MGT6801: Supply Chain Management Report - Tesco Case Study

This report provides a comprehensive analysis of Tesco's supply chain management, examining key aspects such as supply chain relationships, including vertical, horizontal, and full collaboration models, and strategies for improvement. It delves into the importance of supplier information systems, highlighting the use of technologies like IoT and RFID for enhanced visibility and efficient logistics. The report further explores procurement and outsourcing strategies, emphasizing risk mitigation and competitive advantage through outsourcing. Finally, it addresses sustainability initiatives within Tesco's supply chain, showcasing the company's commitment to sustainable business practices and environmental responsibility. The report incorporates relevant concepts and models to critically evaluate Tesco's approach to supply chain management, providing insights into how the organization manages risk, reduces costs, and promotes sustainability.

Supply chain
management

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
TASK...............................................................................................................................................3
Supply chain relationships...........................................................................................................3
Supplier information systems......................................................................................................5
Procurement and outsourcing......................................................................................................6
Sustainability...............................................................................................................................8
CONCLUSION AND RECOMMENDATION..............................................................................9
REFERENCES..............................................................................................................................10
Books & Journals:......................................................................................................................10

INTRODUCTION
Supply chain management is an important process of business which manages the flow of
goods and services. It includes all processes which mainly consider transfer of raw materials into
finished products (Wieland, 2021). Supply chain management requires proper control on
production, distribution and shipment of a product. It is identified that supply chain management
becomes important process which helps in order to achieve organisational goals and objectives.
With the effective and efficient supply chain management, company is able to past deliver of the
production services to the consumers. In the present scenario of business environment, customers
are becoming demanding and they want that their needs and want should be fulfilled as soon as
possible. That means they cannot wait per consumption of goods and services. Due to this,
organisations are focuses on improving the supply chain so that they can deliver the product fast.
In this context, Tesco is undertaken for showing the supply chain relationships. Tesco is the
largest supermarket store of UK and that’s why they need an active supply chain management
which assist them to satisfy their customer’s needs and wants as soon as possible. This report
gives emphasis on importance of supply chain relationships with types. It also covers the
importance of integration and collaboration in supply chain relationships. The report will be
discussing on information system of supply chain which helps them to make the process easy
and efficient. It also covers procurement strategy which helps to mitigate the supplier risk in
order to take competitive advantage. All this function should be focusing on sustainability in the
organisation.
MAIN BODY
TASK
Supply chain relationships
Supply chain relationships are very important for the success and growth of organisation as it
helps in to maintaining the relationship with suppliers so that Tesco can not found any difficulty
in order to purchase raw material (Saberi and et. al., 2019). It is identified that suppliers are very
important for Tesco because they provide essential goods in order to convert them into finished

goods. Without suppliers it is not possible for organisation to produce goods which they want to
sell their end users. That’s why company needs to maintain relationships with suppliers. Due to
this purpose, supply chain management is adopted by a Tesco which is the process of
identification of suppliers that are important for organisations. Supplier relationship management
is an important part of supply chain management. It focuses on optimising efficiency so that
every party take benefit from this activity. It is much similar to customer relationship
management but the only difference is the relationship is managed between suppliers and
purchases. There are many types of supply chain relationships in Tesco because it is a large
organisation which needs to be managing their relationship with customers as well as suppliers.
 Vertical relationship: It is the type of supply chain relations which link between retailers,
distributors, raw material suppliers, and manufacturers (Kshetri, 2018). That means it is a
vertical chain which needs to be very efficient and because of that they need to be
maintain a good relationship.
 Horizontal relationship: It refers to a supply chain where the position is parallel. For
example, 2 stores of Tesco in a same city share goods and services. That means it refers
to business arrangement between same positions of firm.
 Full collaboration: This supply chain relationship refers to business arrangement
between both vertical and parallel positions of suppliers. That means it is the combination
of vertical and horizontal where Tesco need to make relationship with retailers as well as
other stores. For example, Tesco set an objective of increasing sales which needs higher
collaboration of employees so that they can increase the distribution of products and
services.
Above mention types of supply chain relationship need integration and collaboration
because with the help of integration and collaboration they can successfully maintain their
relationships. In today's scenario, it is identified that there are many tools and techniques which
helps to integrate and collaborate successfully (Koberg and Longoni, 2019). In pandemic
situation, it becomes more difficult for Tesco that how they can collaborate with other stores and
suppliers. Then they found that technology becomes an important element in collaboration and
integration as it provides some important tools such as zoom, trello, etc. which becomes very
beneficial in the process of integration and collaboration as it provides a meeting even in which

restriction areas due to lockdown. There are some ways which helps in improving supplier chain
relationships in Tesco.
 Due to pandemic, organisation should use latest technology in order to manage their
supply chain relationships because they need communication which can be done with the
help of technologies.
 For effective information system in organisation, Tesco need to employ IT person who
have knowledge of different types of integration and collaboration systems.
 Tesco need to identify and analyse the needs and wants of suppliers in order to fulfil
them. It assists in completion of work by suppliers within time period.
Supplier information systems
It is analysed that visibility becomes very important in supply chain management for
Tesco. Tesco provides goods and services in of large amount which deliver in all over the world.
Manufacturing industries need to keep information in order to manage their supply chain so that
they can make a sure about inventory (Ben-Daya, Hassin and Bahroun, 2019). With the help of
visibility Tesco is able to maintain their records which become helpful for a company growth
and success as it successfully managed supply chain. Tesco uses many important latest
technologies which improves their supply chain visibility. Visibility is concerned with the
inventory need and availability in the company. There are some important reasons that why
Tesco need to increase visibility in supply chain management.
 Visibility helps Tesco to provide goods and services within time period to their end users.
 With the help of visibility they are able to know about ingredients which are used in
production of goods and services. It helps in making sure that the products which used in
order to produce goods and services are eco friendly and cannot harm our ecosystem.
 Day by day a complexity of supply chain management is rising and for that purpose
organisation need to concentrate on visibility.
 Visibility has to meeting customer demands as they got more transparency and feedback
from customers which help to improve their mistakes about their late deliveries and
products production.
 Tesco use supply chain visibility tools will help them to identify the continuous change in
government rules and regulation.

There are many modern information systems are available in the market which helps
supply chain visibility in Tesco (Tseng and et. al., 2019). It is identified that there are new
techniques and tools which helps to enhance supply chain visibility are all mentioned below:
 IoT: Tesco have an option to use IoT Technology for tracking consignment. It offers
many advantages to the organisation such as they can monitor the location, able to track
the shipment, identify the status of shipments, etc.
 RFID Technology: It is another type of technology which connected with IoT sensors so
that they can track the shipment even in low frequency of networks.
 Data standard and advanced analytics: It is identifying that if Tesco uses data analytics
in the logistics industry then they are able to know the real time situation of their goods.
Companies need to understand the importance of logistics and supply chain as it directly
impact on return of interest in their organisation (Pettit, Croxton and Fiksel, 2019). That means
from studies, it is identified by organisation that can be improved with the help of effective
supply chain and logistics. Tesco analysed that logistics is very important for supply chain.
Tesco uses many new technologies in order of improving their logistics such as they sued
screening guns in order to identify their invoice. Supply chains are very sensitive and complex as
it depends on the consumer behaviour which always changed time by time. For that reason,
Tesco need to use effective logistics in order to provide quality of supply chain. Logistics are
concerned with transportation of goods and services which make the supply chain process easy
so that's why Tesco need to make coordination between logistics and supply chain. It is
identified that logistics help Tesco to create value, reducing cost, improves efficiency, deliver
product at right time, key to success, satisfy consumers, etc. Due to these things an organisation
is able to increase ROI of Tesco.
Procurement and outsourcing
Procurement is refers to purchasing of goods and services with compliance of on laws
and regulations. In organisation it is identified that there are many types of risk which can be
faces in supply chain management (Cole, Stevenson and Aitken, 2019). For that purpose, Tesco
need to improve their procurement strategy so that they can reduce the risk in supply chain.
There are some ways which helps to reduce supply chain risk with procurement strategy.

 For reducing risk in supply chain, Tesco focused on making sure about audit in
procurement which includes checking of legal judgements, vendor credit ratings, and
financial liabilities. With the help of these points it can reduce the risk because of
checking in procurement process. The risk such as damage products facing by
organisation which can be deal with using automated compliance verification program.
 Company should focus on higher level of supply chain visibility in procurement process.
It includes more visibility so that they can track the shipment and other details. It helps
Tesco to reduce the risk of getting false products.
 In today's business environment, consumer is very awaking as they read reviews of
suppliers. So that's why Tesco need to review the procuring process because it directly
impact on their clients.
It is analysed that when Tesco improve their competitive position in the market then they
focuses on outsourcing. Outsourcing becomes a best way to reduce cost, first mover to market,
and grow revenue (Durach, Kembro and Wieland, 2017). With the help of outsourcing Tesco is
able to produce effectively and efficiently with low prices which reduce the products’ price. Also
identifying that with the help of outsourcing Tesco is able to take competitive advantage. Tesco
identifying that outsourcing helps in reducing investments, enable organisation to focus on other
important competencies, etc. For that reason, they outsource for information and communication
technology. This all things help in taking competitive advantage in the market. That's why
outsourcing becomes the best way in order to take a competitive advantage which gives a tough
competition to other organisations. It is identified organisation that outsourcing is a good option
for not only cost reduction but also for core competencies. Company should focus on
outsourcing so that they are able to take competitive advantage. It can be done with the help of
partnerships with other organisations from different geographical location. Organisation can also
take competitive advantage with the help of outsourcing technology. Technology becomes the
key to success of organisation and that's why if company found that other nation has better
technologies then it is a good decision of outsourcing. For outsourcing purpose, companies need
to critically evaluate the entire alternative which they get from other nations' organisation. With
the help of critical evaluation there able to you decide which option they should choose for
outsourcing.

Sustainability
Sustainability is very important for an organisation because it becomes the trend of
market which focuses on sustainability (Ardito and et. al., 2019). For that purpose, Tesco and
their multi stakeholders take initiatives in order to make sustainable business. Tesco find out that
supply chain needs to be sustainable so they a plan about annual expenditure on supply chain
which improve the sustainability. It is identified that Tesco is using renewable products in order
to get sustainable development. They are now collect data from suppliers so that they can reduce
environmental risk and most important reduction in carbon emissions which generally present in
supply chain. For that purpose did join Walmart which helps in collection of data. Day by day it
is identified that supply chain gives a great impact on environmental risk as there emits many
hazardous gases such as carbon dioxide which is not appropriate for our environment. Due to
this, Tesco took a step so that they can reduce the negative impact of supply chain from
environment in order to make the sustainable business. It is identifying the sustainability
becomes an important factor that should be considered by every organisation because it is not
only an emerging trend but also a necessity for environment. It becomes a fundamental duty for a
company that they should perform activities in order to fulfil corporate social responsibility.
When organisations improve the supply chain process then it directly affects on environment. By
improving the environment conditions, Tesco are able to take a competitive advantage and fulfil
the corporate social responsibility. Corporate social responsibility states that anything which
performed by organisation in order to improve the environment and reduces all things which
negatively impacts on nature.
In addition to this, Tesco found that reverse logistics is also important for organisation.
The founder traverse logistic is the process and practice which helps to organisation that they are
able to return products for the purpose of recycling, repairing or disposing of to the manufacturer
(Asamoah and et. al., 2021). Tesco found that it is the most cost-effective way which helps to
reduce the production cost and it becomes an activity of sustainability and corporate social
responsibility. That's why organisation uses E-Commerce business which gives a great impact on
logistics. It what forces on organisations in order to update their strategies and processes so that
they can stay competitive in the market (Nakasumi, 2017). Tesco identified that rivers logistic
has two different point of use which should be considered in their business that are corporate and
ecological. From the point of view of corporate, Tesco managing increasing in returns so that

they cannot increase the stock levels. Whereas from the point of view of ecological, reverse
logistics has a capability to reduces environment footprint which makes the business practices
more eco-friendly. That's why Tesco found that reverse logistics becomes an important part for
organisation as it not on they fulfil the corporate social responsibility but also increase the
number of.
CONCLUSION AND RECOMMENDATION
It can be concluded from the above discussion that supply chain management is an
important activity which every organisation need to improve. Companies are identified that some
important activities which should be understand by organisation in the process of supply chain.
Activities include supply chain relationships, procurement and outsourcing, supply information
systems, and sustainability. Organisation is found that these activities should be kept in the mind
of a manager in order to manager supply chain. Organisation found that suppliers are key
elements of organisation and that’s why they should maintain the relationships with them. They
also found that for making the process effective and efficient, companies need to set up supply
information system which helps to make the process easy. In addition to this, procurement is an
activity which every organisation perform by purchasing goods and services in order to convert
them into finished goods. If organisation found that it can be become effective with the help of
outsourcing then why company cannot do outsourcing. Outsourcing helps in taking a competitive
advantage from the market as it provides high quality of goods with reasonable prices to the
consumers. It also covers the importance of sustainability with the help of reverse logistics.
There is one recommendation that should be adopted by organisation:
 It is necessary for an organisation that they should increase visibility in supply chain so
that they are aware from every point of supply chain as it improves the efficiency and
effectiveness of supply chain management process.

REFERENCES
Books & Journals:
Ardito, L., and et. al., 2019. Towards Industry 4.0: Mapping digital technologies for supply chain
management-marketing integration. Business Process Management Journal.
Asamoah, D., and et. al., 2021. Inter-organizational systems use and supply chain performance:
Mediating role of supply chain management capabilities. International journal of
information management, 58, p.102195.
Ben-Daya, M., Hassini, E. and Bahroun, Z., 2019. Internet of things and supply chain
management: a literature review. International Journal of Production Research, 57(15-
16), pp.4719-4742.
Cole, R., Stevenson, M. and Aitken, J., 2019. Blockchain technology: implications for operations
and supply chain management. Supply Chain Management: An International Journal.
Durach, C. F., Kembro, J. and Wieland, A., 2017. A new paradigm for systematic literature
reviews in supply chain management. Journal of Supply Chain Management, 53(4),
pp.67-85.
Koberg, E. and Longoni, A., 2019. A systematic review of sustainable supply chain management
in global supply chains. Journal of cleaner production, 207, pp.1084-1098.
Kshetri, N., 2018. 1 Blockchain’s roles in meeting key supply chain management
objectives. International Journal of Information Management, 39, pp.80-89.
Nakasumi, M., 2017, July. Information sharing for supply chain management based on block
chain technology. In 2017 IEEE 19th conference on business informatics (CBI) (Vol. 1,
pp. 140-149). IEEE.
Pettit, T. J., Croxton, K. L. and Fiksel, J., 2019. The evolution of resilience in supply chain
management: a retrospective on ensuring supply chain resilience. Journal of Business
Logistics, 40(1), pp.56-65.
Saberi, S., and et. al., 2019. Blockchain technology and its relationships to sustainable supply
chain management. International Journal of Production Research, 57(7), pp.2117-2135.
Tseng, M. L., and et. al., 2019. A literature review on green supply chain management: Trends
and future challenges. Resources, Conservation and Recycling, 141, pp.145-162.
Wieland, A., 2021. Dancing the supply chain: Toward transformative supply chain
management. Journal of Supply Chain Management, 57(1), pp.58-73.