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Logistics And Operations Management : TESCO

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Question: Describe about the purpose of the report is to analyze the logistic and operations management of TESCO?     Answer: Introduction: The main purpose of the report is to analyze the logistic and operations management of TESCO, UK’s largest retailer of Central Europe. As it is known that TESCO started its operations initially with the supply chain operations and with moderate change it becomes successful in supply chain. After starting its operations in international market there were many problems faced by the company but it constantly maintained its universal brand image. To keep its delivery system consistent in the globe some necessary changes were made in the service operations like its international logistics, international warehouse management etc. Changes were made according to the cultural and legal laws of the across countries. Advanced IT systems are used and this has given an advantage to TESCO over their competitors. New satellite sensing and radio frequency identification (RFID) systems are being developed so that they can easily track their goods both internationally and nationally and also upgrading the usage of warehouse management systems. Component activities of Tesco: Core activities of TESCO are to reflect that at what rate the society is changing in the recent years.   The main purpose is not only about profit but it is beyond that. It has a sense that big companies should also contribute in tackling big challenges (Lowe and Wrigley, 2009). In today’s world the culture has changed from ‘more is better’ to ‘making what matters better’. The change in society has also marked a change in this company. According to TESCO their main motive is not to solve everyone’s problem but to inspire, earn trust and to earn loyalty and to do the right things for their shareholders. TESCO’s new core purpose is “We make what matters better, together” (Anwar and Hasnu, 2013).  TESCO treat their employee’s like- By working as a team Trusting and respecting each other. Showing courtesy to their consumers. Listening and supporting each and every consumer. Sharing knowledge with each other. TESCO has three big ambitions which will reflect to the society are- To lead in reducing wastage of food globally. Improving health conditions and tackling the crisis of global obesity. Creating new opportunities for the young people of the whole world. In the beginning, the principle of TESCO was "Pile it High, Sell it Cheap”. This idea was inspired from the retail format of USA where procurement is done in huge quantity and the cost of those products costs low and this brings better realization of profit for the organization (Woods, 2007).The changes in the macro environment and the increase in competition with the other retail stores and this bring the profit margin low and spoil the brand image. Later under Maclauritn, successor of Cohen, it was decided to bring rudimentary, dramatic and comprehensive changes in the operation of the business and also re- engineering was done to build focus on the successful and methodical supply chain to assist to the new usage of technology (Barnes, 2011). Thus, it can be said that following are the component activities of TESCO related to its core activities: Inbound logistics; Operations; Outbound logistics; and Marketing and sales;   Evaluation of performance objectives: Inbound Logistics of TESCO posses the first opportunity in creating value (Hassan and Parvez, 2013). According to the inbound logistics of TESCO, this is the primary distribution and these activities include receiving goods from the suppliers at the warehouse, distribution and internal handling of the stores and lastly placing the goods on the shelves for display (Jacoby, 2012). At every point measures on quality control is ensured so that the customers get true worth of their money no unnecessary costs is attached with them (Sanchez‐Rodrigues, 2010). Operations procedure is one of the critical and important areas of TESCO where the work is functioned in a smooth way. Mainly the task involves the daily record of the management, display on shelves and the stock management to safeguard the competitive advantages (Fernie and Sparks, 2009).  Outbound Logistics involves in delivering products to the customers. TESCO offers benefits to the customers by giving them home delivery. Efforts are also made in improving parking facilities, trolley space and other tangibles to make the customers feel good (Weele, 2010). TESCO has successfully engaged their loyal customers through the club card initiative and also attracting new customers by doing advertisements through newspapers, radio and TV. TESCO has started CSR activities and presenting them as a responsible company in the customer’s eyes (Jin and Yang, 2011). Internal and external factors influencing the Organisation performance objectives TESCO follows the intermodal transport policy and uses rail, road and canal for transportation of national distribution of goods. It maintains a model where a central warehouse is maintained and through them goods is sent to the local stores. In case there is a fault in the inventory then the warehouse is informed and then the stocks are dispatched (Tao, 2013). In case of international operations, there should be standardization for their suppliers at an international level. A hub can be implemented. For cheaper rate in transportation the warehouses should be located near the sea shore. Depending on the labor and commercial laws the choice of the docks should be done. After seeing the final location of all the stores then a central warehouse can be maintained. An extended hub can be maintained as the goods are transferred from docks to the central warehouse then finally to the stores.   Performance objective 1: Speed One of the vital goals of TESCO PLC is its performance in its operation. The main aim of Tesco Plc is to give their consumer, the highest level of satisfaction. The speed of Tesco Plc in its operation is the time taken by the company to deliver the product to its customer after getting the request of any product from their customer. This causes a good relationship between the customer and the Retailer Company and force the consumer to trade more from the retailer company. In the recent years TESCO is operating both the local and worldwide sources. There is a continuous change in the operation and distribution strategy and it can be divided into four major phases. 1. In the initial years there was the system of direct delivery to the stores from the suppliers. 2. Then it got changed into centralized system in late 1970’s.3. In late 1980’s there was the strategy changed into composite distribution.4. In late 1990’s, in the supply chain there was a vertical collaboration (Palmer, 2004).  Under the vertical collaboration strategy the emphasis was to streamline the processes of supply chain with the technologies and sharing information through the supply chain to build a successful and methodical supply chain(Hicks, 2010).In 1997, the sharing of information’s with the suppliers was started and later data securing and exchanging was also done through internet and also to supply the information’s to the suppliers on current inventory matters is done easily(Fleming and Konstantaras, 2014). Performance objective 2: Quality Tesco Plc is always concern with the quality of the product. If the quality of product satisfies the customer then the customer will trade more from the retailer company. This will help the retailer company to earn more profit and will help them to have a good relationship between the retailer shop and the customer of the retailer shop. With the aims of maintaining the quality aspect, in 1999, Continuous Replenishment was introduced for the first time and the batch data processing was replaced by CR and then numerous orders are sent to suppliers and therefore reducing the stock for better control of the inventory (Lin, Luo and Tang, 2014). As per the suppliers requirements the products are sent to them through central batch processing unit and the same thing is done by the suppliers that they arrange their orders according to batch orders and are sent them at the TESCO warehouse(Priem and Swink, 2012). Performance objective 3: Flexibility Flexibility is one of the important performance goals of Tesco Plc. If a company has flexibility in its operations then the retailer shop will have a good relationship between the consumers of Tesco Plc and the Tesco Plc Company. This factor will attract more consumers towards them and the retailer shop will earn more profit from the business. The flexibility of a company shows the internal issues of the shop. If the shop is flexible enough then the company will have more efficient in overall performance of the retailer shop. In UK retail market TESCO holds an authoritative position with 13% share. Their focus is now to grow the food share and also increase their hypermarkets space contribution (Anyesha, Hassan and Aboki, 2014).TESCO is standing at the optimum level of supply chain management and its logistic operations it has created a standard for the customers (Cohen, 2011).Stocks are checked on everyday basis and based on the records orders are centrally processed. Schedules on production plans are made and the same is transported from warehouse to the department store after getting the nod from the warehouse in charge (Rodrigue, 2012).   Performance objective 4: Cost Another goal of Tesco Plc in their performance is cost. The Tesco Plc Company has a good flexibility, speed and quality in their business performance then the retailer shop can increase their product cost and the consumer of Tesco Plc will be ready to pay the hike price to the retailer shop. To make quality of the product better, the retailer shop will require financing more in their business. Performance objective 5: Dependability The phrase dependability means the capability of the retailer shop to serve a better quality product and the delivery time should be the same by the retailer shop. This process will reflect the dependability factor of the retailer shop. The dependability factor will help the Tesco Plc to generate more revenues for Tesco Plc. With the help of dependability factor, the manager of the Tesco Plc can find out the measurement of the performance of the Tesco Plc. By 2003, TESCO has successfully started functioning in countries like Thailand, Ireland, Hungary, South Korea, Poland etc. Working in overseas was a difficult task for TESCO but as they managed their supply chain in UK like that only they sta

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