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pg. 1 TESCO PLC (Case study) This case study is about the Tesco food retailer with a sales turnover of more than 567.5 billion. There describe the key logistic processes at Tesco & the main logistics challenges in running the Tesco operation. And there describe earlier how Tesco was performed faces issues & the current situation of the Tesco food retailer. Tesco is the UK's biggest food retailer offering a variety of services for food and nonfood products to include insurance, entertainment, electrical goods and many more. It employs over 440,000 people around the world with over 280,000 in the UK. It has over 2,000 stores in the UK and a growing number of stores abroad in countries such as Thailand, China, Hungary and the United States. Tesco is the biggest private sector employer in the UK and offers a competitive package of pay and benefits for all jobs, whether as assistants or managers in stores and depots. More specialized roles such as finance and HR are based at its head offices based in Hertfordshire.
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pg. 2 1.Describe the key Logistic processes at Tesco The logistics are the function of supply chain management consists of the tasks involved in moving & positioning inventory throughout the supply chain. And they are mentioned logistics is about material & about information flow. In the logistics there are five functions in the process. Theyareinventoryhandling/materialhandling,procurement,warehousing/storing, transportation & distribution. According to the inventory handling, there is a huge product range & it is impossible for the individual store to recorder across the whole range (store based ordering). Instead, sales of each product line are trashed continuously through the till by means of electronic points of sales systems. As a customer’s purchases are scanned through the bar code trader in the till, the sale is automatically recorded for each unit. Procurement currently stands at 65000 stock keeping units depending on the size of the stores as Tesco broadens its presence in the ‘non food’ market for electrical good, stationary, clothing & the like this massive range is supported by 3000 suppliers who are expected to provide service levels (correct time & quantities) of at least 98.5 percent by delivering to Tesco within a half hour time ‘windows’. Volumes are equally impressive. In a year; some 2.5 billion cases of product are shipped from suppliers to the stores. Cumulative sales are updated every four hours on Tesco information exchange. This a system based on internet protocol that allows Tesco & its suppliers to communicate trading information. Based on the cumulative sales, Tesco places orders with its suppliers by means of electronic data interchange. The warehouse building comprises 25000 square meters divided into three temperature zones from(25 c),2 c(chilled)and 12 c 9 semi ambient).Each distribution centre secures a group of between 100 and 140 retail stores. Currently stands at 65000 stock keeping units depending on the sites of the store as Tesco broadens its presence in the ‘non food’ market for electrical goods, stationary, clothing and etc. According to the transportation, delivery vehicles for composite depots can use insulated. Trailers divided into chambers by means of movable bulkheads so they can operate different temperatures. Deliveries are made as agreed, scheduled times. Ambient goods such as cans & clothing are delivered through a separate grocery distribution network which relies on a stocked
pg. 3 environmentwhereordersarepitchedbystores.Thisoperationiscomplementedbya strategically located tracking station, which operates a pitch to zero operation for fast moving grocery on merchandise units that can be placed directly on the method of transporting goods from supplier through to the stores. In the distribution in the early reform for supermarket operation was to have suppliers deliver to distribution centre rather than to every store. During the 1980 s, distribution to retail store was handled by 26 depots. These operated on a single temperature basis and were small and relatively inefficient. Delivery volumes to each store were also relatively low and it was not economic to deliver to all stores each day. Goods that required temperature controlled environments had to be carried on separate vehicles. Each product group had different ordering systems. The net worth of depots simply could not handle the growth in volume& the increasingly high standards of temperature control. Then Tesco implemented the ‘composite’ distribution system & under this manysmalldepotswithlimitedtemperaturecontrolfacilitieswereplacedbycomposite distribution centers, which can handle many products sat several temperature ranges. The opportunity is to provide a cost effective daily delivery service to all stores.
pg. 4 1.There are main Logistic challenges in running the Tesco operation The company faces following challenges, such as, Transportation In a year some2.5billioncases of products are shipped from suppliers to the stores. For that the transportation cost is very high. So it also a big challenge for running in Tesco food retailer operation. size of the stores The currently stands at 65000 stock keeping units depending the size of the stores in the Tesco; It is a big challenge for keeping the products. So have to expand the stores because rapidly the product range held by stores has growth. Vehicle uses for distribution to stores It grantees a major proportion of Tesco’s indirect carbon footprint. It is a big challenge for Tesco & it must reduce its environmental impact at the same time. If the company fails in controlling the emission of pollutants, the growth of Tesco will be destroyed. And also the vehicles using for transportation the natural gases. Transportation cost To overcome Biodiesel or even electric trucks can help reduce fuel costs, and they are becoming more affordable every year. Supplier relationship The supplier relationship also big challenge for Tesco food retailers. To overcome this challenge to build and maintain amount beneficial business relationship, & the foundation ofthatrelationshipisopencommunication.AndtheTescocantakethatopen communication to understand the supplier’s goals, business & it will help to strong relationship to allow both parties to succeed. Lacking the just in time system In their management process Tesco is lacking the IIP system .The Tesco has maintain the huge inventory & it hidden there problems such as break down products, delay products etc. It is a big challenge for the Tesco & over this problem law inventory& it will be helps to identity the problems for success their operation.
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pg. 5 Challenging the consuming buying behavior. Due to that the retailer companies’ demand can be increasing. So the increasing demand is a huge challenge for the Tesco food retailer to succeed their operation. Product delivery system The Tesco food retailers deliver the products through the door step concept for their customers. If the other companies delivery their products through the online system, It can be a huge challenge for the Tesco because they delivering the doorstep from the orders of their customers. The Tesco will change their delivery system via the online / internet system. It will be a big challenge to them.