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
Excerpts
Tesco's SCM Initiatives
Tesco's SCM relied heavily on the concept of 'Process Improvement' and was guided by its core purpose of creating value for customers so as to earn their lifetime loyalty. The key period for Tesco's supply chain initiatives was between 1983 and 1996; during this time, the company introduced several systems including point of sale scanning, centralized ordering, centralized distribution, automated warehouse control and electronic data interchange (EDI). Graham Booth (Booth) was Director, Supply Chain, Tesco between 1985 and 2002. He felt that it was necessary to have replenishment triggered by customers, for which, using the same set of suppliers along with cross dock distribution centers (DC) and vehicles supplying to all store formats would be ideal......
Managing the Supply Chain
As of 2005, Tesco had 2,365 stores across the world, 1,780 of which were in the UK operating on 24.2 million square feet of retail area. In the UK, Tesco operated primarily through four types of stores (Refer Exhibit III for Tesco's store format). The company's international operations were spread in 12 countries across the world. The sheer size of Tesco's operations called for high efficiency in supply chain. Even if the service level was at 99.9%, it still meant six million service failures.....
Looking Ahead
Looking Ahead
In the East European Markets, Tesco's logistics and supply chain were not well developed and relied heavily on deliveries from suppliers. This was a viable proportion for the large stores but not for the smaller ones.
As Tesco planned to expand smaller stores in Eastern Europe, developments in the supply chain became necessary. In Thailand and Korea automated DCs have been operational. For Tesco to gain an edge over other multinational retailers entering these markets, it was necessary to build viable supply chain solutions...
Exhibits
Exhibit I: Supply Chain Top 10
Exhibit II: Tesco before and after Lean Solution (Example of Cola)
Exhibit III: Tesco's Store Format
Exhibit IV: Tesco's Step Change Program
Exhibit V: Tesco's Distribution Centers (2003)
Exhibit VI: RFID Enabled Supply Chain
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