BM563 Operations and Service Management: Tesco Report Analysis

This report examines Tesco's operations and service management practices, focusing on how the company utilizes various strategies to enhance efficiency and customer satisfaction. It begins with an introduction to operations management, followed by an analysis of Tesco's operational practices, in...Read More

OPERATIONS AND
SERVICE
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1. Operation management practice used by Tesco.......................................................................3
2. The impacts of total quality management practice on Tesco with regard to efficiency..........5
3. The way technology effect the total quality management process of Tesco...........................6
4. The supporting functions help the total quality management practice in order to assist Tesco
success..........................................................................................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES................................................................................................................................1

INTRODUCTION
Operation management is the management of business exercise to build the highest level
of efficiency within the company. It is an origin of management concerned with scheming and
dominating the process of production and redesigning of business operations in the manufacture
of goods and services (Wolniak, 2020). This function is responsible for managing the process of
creation of goods and services. It includes planning, directing, organizing and controlling of all
the resources required to produce company products as well as services offered.
TESCO is a multinational groceries and merchandize retailer of UK. It is the third largest
retailer in the world with over 400,000 employees and serve a million of customers through
online and offline stores (Peng , 2018).
This report will describe the concept of operation management practices and its impact
within the organization in regard to efficiency. Along with this, the report will highlight the
concept of technological changes embedded by the company and their supporting functions
which assist the company towards the success.
MAIN BODY
1. Operation management practice used by Tesco
Operation management is a field of business that are concerned with the management of
business practices in order to increase the efficiency of the employees working within the
organization. It is very important part to any organization as each individual leader of different
department will be required to perform various strategic functions such as forecasting, supply
chain management, product designing, delivery management, etc. (Sravani, 2019). The
procedure is concerned with converting raw materials and labour into final goods and services as
efficiently as possible in order to enhance the profit margin of the company.
Tesco is well-known company for its operation management practices that helps the
company to maintain the stock to an optimum level. The company's strategy is to formulate the
elements of marketing mix in order to build competitive benefits and to shower positive impact
on the sales of the company. Currently, Tesco offers wide range of food, clothing, electronics,
financial services and home decor products to their customers. The company is always in front of
their competitors as the most important operation management strategy is to do activities which
benefits their customers. With the help of strong customer focussed concept, the company

adopted policy of offering products and services at low prices and high quality to their
consumers along with Tesco club cards to increase customer loyalty towards their business
activities. The operation management practices are broadly classified into 4 categories: Just in time: It is a kind of philosophy which aims to create manufacturing system in
responsive way which give result towards the market needs (Palomba, 2019). This
management practice helps the organization to provide efficient production and delivery
of only the necessary parts of goods in the right quantity, at the right place and also at the
right time while consuming the minimum facilities. Total quality management: It is a practice or process of detecting and reducing errors
while manufacturing of goods, streamline supply chain management, improvement in
customers experiences and guarantee employees productivity (Nazari, 2017). TQM aims
to bound all the parties that are involved in manufacturing process responsible for the
overall quality of the final products and services. Six sigma: It is a management practice which has been used by the firm to improve
business current and ongoing processes, services and products with the help of
elimination of faults (Gunasekaran, 2020). It is expensive to implement but if done in
effective way then it helps the organization to become centre of excellence in front of
their competitors.
 Lean operations: It is a kind of business strategy driven by the rule of doing more with
fewer efforts. The ultimate goal of adopting or creating lean environment within the
organization is to reduce costs and eliminate waste energy, resources as well as time.
In context of Tesco, Total quality management practice has been used as being a product sector
firm, needs to set some principles and follow them in order to strengthen its operations
management activities. Performance, convenience, etc. are some principles which need to be
followed by Tesco. Few useful operational management concept of total quality management
such as time assurance, courtesy, etc. are followed by the firm. These principles and concepts
plays a huge role in distribution and management of operations. All these things reduces the
costs and problems in a way to fulfil successful delivery and customer satisfaction. Tesco
manages its operations in a well manner and hence as a strong with the usage of total quality
management. It helps the firm to continue production activities assistance in supply chain of

goods and services, cost benefits, continuous flow of activities, etc. These kinds of factors are
very much crucial for any firm in order to fulfil customer needs and requirements efficiently.
2. The impacts of total quality management practice on Tesco with regard to efficiency
Tesco is one of the most popular and successful super market chain in the UK. It is just
because of its efficient services and good quality of products. From the time company begin its
working, continued to introduce new products and services in the market in order to satisfy the
needs and wants of its customers. Currently, the company majorly deals with production and
sales of food items, cloths, groceries, etc. In addition, company also starts dealing in financial
services. The organization has used the concept of quality management to maintain and sustain
its position as a leading supermarket in the UK. It goes the extra mile in order to achieve that
position and goal of quality. The company hires highly dedicated human resource in order to
improve product and service quality. The company has specially quality improvement team that
deals with maintenance of quality of goods and products (Sahoo, 2019). In addition to effective
human resource, company also has effective policies and principles to regulate quality pledge.
The first policy is important for all employees in order to fulfil the requirements of the
customers. Secondly, the policies related to prevention of imperfection in its products and faults
during the process of customer service. Tesco ensures that the goods sold in their stores are able
to meet certain standards which provide high level of satisfaction to their consumers. Thirdly, the
policies also focus on the verification of processes in order to measure whether they are fulfilling
the requirement of setting high standard for customers or not.
In context of Tesco, it produces its own products and follow proper checking of its
attribute in order to sustain the standard of quality. The firm ensures that people handling
products that require high amount of sensitiveness to cleanliness holds a positive level of hygiene
to mitigate mistakes and complaints. Quality control in the company majorly achieved with the
help of two main methods i.e. testing and inspection. It is a kind of technique that is applied
during the whole process of production of products. With the help of effective testing of raw
material and inspecting the procedure of goods, company ensures the quality of products. In
order to attract more customers and to build and sustain their customer base, Tesco has adopted
low cost policies. This particular performance objective depends on the efficiency of the internal
operations of the company. When a company is able to effective internally, then it automatically

visualizes externally as well and able to reduce the production cost in its operations. As a result,
the firm is able to provide high quality goods and services to its customers at reduced or lower
cost as compared to its competitors. Cost of unnecessary wastage of repairing of products can be
avoided with the efficient usage of quality management practices. Thus, from recent years UK
has experiencing the effects of recession but with the effective use of operational practices the
Tesco has continued to experience increase in their profitability contempt the effects of
recession. With the help of low cost policy, customers are able to maintain their shopping habits
volume during recession period as well.
However, there are few drawbacks of this particular practice is that the total quality
management practice is quite expensive in nature. The technique comes with high and additional
costs related to training of employees, infrastructural improvement cost, consultation fees, team
development cost, etc. (Nyadzayo, 2019). The system highly requires continuous investment in
the form of trainings, processes, quality measurements and many more. This is the major reason
that small business companies are unable to adapt such expensive technique in their operations
but the company such as Tesco is able to adapt this technique in order to improve its efficiency.
3. The way technology effect the total quality management process of Tesco
The increasing global competitiveness of the business environment has forced the
companies to develop strategies to become low cost producers in order to differentiate their
goods and services from their competitors. With the help of total quality management practices,
Tesco is able become successful. For efficient usage of quality management practices, company
adopts Information Technology which helps the company in total quality improvement through
intensify quality awareness, diminution of manufacturing cost, online collection of
information about the quality of goods and rapid processes of the quality data (Subramanian,
2019). With the help of effective information technology company is able to improve its quality
processes and productivity of the company in general terms.
With the help of effective information technology the company is able to manage the
products sold at their stores in order to mark the dates which indicates the expiry of products.
This includes both the products whether it is produced within the company or produced by other
company. When a good is about to expire after staying on the shelf of store for so long, then the
improvement team is able to remove such kind of products from the shelves with the use of

effective information technology as the data of all the products has been feed in their system
which will highlight the dates later automatically. In such ways the Tesco is able to find highly
possible solutions in order to maintain and sustain good quality of goods and services and avoid
any kind of mishap which can directly impact the brand image of the firm. With effective
information technology system the team ensures that only products that are able to meet the
required standards are shelved in the stores of Tesco.
In order to satisfy the customers', information about their needs or wants and preferences
must be collected with the help of information technology and their function also oriented with
this process only. Customers are able to assess the quality of an organization's services or system
by evaluating the level of system services preferred by the company. For example, if the system
used by the company in their services are outdated or unable to satisfy the demand of the
customers, then the customer may choose not to accept services from that particular firm. It is
expected that application of information technology in quality management practices used by the
company will help to improve the operational tasks of the quality management and hence
increase the quality output of Tesco (Tasleem, 2019). The major role of information technology
in quality improvement of Tesco are: Increasing quality consciousness: With the help of effective information technology the
company is able to express their quality of products information towards all over their
targeted customers. The team of Tesco is able to manage the inventory of goods with the
help of this effective technological change within the industry as this is the major basis of
transferring effective services and become successful in the market space. This
automatically increases the brand awareness among the audience or consumers. Online information about the quality level: The quality of production of goods has been
evaluated with the help of information technology as the team members of Tesco are able
to complete their production of goods and delivering their services within the proper time
frame to their targeted customers (Kuruppuarachchi, 2010). With the help of efficient
information, the employees are able to serve their consumers in better and proper manner.
 Reducing quality cost: With the help of automation of work due to information
technology, the cost of errors and mistakes has been automatically reduces which
ultimately effects the overall cost of the production of goods. This is the major reason

that the Tesco follows low cost policy in which organization is able to offer good quality
of goods at low cost to their consumers.
4. The supporting functions help the total quality management practice in order to assist Tesco
success
Supporting functions are those activities that carried out by the organization in order to
give licence to the core business functions of the company and its production activities. These
are basically key enablers to an organization's success however, the activities require support the
efficient and effective delivery of organizational goals (Hergert and Morris, 2019). In context of
Tesco, the supporting functions that help the quality management practise in order to assist
organizational success has been described with the help of value chain analysis that can enable
the company to create competitive advantage and value to the business.
Primary activities includes: Inbound logistics: Tesco inbound logistic s operations are tangled and involves the
supply of various product categories to company various stores. The company makes
day-to-day investments in order to increase the capability of logistics so that the
economics of scale can be victimized to a greater level.
Illustration 1: Value Chain Analysis
Source: Business2you, 2021

 Operations: Tesco operations can be classified into three major segments such as Retail
in which the number of stores operated by Tesco worldwide has been described. The
organization operates its stores in various formats i.e. express, metro, superstore and
extra. Another segment is Manufacturing in which the grocery retail chain company
sells its own manufactured products in their stores and the last segment is Banking in
which company offers financial services to its consumers (Sheppard, 2019). Outbound logistics: The main source of outbound logistics of Tesco are its cost-
effectiveness and flexibility (Ishii, 2020). Company provides various online and offline
store facilities to its consumers. Marketing and sales: The marketing strategy of Tesco is associated with the offering of
wide variety of products to its customers and the best quality at lower prices. Recently,
the company also starts focusing on restoring stakeholders trust towards their brand
image in the market place.
 Service: Tesco provides reduced prices of goods to their customers along with effective
customer service to them. However, sometimes it is difficult for the company to maintain
a balance between both the aspects but still the organization manage to do the same for
their consumers.
Secondary activities includes: Firm infrastructure: Effective usage of infrastructure management allow the Tesco to
modify the value of the whole value chain of the company (Dekker, 2018). Organization
controls the infrastructure activities in order to strengthen their competitive position in
the market. Human resource management: Tesco is able to achieve its cost minimization objectives
with the help of analysing training and hiring cost of candidates with their comparative
return. Technology development: The technological development can be classified according to
the product and process of development of activities of the company.
 Procurement: Tesco consider its procurement activities in order to enhance the inbound
logistics, operations and outbound logistics of the company.

CONCLUSION
From the above report it has been concluded that operation management is a procedure
that majorly plans, controls and monitor production and manufacturing processes and delivery of
services. Operation management is highly important to enhance the product quality, productivity,
customer satisfaction and reducing operating cost. In context of Tesco, company uses quality
management practice of operations management in order to serve all the above mentioned
purposes.

REFERENCES
Books and journals
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Donaldson, K.M., Ishii, K. and Sheppard, S.D., 2020, January. Customer value chain analysis.
In International Design Engineering Technical Conferences and Computers and
Information in Engineering Conference (Vol. 46962, pp. 993-1001).
Gupta, S., Modgil, S. and Gunasekaran, A., 2020. Big data in lean six sigma: a review and
further research directions. International Journal of Production Research, 58(3),
pp.947-969.
Hergert, M. and Morris, D., 2019. Accounting data for value chain analysis. Strategic
Management Journal, 10(2). pp.175-188.
Kuruppuarachchi, D. and Perera, H.S.C., 2010. Impact of TQM and technology management on
operations performance. IUP Journal of Operations Management, 9(3). p.23.
Lasrado, F. and Nyadzayo, M., 2019. Improving service quality: Examining the drivers and
outcomes of TQM internalization in organizations. International Journal of Quality &
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Lin, C. and Peng, J., 2018. Analysis and Solution of the Problems in the Distribution of Suning
Tesco. Transportation Management, 1(1).
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communication technology (ICT) as an enabler in the quality management assessment
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Operations & Logistics, 6(1). pp.69-85.
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the balanced scorecard approach. International Journal of Productivity and
Performance Management.
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prediction. Journal of Systems and Software, 150. pp.22-36.
Sahoo, S., 2019. Assessment of TPM and TQM practices on business performance: a multi-
sector analysis. Journal of Quality in Maintenance Engineering.
Sravani, C. and Rao, C.B., 2019. Scope and Importance of Inventory Management Techniques in
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Tasleem, M., Khan, N. and Nisar, A., 2019. Impact of technology management on corporate
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Online
Business2you. 2021, [Online]. Available Through: <https://www.business-to-you.com/value-
chain/>.
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