Tesco: Analysis of Supply Chain Operations, Issues and Strategies

This report provides a comprehensive analysis of Tesco's supply chain management. It begins with an overview of Tesco's operations, emphasizing its supply chain structure and key departments involved in procurement, processing, and distribution. The report identifies and examines several critical issues, including complexities in manufacturing, inventory problems leading to food wastage, and quality control challenges. It also highlights issues related to the vertical integration of the supply chain, which limits the company's control over manufacturing processes. The report suggests several strategies to mitigate these issues, such as improving service delivery, adopting intermodal transportation, and developing expertise in sea freight. It also recommends implementing modern information technology systems, establishing remote stations for better control, and adopting operational management approaches like Just-in-Time and lean management. Furthermore, the report suggests strategic partnerships, streamlining international operations, and focusing on point-of-sale information and customer demand to enhance supply chain efficiency. The report concludes with a summary emphasizing the importance of effective operation and supply chain management for overall business performance and customer satisfaction.

Operations Management

EXECUTIVE SUMMARY
The report is all about operation management. Brief overview of the supply chain
operations facilitated by Tesco has been done. Analysis of the complete supply chain operations
has been done for identifying the problems being faced by company. All the issues faced by the
Tesco in facilitating operations have been highlighted in the assignment. Root cause of problem
has also been highlighted in the assignment. Some strategies that can be applied for solving the
problems are suggested in the report.

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Background of organization.........................................................................................................1
Overview of its supply chain management operation..................................................................1
Analysis of Issues faced by Zara in managing supply chain.......................................................3
Recommendation of strategies.....................................................................................................3
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Operation management can be referred to as administrative practices which are
conducted in order to increase efficiency within an enterprise. It can also be defined as
transformation of inputs into useful outputs. Operation management is important for smooth
functioning of business. Success and growth of enterprise is completely based on its operation
management (Subramanian& Ramanathan, 2012).
The report will have focus on observing and analysing the problems faced by Tesco in
facilitating its supply chain operations. Some recommendations have been given in the study
which can be applied for solving operational issue.
Background of organization
Tesco is a multinational British company operating business in retail sector. It possess the
business operations in more than 14 nations. Tesco mainly concentrate on creating value for its
clients. Key purpose of Tesco is to earn loyalty of its clients. An organization has efficient as
well as value based supply chain management with the support of which goods or services are
being delivered to customers on timely (Ferk, 2019).). Business entity has made certain policy
as well as developed procedures in order to make sure that all food items that is vegetables as
well as fruits are grown in eco-friendly manner and as per the prescribed standards. Company
Nurture policy is also applicable to all other goods being offered to customers. The Automated
ordering system has been implemented by Tesco for making sure that an enterprise replenishes
supply of goods to its clients convenience.
Overview of its supply chain management operation
The supply chain procedure of Tesco mainly includes transformation of input, adding
value to goods through assembling as well as processing the raw products then delivering the
output in form of finished product to customers. In simple words, the chain of procurement,
procedure and distribution is known as supply chain management (Croom & Brandon-Jones,
2005). There are few departments in Tesco which produces goods and other functional division
is mainly responsible for distribution of goods or services to clients. Tesco utilizes the supply
chain management system in its operations. In addition to this, supply chain of Tesco is based
on mainly three variables these are increasing availability of clients, utilizing scale of business
for minimizing wastage of food and improving healthy relationship with suppliers for improved
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efficiency (Brandon-Jones & Kauppi, 2018). An organization also has four teams for managing
their supply chain this team are the development as well as blueprint team, supplier ordering
team, store ordering and security as well as loss prevention team. Development and blue print
team is mainly accountable for making sure availability of food products and reducing the
wastage of same. Supplier ordering team is responsible for planning manufacturing as well as
supply of goods. Store ordering team is liable for ensuring availability of right amount of stock
(Matinheikki et.al.2019). Other that security and loss prevention team is accountable for making
sure that all the safety standards are being followed (Brandon-Jones, Piercy & Slack, 2012). An
organization has high number of distribution centres in supply chain. All these distribution
channel has significance effect on the productivity of firm. One key fact is that structure of the
Tesco outlets plays an important role in supply chain management (Lewis Br,andon-Jones, Slack
& Howard, 2010). In relation to inventory, other goods are being ordered once per week whereas
food items are being placed on daily basis. In addition to this, Tesco utilizes multimodal
transport for making sure that client get the delivery of goods on time and at right place
(Brandon-Jones & Kauppi, 2018). Management in Tesco select the transport mode which has
high capability to secure quality of goods. Tesco also uses big data analytics which has mainly
provides ease in analyzing sales pattern and helps in determining the demands of customers. In
addition to this, Tesco administers end to end supply chain (Tuni & Rentizelas, 2019).
Management in Tesco takes high initiatives for maintaining the prices of goods or services in
order to have smoothness in their supply chain. In relation to Tesco, there are number of quality
as well as control procedure which has become part of Tesco supply chain (Slack, Chambers &
Johnston, 2010). In addition to this, other issue faced by company is that when firm planned to
rise its capacity of distribution its development started to lag behind the set schedule. Tesco
provides customers home delivery option. Tesco, level of supply chain effectiveness as well as
the logistic operations are benchmarked by the competitors (Brandon-Jones & Knoppen, 2018).
Presently, inventory is on regular basis and the, orders of the stock are process centrally. Plans
and schedule for manufacturing are created and the same is then transported to store after
sanction by top level authority in an organization.
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Input –transformation- output model
It is the model which will demonstrate the nature of procedure as well as operation of
Tesco.
In context of Tesco, the below diagram represents the input-transformation and output system of
organization.
Analysis of Issues faced by Zara in managing supply chain
Design of the Tesco supply chain is very much complex because of which an
organization has been facing number of issues. It has been analysed that number of complexities
is associated with manufacturing procedure. The other thing which has been analysed is that
Some of the problem which is faced by Tesco in context of supply chain management is related
to inventory issues that is increase in wastage of goods specially food items. It has been analysed
that due to the complex supply chain finest goods are containing the Equine contaminate (Nigel
& Brandon, 2018). In simple words, due to the complexity of supply chain Tesco is facing the
quality issue which results into reduction in sales of organization. Other issues related to the
supply chain faced by Tesco is related to the manufacturing procedure, as this system is
vertically combined with supply chain which has led to the less control of company over
manufacturing procedure (Oliveira & Handfield, 2019). It is the main reason because of which
Tesco is facing issue in maintaining the quality standards.
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Input resources
Operations &
procedures transform
inputs into outputs.
Output goods
&services
Products for sales,
salesperson,
customised registers,
clients
Management of inventory,
displaying of goods,
preparing for delivery of
goods, sales
Assembling of clients
as well as products
together

Recommendation of strategies
As Tesco is facing number of issues in managing its supply chain, one of effective
solution for the problem is that organization is for maintaining a consistency in service delivery
system globally is required to make changes in service operations. The fields where Tesco need
to make essential transformation include administration of warehouse, international logistics
system and consistent replenishment policy (Ollikainen, 2018).). Business entity can adopt
intermodal intercontinental mode of transportation. In addition to this, other suggestion to Tesco
is that an organization should develop an expertise in sea freight transport. Development of the
expertise in sea freight transport as well as establishing central warehouse strategy will assist
firm in accomplishing economies of scale and would support business entity in controlling costs.
In addition to this, it has been suggested to Tesco that it should implement modern information
technology system, as this tactics will support enterprise in gaining the competitive advantage.
By using the advance information technology Tesco by facilitating innovation in supply chain
can increase its profitability (Kilic, Brandon-Jones & Giannikas, 2019).
Other suggestions to Tesco are that business entity need maintaining consistency in its
service operations internationally (Oliveira & Handfield, 2019). Consistency in service
operations can be maintained by establishing remote station that could be utilized for retaining
control as well as tracking of goods or services with the support of satellite sensing technology.
By implementing the establishment of remote station, Tesco will be able to provide customers
with high level of satisfaction that is very much crucial for long term growth of firm. In addition
to this, Tesco could also implement dual monitoring system as well as Warehouse administrative
system. Just in time or lean management are the two operational management approaches, which
can be adopted by Tesco (Tuni & Rentizelas, 2019).
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Figure 1: Lean Management
(Source: Nigel & Brandon, 2018)
In relation to the Just in Time approach, In addition to this, it has been advised to Tesco
that it should streamline its international operations as this tactics will assist an organization in
developing cost effective competencies over competitors. Tesco can also implement Enterprise
resource planning system, as it is the strategy, which support the organisation in increasing the
value of its supply chain at international level. Other suggestion to Tesco is that company can
indulge into strategic partnership with international suppliers for that firm might have to reduce
its profit margin. However, such issue of low profit margin can be eliminated through an
effective as well as proper supplier management program (Slack & Brandon-Jones, 2018). It has
been advice to management in Tesco that to share complete information with suppliers as
through this tactics high transportation costs can be offset by the profitability in supply chain.
Other solutions which can be applied by Tesco for dealing with supply chain issues that firm can
rely more on point of sales information. Secondly, it has been advice that Tesco need to
concentrate much on the demand of the customers. It is required by management in an
organisation to develop understanding that smart trade off between cost as well as service is very
much crucial for achieving desired objectives as well as providing high level of satisfaction to
clients. In addition to this, Tesco can develop an agile supply chain with rapid planning. Tesco
need to align its business objectives with supply chain through proper integration of sales as
well as operations.
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CONCLUSION
The report concludes that a proper management of operations is very much essential as it
plays a significant role in boosting the overall performance of company. The other fact, which
has been discovered, is that proper management of supply chain is very much crucial for
delivering the quality and timely goods or services to customers.
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REFERENCES
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Subramanian, N., & Ramanathan, R. (2012). A review of applications of Analytic Hierarchy
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