective manner. It was also observed that supply chain is effective related to the other areas of
an organization that provide essential support to the whole process of supply chain which results
in achieving organizational golas and objectives.

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