Operation Management: Tesco's Supply Chain and Organizational Success

This report provides an in-depth analysis of Tesco's operation management practices, with a particular focus on supply chain management and its impact on the company's efficiency. It identifies supply chain management as a key operational practice, detailing its components such as planning, sourcing, inventory management, and transportation. The report critically evaluates how supply chain management influences Tesco's efficiency through effective inventory control, high-quality standards, risk and cost sharing, and enhanced consumer satisfaction. Furthermore, it explores the integration of technologies like automation, IoT, advanced analytics, AI, and blockchain within Tesco's supply chain processes. Finally, the report discusses supporting functions linked to operation management, including operational planning, finance, and product design, and assesses their role in ensuring Tesco's organizational success.

Operations and
Service Management

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 management is 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
significant practice which greatly influence its overall effectiveness and productivity in
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
effectively manages and optimise all the required resources to fulfil demands of
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
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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
helps the organisation in evaluating its requirements. Tesco effectively maintains
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.
The constructive supply chain functions puts a substantial impact on the efficiency and
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:
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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
control and maintenance of stock ensures high and constructive availability of
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 context to Tesco, the company has built strong 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
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readily services to consumers through conducting the process of distribution with
construction networks of supply chain. For instance, the enterprise maintains
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 goods ad its distribution. These technologies are described as
under in respect to Tesco:
 Automation: This is the technology which is used to improve the skilfulness, 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 data with the other devices and
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 understanding of the risk and the opportunities(Yu and et. al., 2021). With
reference to the Tesco, the supply chain generate the massive data whereas 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 in forecasting the future scenario, identify the errors, improving
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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 compliance and 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 operation management 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 activities of the production department. It makes
production by utilising the resources full capacity to get the effective output.
 Finance: Finance is very important function of the operation department in an
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
ensures that the product are designed appropriately through its creative team
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.
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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 it leads 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: It is the greater function of the management which involves planning,
monitoring and analysis 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 then distributor 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 management ensure 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
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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 management that manage
the manufacturing the supplying of the products to the distributor which takes goods to the
retailers and then finally to the buyers.
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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
management practices in an emerging economy’s context. Resources, Conservation and
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
green supply chain management practices. Business Strategy and the Environment, 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. and Dai, J., 2018. Sustainable supply chain management practices and
performance. Industrial Management & Data Systems.
Yang, M., Fu, M. and Zhang, Z., 2021. The adoption of digital technologies in supply chains:
Drivers, process and impact. Technological Forecasting and Social Change, 169,
p.120795.
Yu and et. al., 2021. Integrating big data analytics into supply chain finance: The roles of
information processing and data-driven culture. International Journal of Production
Economics, 236, p.108135.
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