Tesco is one of the most important grocery and general merchandising retail chains in the world, and the largest British retailer. It was founded in 1919 by Jack Cohen in East London. The company had a turnover of 59.4 billion for 2009. During the three last decades, the group has increased its influence and improved its services, and the company has overtaken Sainsbury.
In this report we will explain the different changes that have taken place within Tesco's supply chain system. To improve its performance and service level as well as the whole operation system.
In the first pat, we will explain Tesco's stock replenishment policy and see why it has been necessary to correct it and adopt a SRS triggered by customers. We will then introduce the requirements needed to efficiently run store replenishment. In the third part, we will define the lean management and compare the new Tesco principles with the definition given. In the last part, we will discuss the rationale behind the Distribution network that Tesco operates within the U. K.
[...] They are licensed to choose locations for sourcing negotiated prices, and operate quality controls. Each Store is directly connected to the DCs and the DCs are linked to suppliers. This kind of network permits Tesco to apply their new replenishment and just-in-time strategy to get the goods on a rapid basis. Once again as shown in the third part, there was a lot of waste within Tesco's supply chain operations, and this kind of network permits us to apply the new policy and make cost savings. [...]
[...] This entire information and logistics requirement, allows Tesco to have an efficient and effective replenishment system, in accordance with a new supply chain management that we are now going to speak about. Lean Production and Just in Time Lean Production or Just-in-Time definition Lean production, also called just-in-time, is an organizational method to manage the supply chain in order to minimize costs linked to inventory and manufacturing. This method consists in reducing to a minimum, the time that goods spend to go through each step of the supply chain, or their manufacturing process from the raw material, to the delivery. [...]
[...] Graham Booth, Tesco's supply chain Director from 1985 to 2002, thought about the necessity of having a stock replenishment triggered by customers. Continuous replenishment system triggered by the customers This kind of replenishment system permits the store to immediately replace the product bought by the customer. This system involves the introduction of multiple replenishments. It can permit the store to avoid getting sold out. Indeed, as the data of the sale is transmitted directly from the point of sale to its allocated DC, it is now possible to make sure that the truck leaving "every few hours" is carrying the items that are going to run out of stock. [...]
[...] It is about squeezing out waste every step of the way." We can say that there are seven kind of muda within a supply chain that the lean production tries to correct on the whole process. - The first waste is linked to transportation: because of the goods moving through the chain without any usefulness in performing the processing. - The second waste is linked to motion: because the resources necessary to perform the processing are moving or walking more than required. [...]
[...] We may nevertheless ask the following question : As all its rivals (Sainsbury's, ASDA . ) know how Tesco is operating, wouldn't be possible to be the witness of an unexpected reversal, and see Sainsbury's overtaken Tesco, and get back its rank as the leader within the U. K. ? References - Donal Waters. (2003). Controlling material flow. In: Logistics an introduction to supply chain management. Houndmills: Palgrave Macmillan. 166-173. - Donal Waters. (2003). Measuring and improving performance. In: Logistics an introduction to supply chain management. [...]
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