An Analysis of Tesco's Supply Chain Management Practices

This report provides a comprehensive analysis of Tesco's supply chain management. It begins with an introduction to supply chain management and its impact on Tesco, then delves into the types of supply chain relationships the company maintains, including manufacturers, retailers, and customers. The report examines the integration and collaboration within these relationships, and the role of IT systems in aiding this integration. It also explores strategies for improving supply chain relationships. Further, the report discusses the role of modern information systems in enhancing supply chain visibility within Tesco. The report also analyzes the impact of logistics and the supply chain on Tesco's ROI. Procurement strategies, outsourcing practices, and risk mitigation are examined, along with Tesco's approach to sustainability, including initiatives like Loop and Tech against Trafficking, and the use of reverse logistics. The report concludes with recommendations for further improvements in Tesco's supply chain management.

SUPPLY CHAIN
MANAGEMENT
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Contents
Introduction......................................................................................................................................3
Supply chain relationships...............................................................................................................3
Types of supply chain relationships in Tesco.........................................................................3
How integrated or collaborative these supply chain relationships and do they employ IT
system to aid integration and collaboration............................................................................4
Describe ways in which supply chain relationship can be improve.......................................4
Supply information system..............................................................................................................5
How have modern information system aided supply chain visibility in Tesco......................5
Impact of logistic and supply chain on ROI for the Tesco.....................................................5
Procurement and outsourcing..........................................................................................................6
Examine how Tesco procurement strategy mitigates supply risk..........................................6
Evaluate Tesco outsourcing in terms of competence and competition..................................7
Sustainability....................................................................................................................................7
What Tesco is doing to improve supply chain sustainability.................................................7
Discuss use of “Reverse logistics”.........................................................................................7
Conclusion and recommendation.....................................................................................................8
References........................................................................................................................................9
Books and referrals.................................................................................................................9
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Introduction
Supply chain management is described as the management of flow of product and services.
It includes all the process that transforms raw material into the finished goods. It includes the
active streamline of the supply of business side activities and actions which maximise the
customer value and helps in gaining of competitive advantage in the market and among
competitors. Relationships in supply chain management affects all the areas of supply chain and
it contain dramatic impacts on the performance. In some of the cases, various technologies,
information system, transportation management and inventory management are requiring efforts
for the available ready to implemented (Hahn, 2020). But due to poor communication and less
interaction these initiatives become fails and results in decrease in profits of the company. in this
given report the organisation which is considered is Tesco. It is the largest organisation of UK
and it is focusing on the implementation of their new initiatives through supply chain
management. This company was founded in the year 1919 by John Cohen and it is locating in all
over the world. Company has more than 7,500 shops in the market in different locations. In this
given report there is a discussion of types of supply chain relationships, also this contains supply
chain information system, details about procurement and outsourcing, then it contains
sustainability of the supply chain management of the organisation.
Supply chain relationships
Types of supply chain relationships in Tesco
Tesco is the largest retailing company as it has a strong supply chain management ad there
are certain relationships and networks of supply chain which could affects its performance and
activities. As there are certain supply chain relationships which are discussed below:
Manufactures: They are the most important for the company as they produce products and
services and they provide services and hardware (Manhart, Summers, and Blackhurst, 2020).
They can even change business models. They are considered as a network enterprise.
Retailers: Retailers are the next best to whom company have to make better relationship in
order to sell their products and services to them. They are becoming resellers and store the
products in store ad keep them secure for digital age. They are one who are direct contacting
with the customers. they provide delivery in all over the world and serve to customers.
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Customers: Customers are another type of supply chain relationship which Tesco has to
make effective relationship because they are one who are purchasing their products and services.
They are engaging with multiple sellers. Tesco keep maintain good relationship with customers
because they are one who are making company as success.
How integrated or collaborative these supply chain relationships and do they employ IT system
to aid integration and collaboration.
The integrated supply chain management is using number of terms that are indicating need
of closure relationships which consist of coordination, operations and commitment and trust
which is between supply chain managements and to ensure success of company (Pohlmann, and
et.al., 2020). In supply chain management, there are various nodes which play major role in these
are customers, retailers and manufactures. Company needs people for the supply chain to be
integrated towards the process. Supply chain management activities are also considered as a
collaborative because it consists of various activities which are to be coordinated by many of the
popular and employees in order to achieve organisational gaols and objectives.
Describe ways in which supply chain relationship can be improve.
There can be various ways in which Tesco can improve it supply chain management
relationships. These can be solving by using various steps these are like Categories the suppliers-
company should have to categorise the suppliers because the materials which they supply are
difficult to source and are critical to supply their quality of the end products. Then another
company is using another method which is Monitoring performance of supply chain partners-
Tesco could focus on measuring employee’s performance of supply chain managements in order
to monitor the service which is being provided by suppliers (Rejeb, and et.al., 2021). Then
another step for improving supply chain relationship is Establish service level agreements with
suppliers- as in this company should have to define the specific conditions of the business which
are level of quality, notice period ad special packing requirements etc. there can also be
requirements of suppliers and results in having similar agreements.
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Supply information system
How have modern information system aided supply chain visibility in Tesco.
As now a day’s supply chain management is increasing complex. As this is involving
many of the suppliers about 1,00,000 for the Tesco. Leaders of business have struggle to
maintain visibility which transfer shipment to destination. Visibility is a word which is for
supply chain stakeholders, logistics and decisions that enables to operate their functions
effectively. And also, they protect los from products and increase their profits (Román, and et.al.,
2020). Now a day’s visibility is using as a central challenge which is for challenge for supply
chain mangers because now a days there are no clear visibility in supply chains. There is a
visibility through data- as it is said that visibility is enhancing IOT solution which can track
shipments and condition of the up and down to the supply chain. Then another is tracking assets-
modern information system like now a day’s technologies is tracking assets of entire supply
chain journey and this can be done by managers of the companies. In context with Tesco, when
there is a connection to global OG networks, then sensors deliver information about the
containers across far- reaching distances. So, when there is a shipment pass through checkpoints,
then mangers of the company should be able to see the progress and communicate with the
drivers. Next is monitor container conditions- As IOT enables not only to communicate eth
locations of shipments but also it can deliver the updates which is o container conditions. For the
supply chain mangers, it is required for tracking of the perishable goods so they can even see
about the condition of the containers.
Impact of logistic and supply chain on ROI for the Tesco.
It is said that logistic is impacting the supply chain amendment on ROI and also it is
management flow of products and services from suppliers to the customers (Saqib, Z.A. and
Zhang, Q., 2021). Supply chain process includes flow of goods and services, information and
financial information. supply chain management helps in success of the company as Tesco is
retailing company and this can be made possible by making possible changes and maintain
proper execution process of supply chain process (The Impact of Third Party Logistic on The
Supply Chain Process in The Case of Tesco, 2020). And company is still making changes and
improving their supply chain process day by day. Company is outsourcing very little of the
warehouse and its distribution operation to the third party logistics. The third party of the logistic
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is providing logistic service in Tesco. If the management of the logistic is perform functionally
then it allows company to achieve their future profits and revenues. It is survey that to determine
the practices and procedures they had to take a place which is to maximise the return on supply
chain technology. As it is seen that technology application in which ROI was reported as failing
and was forecasting planning systems. Data timelines is considered as a key factor which obtains
successful ROI for investment.
Procurement and outsourcing
Examine how Tesco procurement strategy mitigates supply risk.
Tesco is using various ways in mitigating their supply risk in effective manner. The actual
process may be different from organisation to organisation (Shekarian, and Mellat Parast, 2020).
And this is considered as risk management process. There are some of the steps and wats in
which Tesco procurement strategy is mitigating supply risk. These are:
Risk identification: Risk can be related with the key suppliers for bankruptcy. As Tesco
needs to identify all risk and of all sizes. As every risk to be identifies and there is a risk of
keeping track to them.
Risk analysis: Then there could be analysis of the risk which can be divided into two
criteria- these are impact and livelihood. These risks can be graded on numerical scale. As every
risk should be related with the procurement.
Risk mitigation: Once the risk is identified then company should have to rank and need to
make plan according to the mitigation strategies and contingency plans. They have to make sure
that all the stakeholders note their roles and responsibilities of the risk occurring.
In addition, it is said that procurement strategy helps in mitigating various risks and issues.
These can be solved by analysing spending patterns- to avoid any type of misleading and
misunderstanding business budgets could not match actual spending patterns. For that Tesco
offers procurement software which could helps in utilising modern technologies (Siwasilchai,
Bua-in and Shoommuangpak, 2021). Also, this provides packages which gives an ability to track
and utilises transactional data at every purchases. Then another is Easy contract management- as
because of procurement strategy, it is simple to view the contracts and for each of approved
vendors which is through transactional data.
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Evaluate Tesco outsourcing in terms of competence and competition.
A core competency is referring to the skills the company they do anything that can firm do
to gain competitive advantage. Tesco suggest that they are having three criteria. These are
customers should get benefits, competitors should find difficulty to imitate and the core
competence can be transfer to many products and markets. The major core competency of Tesco
is that customer focused strategy. As Tesco allows customers to get Clubcard rewards schemes
and allow company to collect and analyse customers well understand. Tesco Clubcard helps the
customers in doing online shopping by getting discounts and points which in return will provides
them various offers and discounts (Wamba, and Queiroz, 2020). In context of competition,
company outsourcing helps them in gaining competitive advantage in the market as they help in
getting more customers. in addition, Tesco has to gain customers base, their profits and revenues
and provides quality of goods and services which results in gaining competitive advantage for
them.
Sustainability
What Tesco is doing to improve supply chain sustainability.
Procurement professional are the ideal position in order to address the sustainability issue
and problems in supply chain management. First that is used by company is Loop- as this
scheme which is used by most of the company in shopping and recycling platforms which
enables FMCG company to work with recycling company to get more sustainable packaging in
their products. It is used a best responsibility which is being used by Tesco in order to specially
designed their products that is through recycle, reusable and avoid using of plastics. They are
allowing packaging from alloy and glass. Customers are shopping from Loop website in order to
get waste free products and durable packaging (Sustainable supply chains: Tesco is next to take
Loop packaging, 2020). Another that is use by Tesco is Tech against trafficking- now a days
many of the company are merging with each other in order top combat human trafficking in
supply chains who are looking to improve and developing their technologies such as blockchain.
Discuss use of “Reverse logistics”.
Reverse logistics is referring to the moving of goods which is from destinations back to the
seller and to the manufacturer. Then there is a use of Reverse logistics which is helping company
in recapture value. There are use of recycling- as it is possible to recycle some of their products
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and their components (Zaridis, Vlachos, and Bourlakis, 2020). This is considered as more
sustainable substitute than flinging in a trash. Then reuse- as many of the products can be reused
and this process provides monetary funds to the end users. Then another use which is being used
by Tesco is Replacement- as now a days E- commerce websites so popular so they are replacing
faculty products that can match expectations that is much easier. For this many of the reasons,
many of the brands which are to be for replacements of the products and services that are being
used by many of the people to improve customer satisfaction. In Tesco many of the manufactures
are more interested in the logistics. Because reverse logistics keeps people consuming without
forgoing the sustainability. Then it helps in people position of waste properly.
Conclusion and recommendation
From the above report it has been concluded that supply chain management is the one of the
most important activity which is being performed by every company effectively. As if there is a
good supply chain management then this results in good supply chain relationship between the
suppliers and the company as a whole. Tesco is using modern information system which helps
them in getting visibility in supply chain managements and also company is more focusing on
their procurement strategy to reduced their risk in effective manner. So, the company’s is more
focusing on their procurement strategy in order to mitigate their risk through various
procurement software. Then Tesco is providing loyalty cards and Clubcard to the customers in
order to compete with their competitors and gaining competitive advantage in the future. Then
company is moving forwards to improve their supply chain management sustainability’s in
various field. This can be done through improving their customers base through providing them
quality of goods and services and using other things also. It is to be recommended from above
that Tesco should have to merge with other companies so they could expand their business more
and enhance their customers. and on the other hand, they can also make effective use of their
supply chain due to some of the new innovation and inventions occurring in the market.
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References
Books and referrals
Hahn, G.J., 2020. Industry 4.0: a supply chain innovation perspective. International Journal of
Production Research, 58(5), pp.1425-1441.
Manhart, P., Summers, J.K. and Blackhurst, J., 2020. A meta‐analytic review of supply chain
risk management: assessing buffering and bridging strategies and firm
performance. Journal of Supply Chain Management, 56(3), pp.66-87.
Pohlmann, C.R and et.al., 2020. The role of the focal company in sustainable development goals:
A Brazilian food poultry supply chain case study. Journal of Cleaner Production, 245,
p.118798.
Rejeb, A and et.al., 2021. Potentials of blockchain technologies for supply chain collaboration: a
conceptual framework. The International Journal of Logistics Management.
Román, I and et.al., 2020, July. Modeling the Integration in the Peruvian Quinoa Supply Chain:
A Sustainability Perspective. In International Conference on Applied Human Factors
and Ergonomics (pp. 255-262). Springer, Cham.
Saqib, Z.A. and Zhang, Q., 2021. Impact of sustainable practices on sustainable performance: the
moderating role of supply chain visibility. Journal of Manufacturing Technology
Management.
Shekarian, M. and Mellat Parast, M., 2020. An Integrative approach to supply chain disruption
risk and resilience management: a literature review. International Journal of Logistics
Research and Applications, pp.1-29.
Siwasilchai, S., Bua-in, N. and Shoommuangpak, P., 2021. GUIDELINES FOR SUCCESSFUL
SUPPLY CHAIN MANAGEMENT IN INDUSTRIAL BUSINESSES. Academy of
Strategic Management Journal, 20(3), pp.1-14.
Wamba, S.F. and Queiroz, M.M., 2020. Blockchain in the operations and supply chain
management: Benefits, challenges and future research opportunities.
Zaridis, A., Vlachos, I. and Bourlakis, M., 2020. SMEs strategy and scale constraints impact on
agri-food supply chain collaboration and firm performance. Production Planning &
Control, pp.1-13.
Online
Sustainable supply chains: Tesco is next to take Loop packaging, 2020. [online] Available
through <https://www.cips.org/supply-management/analysis/2020/february/sustainable-
supply-chain-action-tesco-loop/ >
The Impact of Third Party Logistic on The Supply Chain Process in The Case of Tesco, 2020.
[online] Available through < https://www.researchomatic.com/the-impact-of-third-
party-logistic-on-the-supply-chain-process-in-the-case-of-tesco-76510.html >
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