Analyzing Tesco's Operations Management: Strategies and Improvements

This report provides a comprehensive analysis of Tesco's operations management, examining its strategies and contributions to the business. It delves into customer expectations, segmenting them based on factors like nationality and ethnicity, and analyzing how Tesco strives to meet their needs through strategies such as good value items, clear information, efficient ordering systems, and after-sales services. The report also explores the different process types that have assisted Tesco in improving its operational objectives, including the transformation model and various operational procedures. Furthermore, it offers recommendations for improvements within Tesco's operational management system, covering aspects like supply chain management, lean manufacturing, and the contributions of departments such as human resources and research and development. The report concludes by highlighting the importance of effective operational management in driving Tesco's success and growth in the retail sector.

Operations Management

TABLE OF CONTENTS
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
A) Overview of company and department contribution to business ..........................................3
B) Detail about the customers of Tesco and their expectation....................................................5
C) Analysing the way different process types has assisted organisation in improving the
ability of accomplishing operation objectives ..........................................................................10
D) Analysing the procedure and providing the recommendation for improvement.................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Operational management is the managerial activity which includes various tasks such as
overseeing, designing and redesigning of business operations. The purpose of operation
management is to assist an organisation in increasing working efficiency. Managing operation is
very much crucial for enterprise in order to provide high level of satisfaction to customers.
Operational management is primarily concerned with converting input into output. It is an
effective operation management which drives firm towards achievement of success and growth.
An effective operation management assists organisation in accomplishing desired business
objectives.
The present report will have focus on examining the current status of operational
management in TESCo. An organisation is among one of the big retailer in United Kingdom.
Study will also have emphasized on identifying the different procedure has helped an enterprise
in accomplishing short as well as long term objectives. Project will include few suggestions
related to the changes which can be made in operational management system.
MAIN BODY
A) Overview of company and department contribution to business
Tesco is multinational British company operating business in retail sector. An
organisation has successfully expanded business in fourteen countries. In addition to this, Tesco
operates four types of stores these are extra, express, metro and superstore. The purpose
operational management by Tesco is to fulfil the needs of customers and meet their expectations.
An organisation by implementing the operational strategy intends to provide customers with
various benefits. Innovative as well as effective operational management strategy has assisted an
organisation in achieving success. Distinct operational management strategy has assisted
organisation in gaining competitive advantage.
The operation strategy adopted by Tesco mainly covers different aspects such as
functional, corporate and business unit strategy. Business entity plan to expand business
operations at international level is considered to be as corporate strategy. Tesco has adopted the
customer centric approach according to which enterprise develop products or services according
to the demands of consumers (Burgess, 2018.). Multi format stores has helped organisation in
increasing sales and profitability. It has provided firm an ease in distributing goods and services
to wide number of customers. Management in Tesco now have focus on bring improvement in

product or service delivery system. An organisation for enhancing the supply chain management
has implemented advance technology at workplace. Employment of modern technology within
an enterprise has lead to the increase as well as improvement in working efficiency of
employees, this strategy has also assisted business entity in developing high quality standards for
products and services. Tesco has done innovation in supply chain which has enabled enterprise
to deliver quality services and products to clients. In addition to this, company utilises is own
fleet for transporting products from suppliers, it has aided an enterprise in preventing the delay in
supplies and helped in making timely deliveries of goods and services. Lean as operational
management approach has been adopted by Tesco for brining improvement in supply chain
management (Slack and Brandon-Jones, 2018). Lean management approach has assisted firm in
eliminating the unnecessary procedures and wastes.
Contribution of Different department in operational management of an organisation.
Human resource management and marketing department has made significant
contribution in an effective operational management of Tesco. These functional units have
helped Tesco in achieving success and fostering growth. In context of human resource
department, manager in this functional unit has developed the team of highly skilled and talented
workers for executing different operations within an organisation. Human resource manager in
Tesco has made the proper training arrangement for supporting employees in developing the
skills and core competencies which are required for performing the different operational
activities. By providing the training to workers, human resource manager in Tesco has made
employees aware about their roles and responsibility which is very much important for avoiding
conflicts and for smooth functioning of business. This department has helped management in
ensuring effective as well as efficient utilisation of resources. It has helped business entity to
increase in effectiveness, productivity and efficiency (Chow, Chiu and Tang, 2018.).
Research and development department in Tesco has supported operational department in
developing the products according to the needs and demands of customers. This functional unit
has supported an enterprise in maintaining the balance between demand and supply. Research
and development department has made significant contribution in accomplishment of overall
business objectives. This functional unit has played significant role in improving the
performance of products and service offered by Tesco.

B) Detail about the customers of Tesco and their expectation
Customers are those people who is in need of a service or product and is willing to pay
for it. Age and income level are the two factors on the basis of which an enterprise categorise is
market. Company has basically two types of customers these are internal as well as external.
According to the slack model internal customers are those who are found within an enterprise.
Slack et.al., (2007) states that it is important for an organisation to effectively communicate with
internal customers' ass this will assist them in increasing productivity. In context of Tesco
Example of internal customers which the procurement section deal are supply, accounting,
financial and human resource department (Anderson and Bolton, 2018 ). Other instance of
internal customers is marketing which is considered to be as one of the important functional
unit. The purpose of marketing department is to promote brand and assist business entity in
increasing sales. Marketing as functional unit different expectation in context of output these are:
 Presence of sufficient quantity of goods or services for satisfying the demands of
customers.
 Availability of goods or service on time
 The type of products displayed is of reasonable quality
 Attractiveness of the way products are delivered to client
Tesco target external customer on the basis of nationality and ethnicity. Demographic
segmentation strategy has been adopted by company in order to dive large market into small
segment. This segmentation strategy has assisted Tesco in identifying the target customer group
for selling products and services. Tesco wants to earn profit for which it is very much crucial for
business entity to provide high level of satisfaction to customers. Business entity target all
customer group. An organisation utilises different strategies fore attracting the target customer
group. It is strategy of Tesco that marketing manager execute research at regular interval for
analysing the expectation of consumers (Bull and Janda, 2018). The target customer group have
high level of expectations related to the products as well as services offered by Tesco these are :
Good value items: Consumers expect good quality of products at reasonable cost. It is required
by Tesco to implement technology at workplace, as this strategy will aid an organisation in
reducing the cost and improving quality of goods or services. It will help firm in meeting
customer expectations related to price and quality of products as well as services.

Honest and clear information : Clients of Tesco wants to know clearly the total cost which
they are required to pay for buying specific item or service from store. It is crucial for Tesco to
inform customers about hidden charges while sharing the detail about products.
Effective as well as efficient ordering system : Tesco clients wants to get the quick delivery of
goods or services after ordering. An organisation can use order processing system on their
website, as this strategy will provide client an ease in tracking their orders.
After sales services: shoppers those who purchase products from Tesco expects that an
organisation will provide after sales services in context of faulty or defected goods. Tesco can
develop special team for handling the queries as well as complains of customers. As this strategy
will assist business entity in improving services.
Answers to queries quickly: customer wants complete information about the company such as
contact number, address etc. so that they can easily contact when required. Tesco should use
social media as this strategy will assist an organisation in providing quick response to queries of
people. In addition to this, manager in enterprise should establish all the essential information on
their website so that it can be easily accessed by clients.
The Tesco objective behind an effective operational management is to provide high level
of satisfaction to customers. Important fact about the Tesco operational management is that an
organisation does not process in batches (Kumar Mangla, Bhattacharya and Luthra, 2018)
. Operation manager in Tesco is responsible for ensuring good environment in store, as this will
help an organisation in achieving quality objectives (Teller, Holweg and Kotzab, 2018).
Development of Good store environment will assist firm in attracting more number of customers.
Operational department in an enterprise concentrate on lean manufacturing approach to
operational management. According to the five performance objective frame work Tesco five
performance targets are quality, cost, speed, flexibility and dependability.
Transformation model is the framework which is utilised by leaders in Tesco, as this will
assist them in developing the understanding about company. It describes the nature of operations.
Operational management system of Tesco is mainly concerned with the procedure of
transforming input that is resources into desired output (Anderson and Bolton, 2018).
Transformation procedure of Tesco involves selling products, providing advice to customers,
capacity as well as inventory control . In context of Tesco, an organisation is offering wide

variety of products as well as services to customers. Business entity have both highly skilled and
talented workers as well as facilities which firm utilises in different ways.
Transformational model of operation management
According to transformational model operation management transforms input that is raw
material, labour and information into outputs which provides added value to customers.
Transformation system is considered to be as critical element in the transformational model
which represents the way an enterprise produces products or services for fulfilling the needs of
customers (Lorange, Ichijo and de Onzoño, 2018). In context of Tesco, business entity is striving
for maximising the quality of their transformation procedure for fulfilling the demands as well as
requirement of consumers.
Input Transformation Output
Land
human resource
Capital
Raw materials
water
Metal
Equipments
Machinery
Trucks
Computer
Facilities
factories
Retail stores
Other
Information
time
legal constraints
Cutting
Transporting
Repairing
Researching
Analysing
innovation
Selling
Clothing
housing
Food products

Process is considered to be as the crucial aspects of operation management. Procedures in
operation management consists of more than one action which is performed in order to transform
input into output. Business procedure of Tesco composed of many interrelated procedures these
are :
Primary function of manager in Tesco is providing the guidance to employees related to
operation of specific system. The process of system design includes decisions which are related
to capacity of the system, geographic location of facilities, arrangement of functional units,
placement of equipments, products or service planning, etc.
System operation includes management of personnel, planning as well as controlling of
inventory, scheduling, management of project and assurance of quality. Supporting procedure
involves :
Purchasing : Manager in Tesco is responsible for procurement of raw material, suppliers and
equipments. Purchasing is also involved in receiving and inspecting the purchased goods.
Industrial engineering: It involves scheduling, establishment of standards for performance,
control of quality and handling of materials.
Distribution: It includes transportation of products or services to warehouses or retail outlets.
Maintenance: This process mainly include updating as well as repairing of equipments.
In context of Tesco, an organisation has implemented new system of hand held
computers for employees. The purpose of implementing this system is to deliver crucial
information to sales team (Ramanathan, Wang and Yang, 2018). Other objective is to simplify
their stock as well as order operation for client.
Capacity planning and control : It reconciles the required availability for operations goods or
services with operations capacity to deliver them. Capacity represents major facilities,,
manpower, machines and all the other resources which are needed for planning and controlling.
In context of Tesco, business entity have space to put fresh fruits and vegetables.
Staff : Tesco has employed two managers. In addition to this, an organisation has sufficient
manpower of executing operations (Divyaranjani, 2018). Save as you earn scheme has assisted
management in motivating employees to increase the contribution in achievement of operational
objectives.

Suppliers: Tesco has suppliers in ninety-eight countries.
Supply chain planning and control : Supply chain management supports an enterprise in
managing flow of information and material between chain of supply network. Steeling wheel
approach has been used by Tesco for managing supply chain.
Quality planning and control : this operational procedure seek to deliver goods or services at
their required specification. Tesco has strictly asked their suppliers to make sure that safety,
quality and all the environmental standards are considered when growing fruits or vegettables.
Illustration 1: Transformation procedure
(Source: Introduction to Operations Management, 2018)

C ) Analysing the way different process types has assisted organisation in improving the ability
of accomplishing operation objectives
As per the slack (2007), operational Strategy can be referred to as complete pattern of
decision making which design the long term capability of any operation and their contribution to
other business strategies. Customer satisfaction is the main objective of Tesco. Considering the
competitiveness and customer satisfaction, manager in Tesco has set various operational
objectives these are quality, speed, flexibility, cost and dependability.
In context of Tesco, management in company has taken high initiative for reducing the
cost and for ensuring that they work in better, cheaper and simpler way. For example, Tesco has
implemented one of the best information technology which has helped an organisation in making
supply chain effective. Information technology has provided management an ease in retaining
control over stock or inventory in warehouse. In addition to this, warehouse optimisation as well
as automatic order proposal process has assisted business entity in facilitating a fast business
with minimum costs of logistic. This procedure has helped Tesco in reducing the prices of their
products and in increasing profitability.
According to the slack et.al., (2004) Quality is another crucial operational objective of
Tesco. Quality is considered to be as the significant elements in context of customer satisfaction.
It is very much important for manager in Tesco to ensure good quality of operations as this will
business entity in increasing dependability and reducing costs. In context of Tesco, manager in
Tesco has employed more number of talented and skilled employees in order to improve
availability of products or services (Mohr and Batsakis, 2018). In addition to this, club card
scheme has been launched by organisation which has helped them in developing the
understanding about consumers.
In context of Tesco, implementation of new system of hand held computers has supported
an enterprise in increasing speed as well as assisted in improving quality and flexibilities of
workers responding to queries of clients.
D) Analysing the procedure and providing the recommendation for improvement.
As per the analysis of the procedure mentioned above, Operation manager in Tesco need
to consider all the five performance objectives these are quality, speed, cost, dependability and
flexibility while developing the operational strategy. In context of Tesco, flexibility that is
innovative goods or services and cost (low price of products) are the two important factors which

has assisted an organisation in achieving success and fostering growth. It has been analysed that
business entity consolidate all orders which are passed to external suppliers with proper control
of purchasing process. An organisation has implemented the quality management soft-wares and
screen capturing platform for automating as well as optimising its approach to quality
measurement. It has been analysed that development need analysis is the procedure which is
executed by manager in Tesco for measuring the performance of operations. Development need
analysis has assisted Tesco in reducing the time taken for evaluating performance.
Recommendation to TESco is thta it should bring consistency in approaches to customer
services. Management in Tesco has been provided with suggestion to concentrate on developing
the workers. Other suggestion to firm is that it should implement advance technology at
workplace, as strategy will provide firm an ease in developing new products or services. In
addition to this, other recommendation to business entity is that management in enterprise should
concentrate on increasing as well as improving operational capabilities of online grocery
shopping (Kumar Mangla, Bhattacharya and Luthra, 2018). The other suggestion is to the
operation manager in Tesco is that they should consider the various factors such as amount of
raw material to be order, time of placing the order and the way system will be controlled etc.
when making inventory decision.
CONCLUSION
It has been concluded from the report that an organisation have an effective operational
management but still there are scope for improvement. The other thing which has been
concluded from the assignment is that firm has achieved success in operational management. It
has been concluded from the assignment that success as well as growth of the company is highly
dependent on the operational efficiency as well as skills posed by employees. The important
which has been found during the study is that business entity has made good operational
strategies which has helped them in providing the high level of satisfaction to clients. It has been
concluded that consumers or shoppers have high level of satisfaction related to the products or
services offered by enterprise. Business entity has unique operational strategy which has helped
firm in gaining competitive advantage. It has been concluded from the above that steering wheel
is the best approach of measuring the performance of operations.
The advice given to company is that it should continue with its innovative strategy, as
this will help an organisation in maintaining its position in industry. It is important for the

human resource manager or leader in an organisation to provide suitable as well as timely
training to employees as this strategy will assist them in increasing the working efficiency which
is crucial for accomplishing desired operational objectives. Economic order quality model can be
utilised by operational manager in Tesco as this will assist them in determining the need of stock
replenishment. Management in enterprise need to bring improvement in its performance
management procedure.

REFERENCES
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