Introduction
The Tesco Company is a United Kingdom-based retail business that has since expanded internationally, operating in a variety of countries. Established in 1947 as a public corporation, the company provides groceries, food products, and other consumer goods. In 2001, the company launched its clothing range, Florence and Fred, as a subsidiary of Tesco. In its retail business, Tesco caters to a wide range of customers and provides products for both day-to-day and long-term occasional use. This report seeks to assess essay rewriter Leeds & Tesco’s operations management and draw a conclusion on the company’s future outlook. It will focus on the key tools and strategies employed by Tesco to meet its operations management objective.
Managing Operations in Tesco
The core objective of Tesco’s marketing strategy is to optimise the components of its marketing mix in order to generate competitive advantages and to influence sales. The supermarket chain provides a broad selection of products and has been in this position for the past few years (Ivanov et al. 2021). Current products offered in Tesco’s stores include food, clothing and financial services, as well as electronics and furniture, as well as home décor. The pricing for commodities varies; however, the overall prices are kept consistent with market prices for the relevant commodities. The company strives to maximize profits and organizes marketing campaigns to correspond to the shopping season. Additionally, it enhances or re-brands well-known products to increase sales. The company also carries out traditional marketing campaigns, including advertisements and sponsorship of events (Grover et al. 2022). Furthermore, it has been experimenting with point of sale placement, announcements, and gifting initiatives to increase sales. Additionally, dissertation writing service Luton and the company occasionally supports charitable causes in public and offers promotional offers to its card-holders.
The successful operation of a retail business necessitates the coordination, empowerment and management of personnel. Tesco employs a significant amount of front service personnel who interact with customers in their stores. To guarantee the quality of service, the company undertakes rigorous and regular recruitment procedures to draw in the most qualified applicants. Furthermore, the company invests in the education of its staff and provides competitive remuneration packages to maintain its workforce (Olsen and Tomlin, 2020). To assist its employees in accessing the company’s product offerings, the company has implemented the “Colleague Privilege Card” and “Buy as You Earn scheme”.
Tools and Techniques Operated by Tesco for Operation Management
In response to the increasing demand for online grocery shopping from its customers in the United Kingdom, Tesco has expanded its digital distribution network. The company has now established a new 120,000 square foot distribution centre in the city of Enfield, England, which enables Tesco to offer a dedicated inventory for online sales, without impacting its retail store sales (Benjaafar and Hu, 2020). Prior to this, Tesco’s staff had to visit the retail stores and select products rather than shipping them to customers. The inventory level is divided into distinct categories, which are in line with the packaging and shipping requirements, allowing personal shoppers employed by the company to collect grocery items and bakery items, which are then placed on conveyor belts for consolidation and dispatch. Additionally, Tesco employs an automated checkout system, which utilizes automated scanners and payment machines to enable customers to purchase goods without the need for assistance. This reduces the number of manual checkouts, allowing customers to shop during peak periods while still avoiding queuing (Babich and Hilary, 2020). As a service management business, Tesco must be able to manage capacity management tasks in an optimal manner in order to maintain a high degree of customer satisfaction.
As Tesco is able to afford to stock up, it is important to note that essay writing service Sheffield and stocking up ahead of the expected peak demand season can have a negative impact on the inventory processing efficiency of the company’s distribution centres. To address this, lean management principles have been implemented, which aim to eliminate unnecessary elements and reduce waste. As of 1999, the company has implemented a “continuous replenishment system” that is based on “Point-of-Sale data” (Iris and Lam, 2019). Additionally, Tesco operates cross-dock operations. “Collaborative planning”, “forecasting” and “replenishment” are key components of Tesco’s inventory management, and the company has established a partnership with “Dunnhumby”, which allows for the analysis of customer data and sophisticated analyses of supply chain data. Since the introduction of “RFID technology to Tesco’s supply chain in 2003”, the company has been able to achieve three operational management gains through its reliance on “RFID technology”. These gains include improved customer service, increased working efficiency, reduced labour demand, and improved job assignment accuracy and quality (Obrenovic et al. 2020). Additionally, the technology has enabled Tesco to increase the reliability of their supply chain, allowing them to predict with confidence when goods from suppliers will arrive at their stores and when they will leave.
Value Chain Analysis of Tesco
A process analysis of Tesco would focus on customer wait times, the acquisition and disposal of inventory, and the level of assistance provided by customer service personnel. It is evident that Tesco has a strong operational base due to the presence of a sufficient number of sales assistants, both online and in-store (Bag et al. 2020). Furthermore, the sales assistants are present on the shop floor at all times, responding to customer inquiries and filling in for cashiers and other personnel within the store. The Tesco brand is prominently displayed in the stores, staff uniforms, transport fleets, and online.
Figure 1: Value Chain
(Source: hbs.edu, 2023)
The design of the stores under Tesco is similar across the globe, but at the same time, some differences in orientation or size are present. The quality of packaging of the company’s branded in-store items are maintained in high and attractive manner. All Tesco stores offer adequate parking for customers, and a majority of its parking spaces feature dedicated areas for those with disabilities (Gunessee and Subramanian, 2020). Tesco’s core activities as a retailer are: “Inbound Logistics”, “Operations”, “Outbound Logistics”, “Marketing and Sales”, and “Services Offered to Customers”. Operations take up the majority of the core activities of this company, as it does not produce any goods. Tesco must maintain close collaboration with its suppliers.
Quality System Management
The objective of Tesco is to ensure that its brand products meet the highest standards of quality, both in terms of company policy and legal requirements. The company operates a “Tesco FMS (Food Manufacturing Standard) policy” that outlines its approach to suppliers and their compliance with the company’s requirements (Alzoubi and Yanamandra, 2020). The technologies employed at Tesco enable the company to align staff demand with actual staffing requirements, enabling the company to measure the performance of an individual store against its expectations. By optimising store design, responding to staff demand and offering customers self-pay options, Tesco increases staff output, reduces sales representatives’ idle time and significantly reduces administration schedules.
Operation Process Strategy of Tesco
The core of Tesco’s business model is retail, with the objective of providing products to the greatest number of customers. Tesco adopts a shared platform to foster innovation. To achieve this, they use a single format for a unified range of products, such as the concept of Fresh & Easy and branded stores. For instance, fresh and Easy is only applicable to food and groceries, while Fresh & Easy shoppers expect to receive all food and groceries at any store. This same strategy is applied to larger stores, with each category being under a separate department within the store, allowing for the integration of multiple categories of goods into stores and the simultaneous running of multiple promotions (Nakano and Lau, 2020). The model then expands to encompass other operations, including transport planning and automated ordering, as well as the use of club cards and the development of innovative display capabilities within stores.
The core strategy of Tesco has consisted of combining product availability techniques with customer focus orientation, with the aim of having ‘order-winners’. By increasing the use of tracking technology for goods and improving the analytical capabilities of the company’s analytical team, Tesco is able to concentrate on individual customers and group customers, providing them with services that are tailored to meet their specific needs (Ren et al. 2021). The pricing strategy, which allows Tesco to remain competitive against bargain shoppers and other price-sensitive customers, complements the loyalty card strategy, which enables customers to subscribe to an information collection platform managed by Tesco to receive rewards and improve their shopping experience.
Conclusion
The success of operations of Tesco can be signified to its unwavering commitment to innovation in the areas of inventory management, customer service in the store, and the right treatment of staff considering their job abilities, physical condition, and position across the company. Tesco, being a retail giant, does not face any kinds of operational challenges typically encountered across the operational industry; hence, it had to improvise the implementation of the “just-in-time inventory management system”. Tesco relies heavily on technologies for facilitating the customers, transportation, track goods and improve the overall performance of its employees. The combination of technologies and the work planning process enable Tesco to distinguish itself from its competitors and generate higher revenues, despite the “low cost value proposition” offered to its customers.
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