SCM and Operations Report: Tesco's Strategies and Challenges

This report analyzes Tesco's supply chain and operations management, highlighting the importance of an effective supply chain for business success. It discusses key factors for developing and integrating the supply chain, focusing on Tesco's operational background, market share, and collaborations. The report emphasizes the significance of managing the supply chain, from idea creation to the final consumer product, and the role of communication, technology, and supplier relationship management in maximizing product quality and minimizing defects. It also addresses challenges such as product complexity, demand and supply issues, and the need for competitive analysis. The report further explores strategies for optimizing inventory, improving distribution networks, and fostering healthy supplier relationships through regular communication and aligned values, ultimately aiming to enhance Tesco's competitive advantage and reduce operational costs. The importance of SRM (Supplier Relationship Management) strategy is also discussed.

Supply Chain and Operations Management

Table of Contents
TASK 1............................................................................................................................................3
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
CONCLUSION................................................................................................................................9
TASK-2............................................................................................................................................9
REFERENCES................................................................................................................................1

TASK 1
INTRODUCTION
The present report is based on supply chain which is known as process of delivering and
producing product and service through collecting the raw materials to delivering the product and
services. Along with this, study will discuss about the use of effective supply chain and its use in
business function. It will also throw light on the key factors that is used to develop and integrate
supply chain.
MAIN BODY
Tesco is one of the famous retail brand of the UK and it is biggest in the world. It is most
profitable super market chain and it has various branch. The company and its other supermarket
has criticism for abusing their monopoly position as well as contributing to some of the major
environmental issues. It includes exploiting small farmers in the UK and worldwide (Saberi and
et.al., 2019). Along with this, the market share of the company is also very rich and due to that it
is able to attract large audience. The operational background of Tesco is retail and it has also
collaborated with other super market in order to increase their sales.
Furthermore, supply chain is important part for the success of business as creating idea to end of
the product the process is complicated. Although a well manage this process can directly
translate into increased revenues. The supply chain is the process of checking how goods and
services from idea creation and raw material into finished consumer product. Moreover, it
includes process of gathering and moving the raw materials used for producing the goods as
well as storing the raw material unless and until it has been sold (Moosavi and et.al., 2021). This
information is used to drive the future sales. Along with this, the approach also involves all the
aspect of company operation system like purchasing, logistic and IT. It also includes people like
finance, suppliers and consumer in performing this system. This is long process for managing
the supply chain such as designing and planning this chain for company, carrying out the plan
with suitable variables as well as monitoring the performance of each part. In addition to this,
proper communication need to be maintained with the supply chain partner so that every
employee is participated in the plan. Moreover, this method helps in maximizing the product
and helps in minimizing the defects.

Along with this, a well-managed supply chain is helps in reducing organization operating system
that results in driving up profits. The efficiency can be seen in every part of the chain from
idea creation to the marketing of the final product (Toorajipour and et.al., 2021). Although it
works by coordinating procurement, retailer, distributors and customer as it moves together
through sales and buying cycles. The supply chain is affected by many external factor like gas
and price thus it need active management. With effective management of supply production,
distribution, sales and vendor are tightly controlled. It also means SCM is about managing the
cost at every step of delivering the goods so that customer can get quality services. However, in
order to manage the supply chain, it is important for company to hire manager and trained
professional for looking for essential components of the chain. They role is to check and
research about the developed strategy of the supply chain. Along with this, the source of
materials is used to make the sale of goods and to return the defective and unwanted products.
Furthermore, the key factor that are used in supply chain is inventor which need to be in
appropriate way and it should be original so that quality products can be given to the customer.
However, Tesco make use of high quality raw material so that final good is very useful for the
consumer. In addition to this, firm can also make use of KPIs so that while making decision it
will be helpful. Although the another factor is high dollar product and procedural costs. While
monitoring the supply chain metrics it is crucial to control overhead cost and have insight of high
cost material (Khan and et.al., 2021). The company need to manage the people involved in
supply management so that it can analysed about their proper functions and duty. Along with
this, Tesco can make use of supply chain strategy like customer requirement and before making
the strategy the future and present consumer needs should be look at. Although in some of the
cases company divide their customer and make different strategy to satisfy them.
Furthermore, a detail internal supply chain capabilities is required to determine the gaps
between the future and present performance of the company. Some of the major challenges that
has been faced by organization is product complex city, demand and supply and physical
network design. In addition to this, competitive analysis need to be done by company in order to
analyse about what need to do and what not as well as it is important for firm to understand the
competition (Tseng and et.al.,2019). Moreover, the another factor that need to be consider while
managing supply chain is technology as it helps company in sustaining new process as well as
capabilities to execute the supply chain. Effective technology contributes in maintain the smooth

flow within the company in order to give quality services to the customer. Tesco hire talented
people that have good technical skill as well as give time to time training to people so that supply
chain can be maintained (Toorajipour and et.al., 2021).
The benefits of supply chain management help a company in growing competitive advantage by
delivering products more quickly to customers. Although it lower downs the cost of doing the
business by decreasing the production expense as well as it also builds partnerships that can
support future growth.
The supplier relationship management is about making use of right technology and
resources as well as tools that need to be align with the company in order to create stronger and
loyal relationships. It helps company in focusing on the functional unit that will contribute in
managing the business. The supplier relationship management is area business that needs to
become top priority and it can positively effect on company. Adopting this approach will
contribute in key suppliers and smaller vendors that lead in long term benefits. However, it has
been found that company is actually spend more with suppliers instead of internal costs. Thus,
supplier relationship management will help in spending the accurate money. Although great
relationship with suppliers will save the operational and extra expense of organization. It will
allow firm in taking advantage of attractive deals, discounts and incentive which will be offered
by loyal vendors (Saberi and et.al., 2019). The great pricing will provide in reducing the
competition as more the healthy relation there will be less likely to have to spend money in
unexpected cost which delays in the production.
Although good relation with suppliers will increase the efficiencies that will result in
competitive marketplace with this it will also contribute in eliminating unproductive
administrative effort needed to manage suppliers. It also increases communication that result in
increasing visibility other aspect of the process. The higher your organizational efficiency the
better it will be for company to run the business.
Moreover, in order to maintain healthy relationship with supplier their goals and values need to
be align. As it will contribute for good customer relation that will helps in increasing the sales.
Ethics positioning and values are need to be consider when selecting suppliers as it is difficult to
maintain healthy relationship with a person that have different core values (Pettit, Croxton and
Fiksel, 2019). Understanding the need of suppliers is also very important in order to maintain
good relation. Such good paper work need to be manage as well as respect it ways of doing

things by making it easy from them by following their timelines. Documents related to insurance
certificates, purchase order and business information need to be given to them. Moreover, the
suppliers should be treated like customer such as paying on time, keeping their record so that
time is not wasted while re- sending things (Nunes, Causer and Ciolkosz, 2020). Most
importantly communication need to be manage like schedule a time for meeting so that issues
can be find while planning. Take feedback from them so that both the parties provide them
feedback on what will be useful and difficult. It will also contribute in developing innovative
idea that strengthen the relationship and company growth. Along with this, it is to be suggested
to Tesco that in order to maintain healthy relation a company should communicate regularly and
effectively as it helps in understanding task as well as avoid confusion. Effective communication
include face to face interaction and it is two-way method. Although Tesco need to establish
responsibility and roles so that parties can know what is being asked form them as well as it
increase their performance.
Furthermore, there are few factors that need to be consider while making the supply chain
strategy such as optimize company owned inventory (Moosavi and et.al., 2021). The
organization should store what is needed and there should be no extra storage as holding the
inventory cost is increasing day by day. Another way of utilizing inventory is by tracking scales
for effective management as it helps in providing accurate measurements that will result in
analysing right quantity to store. In addition to this, the company has also need to improve
distribution network which include two ways such as cluster method like graphs, grouping chart.
That helps in observing the process for any specific company function. Although holistic method
includes reviewing crucial components of distribution network as well as it does focus on
understanding the way components work. Both this approaches contribute in making effective
strategy for supply chain management. In addition to this, it can make a supply chain council
that will contribute in setting up this will help in clearing the functional strategy.
It also aims at giving direction and removing the barriers within company that will result
in improving the core of cross functional communication. It also creates an opportunity for the
leaders to provide effective supply chain management. Another factor that can be used in supply
chain is to embrace technology that means reviewing the present process used by company as
well as determine the weak area in which technology can be used to enhance the processes
(Lahane, Kant and Shankar, 2020). Moreover, technology like industrial scale will make supply

chain more easy to use. While developing the strategy for supply chain the company need to
focus on building healthy relation between suppliers even after the deals has been finalized. The
values of company and suppliers need to be aligned in order to maintained good relation and to
measure the performance and maintaining conflict resolution. After making the strategy
organization need to review procedures regularly in order to maintain efficiency and compliance.
It also contributes in avoiding threat of the supply chain as well as streamline operation and
mitigating the risk of fraud. The regular review helps in identifying various risk elements and
estimating their financial impact.
Along with this, technology also helps in establishing effective strategies that are necessary for
supplier chain management and it may have important aspect in developing strategy. Although it
plays important role in managing the supplier’s relation and also in success (Koberg and
Longoni, 2019). Most of the international company has made use of SRM strategy which is used
in successful supplier management and it has direct impact on the value of supply contract. Many
technologies can be used to create supplier relationships as extra expense decreases due to lower
down rate in IT there are many technologies which can be used to develop supplier relationship
like Transaction processing system, decision support system and processing. An important
element of an organization that occurs when two parties makes a transaction and this process is
collecting, storing and modifying an organization transaction is known as collecting. Although
the transaction system is the name of daily business, payrolls and feedback.
Moreover, the company can also make use of decision support system that defines the
model data and it make decision based on that data. It helps in making the right decision and it is
often dependent on the application of a computer with a human component (Khan and et.al.,
2021). The transaction processing system can be used as it helps in serving, modifying,
collecting and storing information related to company. Moreover, this tool is essential for
maintaining smooth flow of regular work like keeping record and paying employees. Thus,
technology helps in improving the strategy for the supply chain management.
Furthermore, the supply chain management issues have been increasing day by day and it is
getting hard to maintain it due to factors present in external market. The manufacturing and
distribution network has also become more complex but their successful operation is necessary
for increasing the revenue of company. Thus, for making the supply chain system effective
requires to be cross functional control and decision across all verticals (Ketchen and Craighead,

2020). However, correct supply chain system plays a crucial role in allowing organization to
explore and grab opportunity so that profitability and growth will increase. Although most of the
company think to improve the timing and customer service but there should be link of financial
information or logistics process as it will contribute in saving the expense. The top authority of
company can make use of inventory management that will allow in increasing the efficiency to
increase the visibility over logistics operations. This strategy will allow the manager and its team
to track inventory levels as it go throw several stages like receiving warehouse, to being packed
and deliver to customer.
A modern inventory management software provides more visibility as well as the ability
to access real time inventory tracking (Holmström and et.al., 2019). Although with help of this
company can avoid backorders, extra carrying cost and stock outs. Moreover, Tesco should
implement this as it will help in giving access to data and analytics that will help in making
company informed about the business decision like inventory forecasting. Along with this, in
order to make supply management process the company need to develop good relation with the
suppliers as it will contribute in managing delays and early issues.
However, suppliers that are inconsistent in delivering a quality of product will slow down the
supply chain thus it is crucial to be choose the right suppliers as it may cause delay in sourcing.
Another factor that can be used in order to make the supply chain effective software can be used
to allow team work as efficiently as possible (Ben-Daya, Hassini and Bahroun, 2019). Although
if company can make use of warehouse inventory by using WMS that connects with IMS which
will help in automate order processing. Along with this, order management tools help in data
reporting and analytics that is necessary for optimizing supply chain efficiency. The company
can also make use of green initiatives in business that will helps in attracting large customer and
saving the extra expense as it is cost effective.

CONCLUSION
The essay has summarized about the effectiveness of supply chain in increasing the
productivity of the company. Although company can make use of various other factors like KPI I
order to check the performance of supply chain. Lastly it has defined that it can be manage by
addressing the inventory and using advance technology.
TASK-2
 (Enclosed in PPT)
 Executive summary
Executive summary
The report has highlighted the importance of logistics in the supply chain management
that states that the logistics plays a very important role in the supply chain as it refers trio the
overall process of the management of the resources which involves how the resources are
acquired , stored and transported to their final destination. Supply chain management is
considered as an important part of the company. The chosen company Tesco, one of the leading
multinational grocery stores in UK and supply chain management of Tesco has the responsibility
of managing the flow of the goods from one place to another. In this the logistics plays a very
major role in managing the inventory of the company. The logistics department has to make sure
that the goods are transported to the right destination and aims at increasing the overall value of
the goods that matches with the preferences of the customers. The logistics department has also
ensured that in case of the perishable goods, arrangement has been regarding the cold storage
transportation of the goods of perishable nature.
The effectiveness of the procurement strategy has also covered which refers to the long-
term plans which helps in acquiring the necessary supplies from the among the efficient vendors
that deliver quality products on time. The benefit of the procurement strategy has been defined as
the financial plan that regulates the management of the budgets and workflow of the Tesco. The
benefits of these strategies has been defined which states that the activities of the company are
aligned with the business objectives with the helps of the procedures and strategies followed by
the company. It has also covered the various areas that is necessary to consider while making
strategies that is current position of the company, regulation, protocols and market condition. It
has also defined that the procurement procedures required deep understanding about the

requirements of the business which can be helpful in achieving the objectives of the company.
There are various factors that helps in improving the logistics and procurement strategies
that requires proper planning that involves the procurements of the goods , storage facilities and
delivery of the goods from the warehouse to the destination. There should be proper planning
that can avoid necessary delays in the supply chain of Tesco. Secondly, efficient transportation
system that can be helpful in identifying the overall logistics costs of the company. It has also
states that in order to improve this, the company has to ensure that best delivery is selected and
safety of the goods while transporting the goods. Thirdly, There has to be effective warehouse
management system that can helps in easy delivery of the goods from the warehouse to its
destination. The economic order quantity has played an important role in order to manage the the
cost of inventory and refers to the number of units that the company should add to their
inventory in order to minimize the total cost of the inventory that involves the holding, order and
shortage costs. It has also defined that EOQ is the part of inventory system where the level of
inventory is monitored and fixed quantity is ordered each time when the it is required to reorder
the inventory. The benefits of using EOQ is that it reduces the cost of inventory which can helps
in investing the capital in other areas of the company where it is important and also enhances the
overall performance of the company as with the helps of this method company can manage their
product line effectively. The roles of LIFO and FIFO method has been discussed in the report
that LIFO that is Last in , First is the method that is used and is related to the inventory that
records all the all the transaction related to the stocks that is currently purchased and is sold first.
Under this method the cost of recently purchased goods are first expensed in the cost of
goods sold which states that the lower cost of the goods will be treated as inventory. The LIFO
method is governed by the generally accepted accounting principles. This method is used by
those companies which has high inventory such as retailers which enable the company to take
tax benefits and higher cash flows. On the other hand, First in , first out is defined as the
accounting method in which the stocks and inventory that is acquired first are disposed of first
and presume that the remaining stock is purchased at last.. It has also states that the inventory
that id purchased first is recognized first. It has also stated that FIFO method saves time and
money while calculating the actual cost of the inventory that is being sold and on the contrary
while doing valuation of inventory and at the time of inflation which results in higher profits
which results into tax liabilities on the company. It has also been stated that Tesco uses FIFO

method in their business practices. The importance of Just in time has been discussed in the
report which states that it is one of the inventory management method which the goods are
purchased form the supplier only when they are in need. Various company uses this inventory
method that helps in reducing the holding cost of inventory and increases the sales of the stock.
In order to implement this method, the company required proper planning that help the company
to use the advanced software in the entire process till the delivery of goods that helps in
increasing the efficiency in the supply chain and eliminate the necessary risk that can affect the
functioning of the company. The other benefits of Just-in-time method is that it reduces the
inventory waste as the goods are ordered when they are in need, it also reduces the warehouse
holding costs. It also gives the manufacturer full control as they respond to the demands of the
customers quickly by increasing the production of the products that are in demand in the market.

REFERENCES
Books and journals
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