Tesco's Supply Chain Management Practices
| Case Code: OPER054 Case Length: 19 Pages Period: 2000-2005 Pub Date: 2006 Teaching Note: Not Available |
Price: Rs.400 Organization : Tesco Industry :Retail Countries : UK Themes: Supply Chain Management |
Abstract Case Intro 1 Case Intro 2 Excerpts
Introduction
In December 2005, AMR Research (AMR) announced the 'Second Annual Supply Chain Top 25' - a list of leading companies that had employed demand driven supply chain practices and technologies successfully. UK based retailing giant Tesco was ranked 9th in the list, preceded by Dell, P&G, IBM, Nokia, Toyota Motors, Johnson & Johnson, Samsung Electronics and Wal-Mart.
AMR's report ranked the companies based on past performance and future potential on the basis of their supply chain management (SCM) capabilities. The return on assets and inventory turns were given weightage of 25% each and 10% was for growth in sales in the previous 12 months.
The remaining weightage of 40% was given to the opinion of AMR Research, based on a structured voting methodology across AMR's team of analysts. Commenting on Tesco's achievements, analysts at AMR commented, "The UK based grocer was the first to really succeed with direct to consumer sales, while maintaining killer inventory turns and growth."...
Tesco is renowned for its best practices in SCM, which included lean management and using RFID technology. The company has gained and maintained advantage over its competitors by incorporating innovations in its supply chain like point of sale data, continuous replenishment system triggered by customer demand, primary distribution, cross dock Distribution Centers and use of a single vehicle to serve several stores. In 2001, the Sigma Project commended Tesco's SCM efforts, "Only in the most integrated supply chain organizations, such as Dell Computer, Wal-Mart, Tesco and Volkswagen, does SCM appear to mean the integrated management of materials, information and financial flows from raw material extraction to end-user."...
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