Time-Based Competition in Tesco's Supply Chain: A Case Study

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Operations management and the supply chain

EXECUTIVE SUMMARY
In the age of high competition and technological advancements, the companies are
continuously adopting new ways to win over the other competitors. The customers become
more technology friendly and used to instant access to information and quick delivery of
desired products and services. Therefore, the companies are also required to manage and
deliver its products with speed to gain competitiveness in the industry and this can be
achieved through time-based competition. The global organisations like Tesco can gain a
competitive advantage by minimizing the time for accumulating, distribution and delivery of
its products and services.
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Table of Contents
EXECUTIVE SUMMARY............................................................................................................. 1
OVERVIEW OF THE TIME-BASED COMPETITION.......................................................................2
LITERATURE SEARCH................................................................................................................ 3
SCENARIO DEVELOPMENT........................................................................................................6
CRITICAL EVALUATION............................................................................................................. 9
REFERENCES........................................................................................................................... 10
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OVERVIEW OF THE TIME-BASED COMPETITION
Time is an important resource for any business organisation. Every firm should ensure the
improved use of time in order to respond to the continuously changing market conditions
and other environmental situations to gain competitiveness and success in the market. In
the operations management and supply chain, time-based competition could be defined as
a international competitive strategy that considers time as a key factor for attaining and
managing a sustainable competitive advantage (Suri, 2016). It focuses on compressing the
time required for proposing, developing, manufacturing, marketing and delivering the
products.
TBC is the extension of Just in time theory in every phase of product delivery cycle. This
term has come into use after it appeared in the Article by George Stalk, Jr. in Harvard
Business Review in the year 1988 (BLACKBURN, 2012). Since then, a large number of
business organisations increasingly adopt time-based competition to dominate its industry
and replenish its stores faster than its competitors.
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LITERATURE SEARCH
Lesser, et al., (2013) has stated that speed has become a cut-throat factor for gaining
success and growth for the companies in the global market competition. The organisations
now tend to competing for rapidly responding to the customer demand as well as to the
new technologies and products introduced in the market. In terms of reaction time, such
types of competition are termed time-based competition. Today, the concept of Time-based
competition requires a holistic approach that would integrate different methods, tools and
concept of management to adjust organisational systems and process concerning time
perspective.
Development of the concept of Time-based competition
According to Mao, (2018) In the current state of global market competition, the faster
manufacturing and speedy delivery of the products and services is very important for the
organisations. The organisations tend to compete in the global business market by rapidly
responding to the introduction of new product and technology in the market and consumer
needs and demands. Proper time management will enable the companies in achieving the
competitive growth and advantage in the market.
According to Sapkauskiene and Leitoniene, (2010) the concept of TBC is appeared in two
different forms: fast to produce and fast to market. The organisations competing with the
market speeds focus on reducing the lead-time for developing new products. The products
introduced on right time generates higher profit as compared to the products brought late
to the market. The fast to market also allows organisations to gain a market edge by
consistently introducing a large number of product variations and new products quicker
than the competitors, thereby dominates the market. While the Fast-to-product
organisations focus on increasing speed in responding to customer demands for existing
products. According to Dempsey, et al., (2014) The organisations competing in fast to
product area tries to reduce lead-time throughout the organisational system from starting
to customer order until the customer ultimately receives the order. It involves the ability to
condense the time for manufacturing products as well as delivering the products to the
customers.
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Hemmatfar, et al., (2010) has stated that an organisation can become a time-based
competitor by carry out the four tasks i.e. understanding the rules of response, making
more flexible and responsible value-delivery system in comparison with the competitors,
pricing capabilities according to customers’ value and applying a strategy for astonishing
contenders with time-based advantages.
IMPORTANT FACTORS IN ACHIEVING SUCCESS THROUGH TIME-BASED COMPETITION
The global business organisations are continuously engaging in a TBC to reduce the amount
of time required at each stage of the general cycle by eradicating unimportant activities and
coordination value-adding activities. According to Dempsey, et al., (2015) Responsiveness,
quality and cost are the three important factors that are highly considered in time-based
competition to attain higher growth and success in the business.
Responsiveness
According to Demeter (2013), Time-based competition involves the analysis of each element
of time used in developing, manufacturing, marketing and delivering a particular product. It
mainly focuses on the factor of responsiveness that refers to the capability to assure the
needs and requirements of customers faster than the competitors do. The variety of
interpretations are required to satisfy customer requirements such as assembling to
requirements, filling an order for shelf stock, engineering to order, and bringing new
products into the market. The management of short cycle requires numerous management
principles such as just in time, total productive maintenance management and total quality
control that could compliment one another. These management principles can effectively
be used for improving competitiveness with simultaneous improvement in processing cycle
time, quality, capital and cost requirements.
Cost
Cost is a very important factor in successfully implementing time-based competition. It is
very essential to establish a relationship between cost and time. Blackburn, (2012) the
companies that try to compress the time from their business cycle also understands that the
over it the direct labour, materials, interest, management and transportation and expenses
add to the overall costs. Therefore, the long business cycle involves larger costs and involves
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slower customer response to the clients. By speeding up the flow of all the organisational
events such as process flow, information flow and decision flow, the cost can effectively
manage. The process flow involves all the business operations, the information flow is
consist of all the business data and information and the decision flow involves all the actions
of individuals in the business.
Quality
Quality is another important factor in successful implementing time-based competitions for
gaining competitiveness and business growth and development. according to Bansal and
DesJardine, (2014) the quality must be maintained along with doing every business activity
faster as one does not have time to do the same work again. The quality of the business
process and products is inseparably linked with the customer satisfaction that is utmost
important for managing time-based competition. The management of time compression
needs to involve deliberate consideration of time on main aspects to ensure the
achievement of right quality. In present, the low-cost products with high quality are
becoming the main strategy of admittance to some markets. Now, the customers are more
tends to think in terms of the overall value of the product by evaluating total enterprise
cost, responsiveness and quality.
According to Demartini and Mella, (2011) The time-based response becomes very critical for
the products with small life cycle such as technology, fashion clothing, cosmetics, gadgets
and toys as they has a high cost of obsolescence. However, some approaches to time-based
competition may have a harmful impact on the competitiveness of the company. The
developments in the international trade and commerce and relocation of multinational
organisations have shaped lengthier response time in the global supply chain. The supply
chain at the global level is facing operational boundaries to TBC.
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SCENARIO DEVELOPMENT
The idea and concept of TBC can effectively be applied to the large business organisations
that are confronting with the severe competition at the global marketplace. Here, the
concept of time-based competition will be applied to the well-recognised retailer “Tesco” in
the UK. Tesco is currently facing high competition from its rivals ASDA, and Sainsbury.
Therefore, the company is in high need for increasing competitiveness to overcome the
competition.
Tesco is a multinational groceries and general merchandise retailer based in the UK. the
company was founded by Jack Cohen in the year 1919. It ranked at ninth largest retailer in
the world in terms of revenues. The company operates in around seven countries across
Europe and Asia with more than 6000 outlets and is a market leader in the UK (Tesco Plc,
2018).
Application of the concept of time-based competition to Tesco Company
The concept of time-based competition can effectively be implemented in Tesco by
identifying the seven process strategies including the process of system simplification,
system integration, standardisation, variance control, parallel activities, excess resources
and automation (Inman, 2019). By identifying these strategies, the organisations can
develop a link between the lead-time reduction and strategies needed to achieve these
goals.
The Tesco can implement time-based competition in 10 steps as follows:
1. Thoroughly performing a process analysis for understanding current business
operations
2. Developing measurement system by emphasising on time
3. Using different methods such as concurrent engineering and cross-functional teams
to amplify the speed of introduction time of new products
4. Evaluating all the alternative managerial decisions in terms of time (Inman, 2019)
5. Embracing changes and developing change-oriented management methods and
practices
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6. Understanding the critical importance of the support of top management for
sustaining changes
7. Consider issues such as downtime, bottleneck and other problems as learning
opportunities
8. Discover ways to incorporate the results of time reduction into the reward structure
for employees
9. Provide proper information to the employees to give them a better understanding of
their contribution to the time compression in the company (Inman, 2019)
10. Keep balance in improvements with work disruptions in order to make customers
happy
Delivery of products/services in Tesco using Time-based competition concepts
Tesco is a multinational retailer that sales a wide range of products including food,
electronics, clothing and financial services. The company offers more than 40,000 product
line and grocery delivery services through its retail stores. The management of such a wide
range of products and services is very critical and there is a great chance of loss and wastage
during the accumulation, distribution and delivery of its products and services. Thus, the
TBC concept can efficiently be used along with the application of Just in time to compress
the time required for performing all the activities of the product delivery cycle (Antai, 2011).
The use of TBC can support Tesco in delivering quality products at right time and support
minimizing the cost.
Organisations like Tesco could seek to streamline the system and processes by
implementing time-based competition within the company. The company can also use the
team building technique to reduce time by focusing on integrating different components of
the supply chain. Enormous time and expenses could cut off by bringing people together
from different areas like product engineering, marketing, manufacturing and purchasing
right through the development process and by providing them with the authority to take
decisions (Godinho Filho and Saes, 2013). This process also facilitates the standardization of
work and makes it easier and less costly.
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Industrial and other environmental constraints influencing the time-based approach at
Tesco
The industrial and other environmental constraints that may influence time-based
competition at Tesco can effectively be identified through the application of PESTLE analysis:
 Political: the TBC can influence by the global political factors such as tax rates,
legislation and stability of the operating country. The current financial instability in
the world may affect the company (Rahman, 2016).
 Economic: the economic factors involve leverage cost, prices, demand and supply of
products. The company should also need to be aware of economic changes such as
the change in taxation that could affect the financial accessibility of the company.
 Social: the changes in customer perception and habits could influence the TBC for
the products delivery in Tesco.
 Technological: the technological advancements have a great influence as the
customer are become more technology friendly and performs most of their activities
with the use of technologies like the internet (Rahman, 2016).
 Legal: government regulations and policies also directly influence the
implementation of TBC in Tesco.
 Environmental: the global companies like Tesco are increasingly pressurised to
address environmental issues and thus, the company has to consider environmental
factors while applying TBC.
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CRITICAL EVALUATION
In today’s business environment, time is recognised as the major dimension of
competitiveness. Tesco should implement Time-based competition in its product delivery
cycle to speed up the distribution and transportation of its products in less time and cost.
The company offers the home delivery services to its customers and uses technology to get
customer orders and thus, proper management of time is very essential to minimize the
wastage of time and resources and maximize the company’s profitability. At present, the
retail industry in the UK is highly competitive and the competitors are continuously
researching new ways to increase their market share. Tesco needs to move forward with
enhancing its product delivery system with the use of technology and time-based
competition. The company can effectively apply TBC in its current product delivery system
and achieve competitive advantage in the retail industry across the UK and world.
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REFERENCES
1. Antai, I., 2011. Supply chain vs supply chain competition: a niche-based approach.
Management Research Review, 34(10), pp.1107-1124.
2. Bansal, P. and DesJardine, M.R., 2014. Business sustainability: It is about time.
Strategic Organization, 12(1), pp.70-78.
3. Blackburn, J., 2012. Valuing time in supply chains: Establishing limits of time-based
competition. Journal of Operations Management, 30(5), pp.396-405.
4. BLACKBURN, J.D., 2012. The value of time (and the value of waste): time-based
supply chain design. Pannon Management Review, 1(1), pp.49-65.
5. Demartini, C. and Mella, P., 2011. Time competition. The new strategic frontier.
IBusiness, 3(2), pp.136-146.
6. Demeter, K., 2013. Time-based competition—the aspect of partner proximity.
Decision Support Systems, 54(4), pp.1533-1540.
7. Dempsey, P., Heard, E. and Sammut-Bonnici, T., 2014. CONCEPTUAL OVERVIEW.
8. Dempsey, P., Heard, E. and Sammut Bonnici, T., 2015. Time Based Competition.‐ ‐
Wiley Encyclopedia of Management, pp.1-2.
9. Godinho Filho, M. and Saes, E.V., 2013. From time-based competition (TBC) to quick
response manufacturing (QRM): the evolution of research aimed at lead time
reduction. The International Journal of Advanced Manufacturing Technology, 64(5-
8), pp.1177-1191.
10. Hemmatfar, M., Salehi, M. and Bayat, M., 2010. Competitive advantages and
strategic information systems. International Journal of Business and Management,
5(7), p.158.
11. Inman, A., 2019. TIME-BASED COMPETITION. Online available at
https://www.referenceforbusiness.com/management/Str-Ti/Time-Based-
Competition.html last accessed on 30th January 2019.
12. Lesser, R., Reeves, M., and Goulet, K., 2013. BCG Classics Revisited: Time-Based
Competition. Online available at https://www.bcg.com/publications/2013/bcg-
classics-revisited-time-based-competition.aspx last accessed on 30th January 2019.
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