Name

Class
Date
Institution
Executive Summary
This report has been written for analysing the service concept of Tesco and operations
management analysis of Tesco. The focus of this report is on service delivery of Tesco
through operations. The analysis has been done on the basis of secondary data. It has
been found that Tesco is highly successful in providing high quality customer service to
its customers by maintaining high standards of operations.
Table of Contents
Executive Summary..................................................................................................................... 2
1. Introduction.............................................................................................................................. 4
2. Service Concept of Tesco........................................................................................................4
3. Contribution of Operations of Tesco to Functioning of Service Concept...................................5
4. Implementation of Service Concept through Operations..........................................................7
5. Conclusion............................................................................................................................... 9
6. Recommendations for Improving Concept and Delivery System of Tesco...............................9
7.References............................................................................................................................. 10
8. Appendices............................................................................................................................. 11
Appendix A: Income Statement of Tesco for the year 2017.....................................................11
Appendix B: An example of interaction between customer and Tesco employee....................12
Appendix C: An example of bulk products availability at Tesco...............................................13
Appendix D: Use of RFID in Tesco.........................................................................................14
1. Introduction
Nowadays retailing service has become highly competitive. The core of retailing
service is the building and maintaining strong relationship with customers. This can
be achieved through high quality customer service operations (Christopher, 2016). In
retailing service industry, the attraction as well as retention of customers is
considered to be highly important. Retail service firms have to give more focus
towards providing best prices as well as good shopping experience to their
customers. A retail service firm can offer customer value to its customers with the
help of appropriate and effective service operations (Jacoby, 2014). This report is
about analysis of service concept of Tesco. Moreover, the report also includes
discussion about contribution of company’s operations to functioning of service
concept. In the end of this report, recommendations have been given about
improvement in service process of the firm.

2. Service Concept of Tesco

Tesco is a UK-based global supermarket chain that earned revenue of around
£55,917 million in 2017 (Appendix A). The first store of Tesco was opened in
Edgware, North London in 1929. Tesco is aimed at providing high quality retail
service to its customers. The service processes of Tesco can be referred to as front
office processes as well as back office processes that aim at providing personal
interaction through using technology like website of company. The employees in
Tesco retail stores are responsible for providing high quality service to the
customers, in order to make them satisfied and loyal with the firm. Employees of
Tesco focus on communicating effectively with their customers and fulfilling their
demands.
The customers of Tesco are also allowed to take part in service process. First of all,
customers of Tesco are capable of interacting directly with employees of Tesco
during shopping that is referred to as front-office process (Appendix B). In this case,
customer id aware of the service surroundings. Secondly, customers are capable of
indirectly participating through Tesco.com from their homes that is referred to as
back-office process. The management of Tesco focuses highly on making its
customers satisfied, through providing them high quality service (Slack et al, 2013).

Figure 1: Service Concept at Tesco

Source: (Slack et al, 2013)

3. Contribution of Operations of Tesco to Functioning of Service Concept

Due to the increased global competition, it is highly important for retail service firms
to focus on continuously developing capability of operations and meeting the
changeable requirements of customers, for outperforming their competitors. In order
to ensure high quality customer service, Tesco has given considerable importance to
the implementation of effective and ambitious operations management strategy. With
the help of this, the firm gets success in competing with other retail service firms
(Brown and Bessant, 2013).
The management of Tesco has implemented the customer-centric service concept in
all of its operations. In accordance with the customer-centric concept of Tesco, it
adopts low pricing strategy and also offers club card to its customers in order to
enhance customer loyalty (Smith et al, 2014). From the time of establishment of this
retail service firm, it has been competing on price. It works on an idea of selling wide
range of products at low prices. The firm keeps the prices low, in order to make
customers capable of buying in bulk (Appendix C). In order to provide high quality
service, Tesco focuses on improving employee efficiency and designing effective
system of delivery.
Tesco’s management gives much importance to its supply chain management in
order to ensure delivery of high quality customer service. In order to realise lower
cost against its competitors, an international sourcing team has been set up to pick
non-food items from all over the world. For the purpose of successfully cutting the
cost of non-foot items, Tesco procure from developing countries like India and China.
Moreover, it has also expanded the purchasing channel, so that high quality
products can be gained at low cost. This low pricing strategy through effective supply
chain management has made Tesco a successful firm offering retail service to its
customers (Walker et al, 2014).
Tesco is involved in conducting market research on frequent basis, so that it can
become capable of seeing new technology and adapting to them. The company
reaches out to all those customers who want to shop from Tesco with the help of
internet. Through online services, the company has created comfortable
environment for its customers, as the can buy their required products by paying
online. It has become much convenient for them to buy goods from their homes.
This has helped in increasing customers’ satisfaction as well loyalty level. Tesco
makes significant investment on internet, as they have deep understanding about
the positive impact of this investment on their profitability (Smith et al, 2014). In
addition to this, Tesco also uses market requirements perspectives in their
operations in an efficient way. Tesco’s management has clear understanding about
its target market and they are fulfilling changing needs of customers through
updating their products and services in accordance with expectations of customers
and to make them feel satisfied (Walker et al, 2015). Moreover, Tesco is capturing
huge market and has kept its layout too much attractive and it is formed in such a
way that customers can buy products easily. There are quality control departments in
Tesco for maintaining its service operations. In order to improve the customer
service, Tesco has introduced RFID technology (Appendix D). In RFID technology,
radio bar code is used for scanning and tracking product information throughout the
supply chain. Through introducing advanced technology, Tesco has got success in
achieving competitive advantages, from three perspectives; better customer service,
reliable supply chain system and high working efficiency (Brown et al, 2013). For
providing better service to its customers, the management of Tesco has focused
highly on developing and improving its IT system. Customers feel highly satisfied
after visiting Tesco retail store, as Tesco has high check-out speed and waiting time
is also very less. With the help of this, Tesco gets success in retaining customers
(Kraiselburd and Yadav, 2013).
New technology also caters to service concept of Tesco that focuses on benefit of
customers. Moreover, with the help of implementing RFID technology, employee
efficiency can be improved, as it has simplified processing of goods. It is easier for
staff members to search required product for customer and rather than searching,
they can spend much time to serve customers. RFID technology has also provided
benefit with respect to controlling whole supply chain (Walker et al, 2015).
In addition to this, for providing better customer service, Tesco has introduced cross
docking operation and has also applied collaborative plan, forecasting and
replenishment for supporting its inventory management. Through cross docking
approach, Tesco directly loads products of store in to the trailer rather than using
distribution center approach. With the help of cross docking approach, the Tesco’s
management and employees get success in skillfully avoiding the requirement of
storing and reducing the inventory holding. Moreover, the need pattern is also
analysed by Tesco with the help of CPFR system and the data is shared on the
internet. This system helps the firm in cutting the inventory cost, guaranteeing the
availability of product and benefits of forecasting the stocking holding.
With the help of all of these effective and efficient operations management practices,
Tesco has got success in maintaining high service quality and ultimately gaining high
satisfaction and loyalty of customers (Bromiley and Rau, 2016).
 Figure 2: Cross-Docking at Tesco
Source: (Wulfraat, 2014)

4. Implementation of Service Concept through Operations

Tesco’s delivery system and supply chain management system is highly effective
and far better than its competitors. In order to ensure high satisfaction level of
customers, Tesco has improved its delivery system by shifting to home delivery
service and through development of prime distribution process. As customers always
want to get high speed, low cost and high quality service, so for this purpose, Tesco
has focused highly on increasing the delivery speed and saving cost. There is a
primary distribution channel developed by Tesco and it uses its own fleet for
transporting local products from suppliers. With the help of prime distribution, Tesco
has got success in improving the use of trucks of Tesco and this has an ultimate
positive impact on efficiency of service delivery (Hitt et al, 2016). However, it has
been argued by that there is not much development in the primary distribution
process of Tesco and there is a need of bringing improvement in this operations
functions. Sometimes, it has to face issues due to lack of availability of trucks for
picking up products, while suppliers have prepared them completely. The quality of
service in Tesco is improved through the use of advanced technology and
introduction of lean management system. Recently, Tesco made major investment in
technology reform, when the focus of most retailers was on reduction of cost and
improvement of supply chain. This has helped the firm in improving the supply chain
and ultimately increasing the satisfaction level of customers through timely delivery
of products and services (Kato et al, 2015).

Figure 3: Supply Chain Analysis

Source: (Wulfraat, 2014)

Figure 4: Logistics and Warehousing

Source: (Rollason, 2018)
 Figure 5: Continuous Replenishment
Source: (Rollason, 2018)

5. Conclusion
In the end it is concluded that Tesco has got success and competitiveness through
focusing highly on improving its service delivery. As a service company, Tesco focuses
highly on improving its operations, for the purpose of improving customer service.
Tesco’s supply chain is highly effective and it uses RFID technology. Moreover, cross-
docking is also used in Tesco for the purpose of improving customer service.

6. Recommendations for Improving Concept and Delivery System of Tesco

Although Tesco has got much success in providing high quality customer service, but it
still needs to focus on improving its business operations. Tesco is required to
continuously invest in advanced technologies, in order to gain competitive advantage. In
order to further improve quality of customer service, it should not completely rely on
technology, but it should also give considerable importance to human capabilities.
Moreover, it should also focus on improving its supply chain and its online delivery
system. This will help the firm in attracting more customers and increasing satisfaction
and loyalty level of customers (Gunasekaran et al, 2014).

7.

7.References
Bromiley, P. and Rau, D., 2016. Operations management and the resource based view:
Another view. Journal of Operations Management, 41, pp.95-106.
Brown, S. and Bessant, J., 2013. Strategic operations management. Routledge.
Brown, S., Blackmon, K., Cousins, P. and Maylor, H., 2013. Operations management:
policy, practice and performance improvement. Routledge.
Christopher, M., 2016. Logistics & supply chain management. Pearson UK.
Gunasekaran, A., Irani, Z. and Papadopoulos, T., 2014. Modelling and analysis of
sustainable operations management: certain investigations for research and
applications. Journal of the Operational Research Society, 65(6), pp.806-823.
Hitt, M.A., Xu, K. and Carnes, C.M., 2016. Resource based theory in operations
management research. Journal of Operations Management, 41, pp.77-94.
Jacoby, D., 2014. Guide to supply chain management. Hachette UK.
Kato, T., Nakajima, T., Saito, T., Okitsu, J., Shiga, Y. and Miki, Y., Hitachi Ltd,
2015. Operations management methods and devices thereof in information-processing
systems. U.S. Patent 9,128,704.
Kraiselburd, S. and Yadav, P., 2013. Supply chains and global health: an imperative for
bringing operations management scholarship into action. Production and operations
management, 22(2), pp.377-381.
Rollason, H., 2018. How Tesco Leads The Way in Social Customer Service, [Online],
Available at: https://www.conversocial.com/blog/how-tesco-leads-the-way-in-social-
customer-service [Accessed on 30th Nov, 2018]

Slack, N., Brandon-Jones, A. and Johnston, R., 2013. Operations management.

Pearson.
Smith, L., Maull, R. and CL Ng, I., 2014. Servitization and operations management: a
service dominant-logic approach. International Journal of Operations & Production
Management, 34(2), pp.242-269.
Walker, P.H., Seuring, P.S., Sarkis, P.J. and Klassen, P.R., 2014. Sustainable operations
management: recent trends and future directions. International Journal of Operations &
Production Management, 34(5).
Walker, H., Chicksand, D., Radnor, Z. and Watson, G., 2015. Theoretical perspectives in
operations management: an analysis of the literature. International Journal of
Operations & Production Management, 35(8), pp.1182-1206.
Wulfraat, M., 2014. Case study: Tesco’s dot-com U.K. business model and lessons
learned, [Online], Available at: http://www.canadiangrocer.com/blog/e-grocery-test-
study-tesco%E2%80%99s-dot-com-u-k-business-model-and-lessons-learned-45135
[Accessed on 30th Nov, 2018]
 8. Appendices
Appendix A: Income Statement of Tesco for the year 2017
Appendix B: An example of interaction between customer and Tesco
employee
Appendix C: An example of bulk products availability at Tesco
Appendix D: Use of RFID in Tesco