Supply Chain Management at Tesco: An In-depth Analysis Report

This report provides a comprehensive analysis of Tesco's supply chain management, examining key aspects such as consumer service, inventory control, transportation methods, and warehousing strategies. It delves into Tesco's use of Just-in-Time (JIT) and Six Sigma for inventory management, detailing transportation modes including rail, road, and sea, and the role of LSPs. The report also explores warehousing and capacity management, highlighting critical issues that emerge within Tesco's supply chain, along with the company's responses and potential improvements, such as increasing supply chain visibility and utilizing safety stock. The analysis underscores Tesco's strategic approach to gaining a competitive advantage in the retail sector, offering valuable insights into the challenges and opportunities within its supply chain operations.

SUPPLY CHAIN MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
Consumer service and inventory.................................................................................................3
Transportation and LSPs.............................................................................................................4
Warehousing and capacity..........................................................................................................6
Strategy and competitive advantage............................................................................................7
CONCLUSION................................................................................................................................8
RECOMMENDATION...................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Supply chain management is defined as management related to flows of products or
services. It includes all procedures and methods that transform raw materials into finished items.
It plays vital role in success and excellent progress of organizations that has operated in
particular sector. Supply chain management is a kind of procedure that help a company to supply
their products or services on time to target market. This process includes streamlining of a
venture supply side practices and activities, which made companies able to increase consumers
value and gain competitive edge, which is quite beneficial for their ventures. The current
assignment will be based on Tesco, which falls under list of leading supermarket chains in the
UK. It serves more than 3.5 billion consumers effectively and appropriately, which is quite
beneficial for the organization. The aim of this company is to make shopping easier and cheaper
for average household.
It wants to provide quality services and goods to customers which made them happy and
provide unexpected satisfaction that help to retain individual buyer with brand. Along with
offline, chosen supermarket attempts to develop online shopping experience much better than
last few years in the context of shoppers. Furthermore, company attempts to be the most valued
ventures by people whom they serve and communities in which it operated from longer period of
time, successfully and systematically even facing global challenges. The study will explain how
logistics and supply chain management is conceived, contributed, delivered & created in chose
company.
TASK
Consumer service and inventory
TESCO is a leading retailer in the United Kingdom with over than 400,000 workers who
are able to serve billions of consumers that came in its stores to purchase quality items.
Organization work so hard to reach at target market and supply their products all over the world.
It efforts to make its goods available in market in regard to customers, by using
appropriate distribution channels, which made it able to sell each item efficiently. It utilized
offline distribution source in term of physical stores, where company make each product
available especially for its consumers and arrange everything according to needs and
expectations of buyers, which is beneficial for business and customers as well (Pu and et.al.,

2021). Tesco products are highly readily available to its customers, because organization by
using their stores make people happy and satisfied. Its stores are accessible in the market in
varied forms such as Tesco express, compact, home plus, superstores, Tesco extra and metro.
Along with this, firm attempts to make its services and goods available to each buyer by using
online product distribution channel as well. It includes its official website where customers
may create their account and buy what they want.
Inventory methods-
In the world of business varied types of inventory control methods and techniques are
available that many companies utilized to manage their inventory process and to improve
accessible items. Just like other firms, TESCO also uses the best inventory approaches, for
example, it utilized Just in time (JIT) inventory management technique which made company
able to improve its accessibilities in effective and systematic manner (Fatehi and Franza, 2020).
Over the years, it has incorporated and is still integrating with this method in its working
procedures, which is quite beneficial for venture growth and success within retail industry.
According to chosen approach, firm hold sufficient inventories to have right items to absorb
extreme market demand. Along with this, company also used Six sigma as effective inventory
management technique, which allow firm to reduce its carbon footprint and energy bill. The
service level of supermarket is at 95%.
Method related to stock management-
TESCO has managed its stock by using the most suitable and effective methods. For
example, it utilized just in time and six sigma to manage stock systematically and effectively,
which is quite essential. According to these two methods, company order essential raw materials
and buy other resources, which it needed to satisfy customers (Madhani, 2020). By conducting
this practice it has successfully managed its stock. It is a kind of management tactic that align
raw material orders from suppliers directly with manufacture schedules.
By using Six sigma, firm may attempt to improve their production procedure and reduce
defects that help to manage stock systematically.
Transportation and LSPs
Modes of transport-
There are several kinds of transportation modes available in the world of corporate that
an company may utilized according to their needs. TESCO used varied modes of transportation

like road, sea and rail in the context of supply chain. Organization highly used rail as the best
transportation source, which transport products from its venture central depot to distribution
point and outlets and them each item from suppliers are transported on the way back (Pérez-
Mesa and et.al., 2020). Furthermore, for the aim of this logistical business, firm may got into
contract with Stobart and direct rail services. The nearby distribution and local operations of this
brand is done through rail and road routes, because these two modes are easy to manage entire
process and effective as well in term of saving money.
LSPs-
TESCO may employ or used Label Distribution protocol (LDP) which made it able to
establish label switched paths through network by mapping network level routing data directly to
data connect later switched ways (Ogundijo, Tas and Onarinde, 2021). These Lsps may have a
final point at a directly connected neighbour or at a network egress point that enable switching
via all intermediator nodes.
TESCO is 3Pls and according to this it provides a wide portfolio of logistics services,
managed services and fresh produce souring via its global network. As a third party logistics
providers, firm may outsource its operational logistics from warehousing all the path via
delivery. It allows its venture to concentrate on other parts of business. Company caters varied
services still having to do with logistics of supply chain.
The supply side transportation is managed differently from demand side, in the context of
TESCO. Organization handles all transportation in its own places and also utilize supply chain
analytics to make an effective plan to transport products effectively. It uses the best modes of
transportation, which plays crucial role in regard to manage supply chain successfully. Along
with above discussed methods, RFID technology is also utilized by firm which allow it to
manage its inventory handling transportation process. The entire procedure is managed by using
varied techniques and approaches as well.
Supply side transportation management-
Supply chain transportation is quite efficient for TESCO, because it is cost effective and
time saving. It helps to establish strong and most effective communication with suppliers and
contribute to build useful relationship with them, which opens new ways for success and growth
of company. It helps to avoid shipment delays and reduce logistics defaults.

Another reason behind above discussion is that effective supply chain transportation
allow supermarket to run its supply chain activities all over the world as smoothly as it may. It is
efficient because it help to improve entire planning and increasing operational effectivenesses.
Warehousing and capacity
Warehousing is described as process of storing products that may sold in the future and
distribute later according to market demand, which in return increase the profitability and
productivity of organization. In the context of TESCO, this key element contribute to
organizational supply chain in term of maintaining inventory and managing stock in effective
manner. It plays significant role in supply chain of company by enabling inventory distribution,
cross docking procedures and sorting as well that strives to meet emerging demand of customers.
It can be said that warehousing is the most essential and useful component of logistics system
and supply chain. It made company able to balance data analysis that help to minimize risks of
delay for transport (Xiao and et.al., 2021). Warehousing give capability to firm in term of storing
bulk of items at one place. Along with above benefits, warehousing provides advantage to
supermarket in term of offering facilities to pack, process and grade of its goods.
After including the five stages it is quite difficult to manage capacity or warehousing
because it consumers a lot of time and efforts as well, which is not possible to spend. When
management consider the key five steps of warehousing, they may conduct a lot of practices and
work accordingly, which consumes their time and require more resources such as workers to
pass out each step in effective and systematic manner. When manager in Tesco included five
stages and consider the same, it brings issues for them to manage capacity in term of emerging
risks which affect entire process of warehousing in negative manner. At each stage management
may focus on individual activity, which is also not possible in short time period to do. For
example, while accessing inventory levels, a manager efforts more than last few weeks. It is not
as simple as that while thinking it to conduct into practical manner.
Supply chain is beneficial and cost effective approach in the context of managing
capacity for TESCO. It lays out all the aspects of manufacturing process, encompassing activities
included at each phase, data that is being transferred and natural resources which may converted
into useful and valuable materials. It helps to manage capacity by breaking supply chain
activities, which allow firm to supply their products and deliver it to customers according to their
demand and expectations. Supply chain is efficient in managing capacity in regard to Tesco at

high level as it varied benefits to company for example, it helps to improve quality control and
higher warehousing as operational efficiency rate, which is quite beneficial for supermarket in
term of increasing its customer base because when firm offer on time services and deliver goods
to people they may retain them for longer time period.
Strategy and competitive advantage
Critical issues emerge in Tesco related to supply chain-
While conducting practices and activities related to supply chain and inventory
management, varied kinds of problems may emerge which affect operational efficiency of
TESCO and may decrease its sales that lead to minimize profits margin and somewhere impact
its financial base. Lack of resources and lack of leadership style are the two kinds of issues that
may emerge and affect negatively upon overall process of company related to supply chain and
other operations. Furthermore, supply chain digitization is another emerging issue in supply
chain management.
How company perceive problems and how they respond to them-
Managers within TESCO may perceive above issues appropriately, by taking feedbacks
from workers and leaders because they work hard to manage supply chain and inventory system
and understand everything more closely that not one can comprehend. They may respond above
problems by considering the most effective and useful approaches that are available in the world
of business and utilized by many managers in the context of improving their inventory and
supply chain activities.
Ways in which TESCO can improve its supply chain-
TESCO use so many approaches and techniques in order to make its inventory and
supply chain management process effective and systematic, which permit company to gain
competitive edge. After analysis above findings, it can be said that company can utilize other
inventory approaches, which allow it to gain more competitive edge. For example, firm may use
safety stock as inventory approach, which is an extra quantity of an item that is stored in
warehouse of company to prevent an out of stock condition. This kind of products held in
inventory to eliminate risk that this goods maybe out of stock. It is one of the best and most
effective aid in the context of Tesco competitive advantage.
Furthermore, there are different forms of ways and approaches available that help
organization to improve its supply chain. For instance, company may increase its supply chain

visibility, which help to improve it even better than last few months. Supply chain visibility as an
effective way refer to firm capability which drives its attention and efforts to track each element
and activity relate to supply chain and its products as it moves from suppliers hands to venture. It
is quite important for any company to improve their supply chain because it helps to increase
productivity and contribute to maximize profitability that lead to gain competitive advantages.
TESCO in order to be competitive in retail sector utilized effective and specific supply
chain tactic, which bring many benefits to brand and let it capable to gain competitive edge as
well as achieve strategic aims and objectives. Organization used and introduced lean
management solution into its supply chain appropriately that may define its supply chain
strategy. Furthermore, company adopt path break systems and approaches as well like point of
sales data, continuous replenishment, primary distribution and RFID technology to make their
supply chain much effective and beneficial. By using these techniques, company attempts to
manage and enhance supply chain, which in return help its venture to obtain competitive
advantages. Its overall supply chain strategy is to use the best approaches and techniques which
made entire process more effective and turn into productive manner, which strengthen
organization and its operational efficiency.
It can be said that lean management is used to manage and organize daily work that has
been conducted at workplace to improve organizational performance related to supply chain and
other operations.
CONCLUSION
By summing up above discussion, it has been concluded that organization is operating its
venture in effective manner within retail sector by using the best beneficial and helpful inventory
management approaches. By utilizing the most effective methods and modes of transportation,
company has delivery quality products to customers, which in return increased its customers base
and satisfactory level of buyers. By using key resources and accessible things, organization has
gained its competitive edge. Furthermore, from above analysis, it has been summarized that by
taking right decision after analysing overall situation, supermarket has achieved its set aims and
objectives.

RECOMMENDATION
From above analysis, it can be identified that TESCO may get more benefits, when it
developed the best and appropriate supply chain strategy.
 In term of strategy, company can use vertical integration which falls under list of
effective supply chain management tactics. It is a tactic whereby firm may owns or
control its distributors, suppliers and retail locations as well as to manage its supply or
value chain in systematic manner.
 Vertical integration as beneficial strategy used by many retailers to make their value
chain much better than their rivals (Li and Chen, 2020). Tesco can adopt this tactic as
well which made it able to control whole process and reduce emerging issues that may
impact negatively upon sales, etc. It allows company to eliminate costs and enhance
operational efficiency, which is quite important to improve for chosen brand over time.

REFERENCES
Books and Journals
Fatehi, K. and Franza, R.M., 2020. Systems considerations for adopting just-in-time
production. Journal of Competitiveness Studies. 28(2). pp.143-157.
Li, W. and Chen, J., 2020. Manufacturer’s vertical integration strategies in a three-tier supply
chain. Transportation Research Part E: Logistics and Transportation Review. 135.
p.101884.
Madhani, P.M., 2020. Lean Six Sigma Deployment in Retail Industry: Enhancing Competitive
Advantages. IUP Journal of Business Strategy. 17(3).
Ogundijo, D.A., Tas, A.A. and Onarinde, B.A., 2021. An assessment of nutrition information on
front of pack labels and healthiness of foods in the United Kingdom retail market. BMC
Public Health. 21(1). pp.1-10.
Pérez-Mesa, J.C. and et.al., 2020. Analysis of Intermodal Transport Potentials for Vegetables
Export from Southeast Spain. Sustainability. 12(20). p.8502.
Pu, X. and et.al., 2021. Online channel strategies under different offline channel power
structures. Journal of Retailing and Consumer Services. 60. p.102479.
Xiao, Z. and et.al., 2021. New paradigm of logistics space reorganization: E-commerce, land use,
and supply chain management. Transportation Research Interdisciplinary Perspectives.
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Online
Effective Inventory Management + 18 Techniques. 2021. [Online]. Available Through:
<https://www.bigcommerce.com/blog/inventory-management/#inventory-management-
techniques>