Contents Introduction Overview of Tesco Operations Management Tesco's

Operations Management Location Flexibility Total Quality Management (TQM)

Capacity Efficient Supply Chain Conclusion Reference Table of Contents

Page No. 02 02 02 04 04 04 06 06 08 09 10

Introduction This assignment is to discuss an organizations operations

management strategy. Operations management concentrates on improving the
activities, which is necessary to be aggregated with the possible options of
markets to develop the performance of the concern. It is very important to gain
the increased amount of activities to which adds value to organization by
applying the established standard operational practice of the concern. For the
purpose of this assignment I have analyzed the operations management strategy
of Tesco PLC, one of the biggest and successful retailers in UK. Focusing on the
methodological definition of the operations management, this study specially
focuses on Tesco's supply chain management practice, which can be phrased as
one of the main reasons that have supported Tesco to become the market leader.
Overview of Tesco Tesco PLC is the leading grocery store in UK. It is running with
2318 store and has 326000 workers or employees. It has unique cost advantage
and strategic advantage over its competitors such as Sainsbury, Asda, kwicksave
etc. It is offering several online services via Tesco.com which is a subsidiary of it.
It is carrying out its business in UK with four titles like Superstore, Express, Metro
and Extra and it is covering the biggest market share in UK. It is now offering
near about 40000 items of foods along with wearing items and other items of
non food products. The companys founder is Jack Cohen. In the last of London
there were used to be surplus of groceries and the company was founded to sell
those. Its founder attached the forces of T E Stochwel and named it as Tesco. The
first store of Tesco launched in 1929. Operations Management Operations
Management can be defined as a process where the various resources of the
concern are moved through a pre-established process or system and mixed and
converted by means of a controlled mechanism to deliver value or benefits to the
organization as per the policies and guidelines set by the management. The main
viewpoint of the operations management is to satisfy the customers demands
by utilizing the minimum resources of the organization. Operations management
concentrates on improving the activities, which is necessary to be aggregated
with the possible options of markets to develop the performance of the concern.
It is very important to gain the increased amount of activities to which adds
value to the organization

by applying the established standard operational practice of the concern.

According the operations management experts (Leong et al, 1990) normally the
decision making sector of a concern can be classified of ten types, though there
is a number of a classification in practice. These ten types can be arranged under
two main headings. Such as structure (the physical aspects of operations which
can be defined as the hardware) and infrastructure (the work force and the
mechanism of the operations which can be defined as the software) Structural
decision are includesFacilities: facilities include the location, size and focus of
operation resources. Where the production facilities should be located, the size of
the facility, goods and services should be produced at the each location, and to
what market each facility should serve these decisions are taken in this category.
Capacity: It is the capacity of the operations and ability of the operations to
respond to changes in customer demand. The use of the facilities depends on the
capacity of the operations. Decisions related to the capacity influence the ability
of the organization to serve particular markets of the particular locations. Process
technology: Decisions related to the process technology are what type
technology of the equipment will be used in the operation process such as the
level of automation used and the configuration of the equipment. Supply
network: In what extent operations are to be conducted in-house and in what
extent operations are to be outsourced. Who will be the suppliers, the location of
the suppliers, dependency on the particular suppliers these decisions are taken
here. Infrastructure decision areas includePlanning and control: Planning and
control what systems will be used for planning and controlling operations. Work
Organization: Structure of the organization, operation managers responsibilities
and accountabilities in the operations. Human Resources: Employee recruitment
system, training facilities, style of the management. Development of new
product: It includes the method and procedures necessary to develop new
products and services. Performance Measurement: It includes the measurement
of financial and non-financial performance and having reward systems to the
good performer.

Therefore, from the view of the above clarification focusing operations

management; it is very apparent that different aspects of operations
management that have been adopted by Tesco to frame up their probable
competitive perimeter, to give priority in the study of Tescos operations
management. At once, they shut down their small stores but behind that there
was an intention of huge investment in converting the small stores in modern
superstores. Tesco's Operations Management Location Tesco had dealt with
different market segments by means of various formats of stores at the suitable
and right places to grow their business. Their survivals conclude the smaller
compact

(like nearest super shops or markets), Tesco Metro (like city center shops), Tesco
Express (petrol forecourt), Tesco VIN and Drinks Super shops and Tesco Extra
(hypermarkets) (Tesco, 2007). Tesco was the pioneer in establishing superstores
at place out of town but that was very successful at the end. It then took the
benefits of cheaper land cost and cheaper supply expenses and that is why they
were able to offer the cheaper and suitable or convenient price of goods or
products for the customers. Flexibility From the strategic point of view, flexibility
includes two dimensions mainly, in respect of the number of the company are
competing. But both of the dimensions are directly related with the fact that how
the firms processing are planned. One part of the flexibility can be expressed as
the firms capability of offering a wide range of products to customers. Abreast
with the dimension, the utmost flexibility is attained at that time when each
product is modified to satisfy the demands or particular requirements of a single
customer. This process is generally defined as mass Customization. Flexibility is
the term can be defined as the capability to adjust with the outer diversification,
which may be needed by several aspects of the product. In regards to this
flexibility may be attained in many ways. These adjustments are made from the
competitor companys technical progress. Flexibility can also be justified on how
many types of goods or services are offered. It the fact, which influences to
deliver a new product-keeping pace with the modern customers, demands.

Operational steps like entering into non-food items, new format or system and
internet based shopping facilities offers Tesco to implement it up gradation
techniques in some other aspects and that was resulted in great success and any
particular activity or action cannot be the justified as the main cause of Tescos
success. As revealed from Mitchell (2004) it was a gradual process, rolling wheel
of success that were added increased content of value to Tesco. Tesco at first
started to expand its product range or variety into non-food products instead of
having their Home and Wear products. However, at end or late of 1980s they
dropped their nonfood product line to give concentrate on the diversification of
their fresh food items. However, when they faced crises of loosing margins on
fresh food items then in 1994, they again started to introduce their non-food
items. Only in the first half of 1997, they introduced about 7000 non-food items.
In addition, gradually by late 1998 their non-food items were being sold through
their 50 superstores. This step increased their sale by 20% in some of their
superstores. Tesco (2007) revealed that their market share increased by 5%
where 16% of that was in the sale of Chart music. Tesco had believes on
excellent facilities and the recognized it as a critical success factor of their
business. They arranged their goods and products in some types according to
the quality, service, price and the regular change of customers tests,
expectation, ethical issues and their behavior (Tesco, 2007). They got some
competitive advantage from their regular promotional activities at several places
at different times. This always added some value to the concern. Especially
promotional activities like 'the price is dropping on your weekly shopping', 'New
Deal', 'Unbeatable offer, Value Line products and 'Low price' helped to add
value in Tescos and to observe the competitive price and operational steps of

the others (Tesco, 2007). Total Quality Management (TQM) The process that
embraces a quality conscious philosophy or culture within the organization is
called Total Quality Management (TQM). It aims towards standards of near
perfection and continuous improvement. Total Quality Management (TQM)
ensures-

Philosophy of get it right first time; Continuous improvement (aim towards zero
defects, idle time, wastage); Quality assurance procedures and systems; Culture
of quality is everyones concern; Encouraged teamwork. By means of delivering
the goods and products from a centrally managed distribution system through
direct delivery, they improved their operational standard and quality also.
Ultimately, their warehouse strategy improved the competency of their delivery
system. Especially the JIT concept adopted by them and because of that they
were able to start superstores that are more new and it renovate the total
distribution system with a larger push sale. Capacity To establish an effective
operational planning certain fundamental capabilities should be indentified and it
is equal for all the types concern like manufacturing concern, service oriented
organizations. These core capabilities enable a concern to set out their
competitive policies in the market. Therefore, the core capabilities can be
clarified as a set of abilities and competence that is improved by the operational
management continuously and enables them to focus them an especial one in
the marketplace. Therefore, the core capabilities are to be indentified in other
areas of operation too and all these have to amalgamate to achieve the overall
goals of the organizations.

Tesco attached their suppliers by providing information and making plan

combined in selection and assessment of promotion performance. So by their by
policy of vendor management they got help from them in renovation, pricing and
promotion. In addition, this especial types of promotional functions improved the
sale of their particular items and gradually they conceived advises of vendor to
promote the sales at a particular situation. In addition, Tesco started their online
or internet based shopping which was widely accepted by the customers and
they were very first in introducing internet based retail business. There was a
very important policy to convert the store into warehouse. However, others were
killing their money and time behind warehouse. This out of store policy gave
them great profitability (Tesco, 2007) However, the following can be discussed as
Tesco's main strategic decisions in the area of operations management.

Efficient Supply Chain In addition, Tesco had a profound and efficient Supply
Chain Management System. Therefore, after the renovation of their supply chain
they got huge facilities in relation to their competitors. The Supply Chain
Management approach of Tesco includes some core facts like RFID, lean
management, data sustaining replacement format stimulated by consumer
requirement, delivery centers, direct distribution, utilization of minimum vehicles
to touch optimum stores and places of sales. Furthermore, process reengineering
gave a huge facility in Supply Chain System. In addition, they protected and
controlled it by means of producing consumer value. Sales places, auto
warehouse, central ordering and delivery and electronic information transfer
were their prime Supply Chain ingenuity. Even they had an effective and efficient
structure which helped a lot them in managing the supply chain. So in other
words, they applied the perfect strategy in choosing operations management at
the perfect time. This helped them to be strong and stable against consumers.
By the way, the following are the prime steps that have been adopted by Tesco
to survive them in the competitive business.

Conclusion Consequently, through a very effective and profound approach of

Supply Chain Management decisions and steps, which is regarded as very
important tools of operations management, Tesco make the way by them to
attain improved facilities in competitive business world. The steps of Supply
chain to improve or develop the value of consumers and to acquire their
devotion Tescos operations management strategy framed in a way that was so
effective to them strong and revealed them with some facilities and
opportunities to develop their total performance. Devoted promise or
commitment, more customer orientation took them in leading place in the
market place. After all, of their positive efforts and mentality to focus on the
quality and customer satisfaction made their operations management so smooth.

Reference 1.
Boyer, KK and Hult, GTM (2005, September) Extending the supply chain:
Integrating operations and marketing in the online grocery industry, Journal of
Operations Management, 23: 6, 642-661 2. Fernie, J and McKinnon, AC 2003, 'The
Grocery Supply Chain in the UK: Improving Efficiency in the Logistics Network',
International Review of Retail, Distribution and Consumer Research, 13: 2, 161174 3. Hitt, MA, Ireland, RD, and Hoskisson, RE (2003) Strategic Management:
Competitiveness and Globalization, 5th ed., South-Western, Singapore 4. Hogan,
K (1998): Tesco Tycoon, Interview with Tesco's fortunes Chairman Ian MacLaurin,
Marketing; Haymarket Publishing Services 5. Joseph, G. Monks (2004), Theory
and Problems of Operations Management, 2nd Edition, Tata McGraw-Hill
Publishing Company Limited 6. Leong, G.K., Snyder, D.L. and Ward, P.T. (1990)
Research in the Process and Content of

7. 8. 9. 10. 11. 12. 13. 14. 15.

Manufacturing Strategy, Omega 18(2):109122. Ruffian, F et al (2000):

Organization Design in Operations Management; International Journal of
Operations and Production Management. Slack, N et al (2007): Operations
Management, 5th edition; Pearson Education Ltd. S.N. Chary (2004), Production
and Operation Management, 3rd Edition, Tata McGraw-Hill Publishing Company
Limited. Tesco (2007): Our History. www.tescocorporate.co Tesco plc. Accessed
on; 18/06/12 Tesco (2007): Business Case 2000;
http://www.business2000.ie/cases/cases/case423.htm#intr Accessed on;
18/06/12 Tesco (2007): Tesco's achievement s since 1997,
http://w.tesco.ie/corporate_info/firstfouryears.ht Accessed on; 18/06/12
Thompson, AA & Strickland, AJ (2003) Strategic Management: Concepts and
Cases, International Edition, McGraw-Hill, New York Weiss, H. J., & Mark E. G
(1989): Production and Operations Management; Allyn and Bacon, Whittington, R
(2001) What is strategy and does it matter?, 2nd Ed., Thomson Learning,
London