Supply Chain Management Analysis Report: Tesco and Aldi Comparison

This report examines the supply chain management practices of Tesco and Aldi, two major players in the UK grocery market. The research analyzes their strategies, including the use of Total Quality Management and Material Requirements Planning, and evaluates their effectiveness. The report highlights Tesco's reliance on external brands and Aldi's focus on private-label products and aggressive growth strategies. It also explores the impact of e-commerce on their operations, the importance of outsourcing, and the need for ethical supply chain practices. The analysis considers the competitive landscape, emphasizing the importance of adapting to a price-conscious and convenience-focused market, and concludes with recommendations for both companies to enhance their competitiveness through e-commerce and ethical supply chain management.

Running head: SUPPLY CHAIN MANAGEMENT
Supply Chain Management
Name of the Student:
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1SUPPLY CHAIN MANAGEMENT
Supply chain management is an integral concept in the business management process,
and in fact, the management of flow of goods and services within a company determines
organizational success or failure. Since it is the supply chain management process that
determines if the right product will be made available at the right time and in the right place or
not, I decided to examine and critically analyze the effectiveness of this process in UK grocery
store.
This research has proved to be highly beneficial for me, as it has helped me enlighten the
advantages and limitations of the application of different supply chain management theories in
real life situations. Prior to undertaking the research, I was not aware of the variety of supply
chain management theories. However, while researching about Tesco and Aldi, I came across
multiple supply chain management theories such as Total Quality Management Theory and
Material Requirements Planning Theory that enlightened me about how the adoption of the
principles of different theories determines the organizational productivity and consumer
satisfaction. This research has enabled me understand how two companies, equally recognized
and powerful as Tesco and Aldi, can have their success dependent on the effective management
of supply chain. With the help of business journals and company reports, I have got to know how
Tesco is not a strong retail giant as Aldi, because of its ineffective supply chain management. I
discovered that Tesco is reliant on other brands like Unilever for its products, and as a result,
often the company’s ability to offer goods is affected by its market relation with Unilever. On the
other hand, the literary review helped me understand that Aldi despite being much smaller in
size, has always stayed ahead in the business owing to its aggressive growth strategies, as well
as its ability to offer products at very low prices has made an important impact on the
retail. However, most importantly, the company sells its own brands that reduce its dependence

2SUPPLY CHAIN MANAGEMENT
on other companies in the supply chain process. However, at the same time, I realized that the
drawback that Aldi encounters is its limited variety of products since it sells products belonging
to its own brand only. On the other hand, as far as Tesco is concerned, the company is still able
to manage its brand reputation because it believes in value creation strategy.
I have also realized the benefit of e-commerce for modern day consumers, and this has
helped me become aware of the importance of revolutionizing the product and service delivery
process as well. At the same time, I have also understood the importance of outsourcing business
process to third party vendors for ensuring operating efficiencies of the companies as well as cost
effective method of business conduction. However, the research has made me aware of the risks
of security threat and loss of management control that can result from such outsourcing process
as well. I have realized that retail companies of Australia such as Tesco and Aldi have online
presence, and yet their presence is not as strong as it needs to be. In fact, owing to the online
sites like Amazon, these companies will suffer unless they try out innovative strategies. While
operating in a price-conscious and convenience-focused market, the companies will have to
explore he digital space as most of the consumers wish to shop conveniently and faster than
before. However, after the research, I have come to the conclusion that Aldi needs to adopt an
ethical supply chain management process ensuring that the company makes payments on time
and shows commitment to meet customers' requirements. Besides, both the companies need to
boost their e-commerce as a strategy of building competitiveness.