MGT 6801: Tesco Supply Chain Management Analysis Report

This report provides a comprehensive analysis of Tesco's supply chain management, examining how logistics and supply chain principles are applied within the company. It explores the support, delivery, and development of Tesco's supply chain, focusing on customer service (inventory management), transportation, warehousing (capacity management), and its impact on competitive advantage. The report identifies critical issues and problems faced by Tesco in its supply chain, such as quality customer service, costing, risk management, and supplier relationships. It then investigates how Tesco's management perceives and responds to these challenges, including their strategies for inventory, transportation, and information management. Finally, the report offers recommendations for improving Tesco's supply chain management, considering its strengths and opportunities in the evolving retail landscape, and emphasizing areas like online presence and sustainable practices.

Supply Chain
Management

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK...............................................................................................................................................3
How logistics and supply chain management is supported, delivered and developed in Tesco. 3
Critical issues or problems faced by company in their supply chain management...............4
How the company and management handle and response towards problems or issues of
supply chain............................................................................................................................6
Recommendation or suggestion to improve supply chain management................................8
CONCLUSION ...............................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Supply chain management is a management of converting raw material into end product
or services. This combines flow of product or services in transforming final product of a
company. It aids in creating brand image and contributes in achieving competitive advantage. It
provides proper layout in planning, operating and controlling activities of supply chain. Logistic
and supply chain management helps company in its costumer service, transportation,
warehousing and competitive advantage. It covers all activities from sourcing to deliver product
or services. It aids in handling whole flow of production to enhance superior quality, delivery,
consumer experience and productivity. The chosen company in this report is Tesco. This is one
of the largest supermarket in UK, that mainly deals in groceries and merchandise retailer. In UK,
It is most profitable industry in retail. It is successfully established by Jack Cohen in 1919. This
report includes problems faced by the company and their management. It consider the reaction
of mangers towards issue in logistics and supply chain management. This also include suggestion
to improve its supply chain management.
TASK
How logistics and supply chain management is supported, delivered and developed in Tesco.
Supply chain and logistic is essential in superior quality of goods, particularly when
goods is perishable. The structured or efficient organised supply chain aids in faster goods or
services in retail store. This made more attractive and appealing to consumer that increase sale of
store(Challenges in supply chain management, 2021). Tesco is revising their own chain of
supply and logistic for fasting delivery of product. This will help them in delivering fresh
product and eliminate food waste. They have evolved their supply chain and logistic from
previous years. Effective supply chain improves costumer services that is inventory
management, transportation, warehousing that is capacity management and final contributes
company in gaining competitive advantage. Control in inventory management influenced by the
demand of products. By effective control they can easily manage and satisfy the demand of store.
They can manage availability of stock as per costumer preferences. It improves costumer
services and their experience towards organisation supply chain. Availability of inventory satisfy
potential costumer and generate revenue. The transportation system of this company also gets
strong because it provides proper layout for company. Tesco is a large super market that has to

transport its goods or services from one place to another (What is supply chain management,
2020). For that they need appropriate analysis of demand and supply of products. Effective
supply chain facilitate its transportation facilities. Ware housing refers to capacity management
where company can store their raw material or inventory for transforming final goods of
company. It empowers international business of company, that combines to reflect complexities
in business process and provide higher competitive advantage towards changing environment
sentiments as company can deliver more satisfied goods or services to target consumer as
compare to competitors. Business process link and connected at various level of suppliers or
distributes (Schniederjans and et.al., 2018). By reducing business complexities such as reducing
inappropriate business operations activities , it provides competitive advantage. It consist
analysis of manufacturing process to find-out related issues. It analyse superior quality, cost,
adaptability, delivery to ensure sustainable competitive advantage of company. It priorities all
the activities related with company strategy in production, operation and distribution system.
Critical issues or problems faced by company in their supply chain management.
Tesco has been classified and transform their supply chain into five stages. Key issues or
problems are differentiate in each stage.
 Direct to store delivery- Company had structured or organised suppliers who mainly
control operations. Earlier there was no price setup in retailing so they had minimum
control. There were no standard maintain in their suppliers. This influence operations of
company on large scale.
 Centralization- Suppliers or manufactures has to deliver its goods at Tesco centres
instead of their stores. They started outsourcing their function operation in company and
provide wide range of goods with superior quality (Babagolzadeh and et.al., 2020). For
selling, regulators established price control on goods or services. The distribution store of
company started alignment on basis goods line.
 Composite- They started developing their regional centers for establishes specified
temperatures for particular product. They also maintain and adjust temperature of goods
while transportation. This facilitate quality of goods and remove waste (Patel and Desai,
2019). Through effective deliver system they develop additional space in their stores to
eliminate need of stocks. They utilised appropriate structure of store layout to enhance
productivity level. They started creating super store layout for their convince. Quality

was enhanced during cost reduction. They easily manage inventory by holding optimum
level of stock.
 Vertical collaboration and lean supply chain- In this era Tesco practice lean system of
supply chain to eliminate waste in production process. They create transparency while
making value stream. However planning of stock not tied for long time in their centers of
distribution. Refilling of order mainly depend on the demand of customer. They
established contact with their suppliers to improve environment and development of
technology. They considered logistics as flow of transformed goods into ready-made
merchandise.
 Managing complexity- In this stage they moves towards global supply chain which is
more complex form of supply chain. They develop different layout of store as per size
and location. They provide online channels or services to their potential consumers. To
measure effective performance they introduce balance score card and steering wheel
concept. To make fastest supply chain they use RFID technology. To increase cost
advantage they adopt sustainable concept for profitability of company.
In realistic measure Tesco perform complex model of supply chain. In past years they
successfully distribute more goods or services to their store worldwide. They mainly focus on
maintaining stock of products as per their potential consumer. In global chain of supply, they
divisible and maintain co-ordination between ships, trains, trucks and plans . They believe that
they are multichannel retailer as they prove wide category of goods as per the demand of
consumer. They always try to maintain superior quality of goods and provide new products to
their potential targeted costumers. Tesco company faces major seven problems in their supply
chain management.
Quality customer services- This chain of management have to deliver right quantity at
right quality in right money for goods or services to their costumers. This require perfect timing
and planning.
Costing- Cost of workers and raw material is increasing day by day. For operation of
business process they need to control all operation and reduce waste to deliver product at
affordable price.

Risk management- Company have to manage various constant changes in their
operations that generate risk and influence performance. Like consumer, global, political factors
etc.
Supplier relationship- They have to build strong relationship between partners and
suppliers to provide standardised product to their costumer.
Qualified personnel- It is a biggest challenge for company to hire skilled and qualified
workforce within available budget of company. Skilled labour charge high package of salary.
Changing market- Technological advancement changes market and industry sentiments
(Lai, Sun and Ren, 2018). They have to keep on update their technology and introduce
innovation in operations of company.
Unforeseen delays- Some times company have to face delay in their delivery system
through transportation system. They have to outsource material from different parts of country
and deliver product at different destinations.
How the company and management handle and response towards problems or issues of supply
chain.
The excellence in supply chain management of Tesco is depend on following element.
 Satisfying costumer need by increasing availability of stocks.
 By scaling method they eliminate waste of food while maintaining quality and
healthiness as scaling method involves association of business process into qualitative
measures of production.
 Enhancing efficiency in business operations and build relationship between partners and
suppliers.
The management and company established team to handle problems in supply chain of
management.
The development and blueprint team- This team ensure availability of stock while
eliminate food waste. They utilise innovation for gaining competitive advantage and practice
problem solving analytical chain method in supply. Previous year they save lots of money by
using this model of supply chain analytics (Tokar and Swink, 2019). They collectively work with
their suppliers teams worldwide to enhance chain supply of various team.

The supplier ordering team- The main aim of this group is to handle supplier or buyer
group in planing. Company order their suppliers in large quantity. They successfully maintain
biggest chain of supply in UK.
The store ordering team- The main goal of company is to handle appropriate level of
stock in each stores. As per the consumer demand store manager act and plan accordingly. It
increase costumer base and their experience towards company.
The security and loss prevention team- Objective of this team is to improve working
culture of Tesco and ensure health and safety standards. This build strong relationship with
costumer and employee.
The managers of Tesco response towards issue of supply chain by developing
appropriate structure in supply chain management.
 Facilities- They handle various distribution stores in their supplier chain management.
These stores influence overall performance and profitability of company. Company opens
various facilities in their distribution. Centre of this company holds major section in
supply chain. It has six types of stores in this system like express, metro, superstore,
hyper market and online stores (Dellino and et.al., 2018). These store layout improve
consumer expectations and experience that generate revenue of company.
 Inventory- The several stores orders various food product such as vegetable, fruits on
weekly basis. They passed problems from inventory to distribution center by eliminating
waste of food. They create appropriate space in store layout for handling minimum store
inventory. this develop linkage by transportation and deliver product in efficient manner.
For handling inventory they adopt advance technology.
 Transportation- The transportation system is very effective of this company as they
have to deliver world wide. They adopt multi model of transportation to provide product
as per the demand of consumer. They manage in-house transportation and practice supply
chain analytics to securing quality measures and standard of product.
 Information- They utilise software of automated data collection to provide information
to their servers. They used big analytics of data to handle inventory activities. This
provide proper knowing of sales patterns demand of potential costumer. They examine
various sources to collect the consumer data of their purchasing behaviour pattern. They
develop system to identify sales pattern in their stores (Sajjad, Eweje and Tappin, 2020).

They taken initiative step using google map by analyse consumer demand from vehicles
parked in their parking.
 Sourcing- They sourcing from various countries so that they will deliver better quality of
goods and services to their potential consumer. They handle supply chain management
and ensure elimination of waste to reduce environmental impact on operations. This
include three supporting role like supply planning, logistics, and business efficiency. This
improve fasting delivery with qualitative product ( Gupta, , Altay and Luo, 2019). They
outsourcing third party for efficient service in all parts of country. It enhance structure of
sourcing for fastened and productive delivery.
 Pricing- Prising has been done to attract more potential costumer. They always try to
manage stable pricing system in supply chain for effective and smoothness in their chain
supply management. They adopted global sourcing for deliver best price to their potential
consumer. It facilitates in the economies of scale to gain competitive advantage.
Recommendation or suggestion to improve supply chain management
Tesco can uses its strength to maximise their opportunities- As costumer moves
towards online shooing, company need to improvised its online presence. However Tesco
holding strong position in e- grocery but still because of its competitors they need to maintain
market section in online selling. They can utilise their financial funds and brand image to achieve
stronger position in the market. By establishing trust in their potential costumer they can achieve
competitive advantage. They can take advantage of their supermarket experience while
expanding in various country. Innovation, creativeness and technology advancement pull new
costumer in their stores with the help of strong value of brand image.
Tesco can also uses its strength to eliminate threats- Through healthy relation with
UK government they can take advantage and convert situation in their favour. Tax implication
can be adjusted as they provide lots of employment creation in the country. They targeted niche
market to strengthen financial sources. They invested in researches department for innovation
and technology up-gradation. They resolve costumer objection by providing assurance of not
using their data against them (Song, , Ming and Liu, 2017). The loyal potential costumer
appreciate their efforts for deliver better service and ignore the fact of using their data. By taking
advantage of Tesco brand they tie up with low cost destination such as Asia or China for low
cost material of goods.

To decrease weakness they must use of its opportunities- They can minimize their
dependency of UK market by introducing their stores in the market of Asia or China. It facilitate
to decrease their risk with the aid of diversification in other market. They can tie up partnership
with domestic suppliers to eliminate high cost in logistic and supply chain. They can achieve cost
benefit by decreasing cost of material to increase costumer base. This will also help them for
managing their financial loses (Malviya, Kant and Gupta, 2018). They should enhance their
online presence through which they can decrease logistic cost because they do not need transfer
product from distribution stores. This will provide them more focusing on resources rather than
managing core business.
By identifying problems here are some solution to enhance logistic or supply chain
Most of the consumer has different needs and preferences so by delivering unique
differentiation in product will change whole situation. Company must invest in new technology
for delivering better services to their costumer. By controlling and monitoring cost then can
improve efficiency in their supply chain. Managers should be always prepared of risk
management this will avoid disturbance in their operation activities. Logistics and supply chain
is essential in entire organisation. Healthy relationship with employee and suppliers improve
better services and efficiency in work. They should hire skilled workers and provide proper
training on regular basis. They have to ensure sufficient buffer stock for smoothing operation in
supply chain. Change is unavoidable, so company have to handle software of logistic
management for efficient changing adaptation. Through this they can flow goods or services and
enhance overall output of company. Organisation need to examine vehicles fuel efficiency that
aids in saving money (Ciccullo and et.al., 2018). This will helps in spreading ecological structure
of business. They must practice quick payment software. This will increase costumer
satisfaction and save time in payment procedure. Tesco need to decrease cost to practise supply
chain activities to avoid any major losses. By improving fastened supply chain they can easily
capture other markets of different countries.
CONCLUSION
The logistic and supply chain management plays vital role in the growth of company.
This is an integral part of entity that improve costumer satisfaction. It aids in enhancing costumer
service, decrease cost of operating, ensure financial stability of company, improve human
survival, enhance quality life, prevent freedom of culture and development. Organisation's

supply chain combines of various benefits like inventory management, capacity management,
transportation and competitive advantage. By managing these company can achieve overall
productivity and efficiency of industry. The main objective of supply chain management is to
reduce cost, improve efficiency and satisfy demand of potential costumer for more profitability.

REFERENCES
Books and Journals
Accorsi, R. and et.al., 2018. A hierarchical data architecture for sustainable food supply chain
management and planning. Journal of cleaner production. 203. pp.1039-1054.
Babagolzadeh, M. and et.al., 2020. Sustainable cold supply chain management under demand
uncertainty and carbon tax regulation. Transportation Research Part D: Transport and
Environment. 80. p.102245.
Ciccullo, F., and et.al., 2018. Integrating the environmental and social sustainability pillars into
the lean and agile supply chain management paradigms: A literature review and future
research directions. Journal of cleaner production. 172. pp.2336-2350.
Dellino, G. and et.al., 2018. A reliable decision support system for fresh food supply chain
management. International Journal of Production Research. 56(4). pp.1458-1485.
Gupta, S., Altay, N. and Luo, Z., 2019. Big data in humanitarian supply chain management: A
review and further research directions. Annals of Operations Research, 283(1), pp.1153-
1173.
Lai, Y., Sun, H. and Ren, J., 2018. Understanding the determinants of big data analytics (BDA)
adoption in logistics and supply chain management. The International Journal of
Logistics Management.
Malviya, R.K., Kant, R. and Gupta, A.D., 2018. Evaluation and selection of sustainable strategy
for green supply chain management implementation. Business Strategy and the
Environment. 27(4). pp.475-502.
Patel, A.B. and Desai, T.N., 2019. A systematic review and meta-analysis of recent
developments in sustainable supply chain management. International Journal of
Logistics Research and Applications. 22(4). pp.349-370.
Sajjad, A., Eweje, G. and Tappin, D., 2020. Managerial perspectives on drivers for and barriers
to sustainable supply chain management implementation: Evidence from New Zealand.
Business Strategy and the Environment. 29(2). pp.592-604.
Schniederjans, M.J. and et.al., 2018. Topics in lean supply chain management. World Scientific.

Song, W., Ming, X. and Liu, H.C., 2017. Identifying critical risk factors of sustainable supply
chain management: A rough strength-relation analysis method. Journal of Cleaner
Production. 143. pp.100-115.
Tokar, T. and Swink, M., 2019. Public policy and Supply Chain Management: using shared
foundational principles to improve formulation, implementation, and evaluation. Journal
of Supply Chain Management. 55(2). pp.68-79.
Online
Challenges in supply chain management, 2021. [Online].Available through:<
https://yourstory.com/mystory/7-main-challenges-in-supply-chain-management-and-h-
rdq2oy6mh9?utm_pageloadtype=scroll >
What is supply chain management, 2020. [Online].Available through:<
https://www.riverlogic.com/blog/what-is-supply-chain-management-and-why-is-it-
important >