Operations Management in Tesco Plc

1. Introduction

Operation management and the business strategic planning is mandatory for running the organisation successfully in the market and the study aims to analyse the operation management and business case of Tesco Plc to analyse the strategic planning of the company. Tesco Plc. Is the largest retail chain in the UK in terms of revenue and it is the third largest retail firm in the world. The total market share of the company is 28.4% across the UK and the business of the organisation is classified into different categories such as “Tesco UK”, “Tesco Lotus”, “Tesco Poland”, “Tesco Malaysia”, “Tesco India”, “Tesco Slovakia” and many others. Apart from the retail products, the company also provides services to the customers such as financial services and personal loans. The company is efficient to deliver high quality products to the millions of customers across the UK and also globe where strong employee base is the strength of the organisation to serve the customers uniquely.

2. Discussion

2.1. Operation Management

In order to generate profitability, the multinational corporate firms focus on developing proper strategic planning to run their operations where the employees perform in different business units to maximise the organisational performance. Through marketing, managing sales, production and distribution, the companies try to generate revenue in long run and for example the retail firm like Tesco is efficient to strategise the operational activities of the firm, where the organisation focuses on inventory management to deliver high quality products to the customer at right place within effective period of time (Mangan and Lalwani, 2016). Through operation management, the firm can create high level of performance and improve efficiency in long run, where the process involves utilisation of resources and organisational capabilities to run the daily operations. The employees are the major stakeholders in running the organisational operations in long run. Operation management in this regard refers to utilising quality raw materials, implementing innovative technology and using organisational capabilities to produce the final output and in this regard the activities such as supply chain management as well as distribution network management, warehouse maintenance and product stock handling are effective to manage the day to day operations of the organisation (Heller, 2017) [Referred to Appendix 1]

2.2 Activities of operation management in the organisational context

Operation management is beneficial for the large organisations like Tesco and Wal-Mart to strategise their activities and run the business sustainably to meet the strategic objective of the companies.

Inventory management:

Inventory management is important to run the daily operations, where the implementation of ERP and cloud computing software are effective to manage inventory and warehouse of the company successfully. The computerised record further help the suppliers and distributors to mange product stock at the warehouse and physical store and distribute the product safely within proper time. Thus it is a better strategy for the retail organisations to manage their inventory and product stock and fulfil the requirements of the customers successfully.

The figure above indicates that the revenue generation of the company Wal-Mart is increasing over the years due to proper management of supply chain and distribution network, where the vendors and the suppliers are efficient to manage their inventory and meet the actual goal of the organisation in log run by delivering high quality products to each customers in the market within effective period of time.

Design of the product:

Preparing product layout is mandatory for the organisations to fulfil the customer’s needs and ion this regard for example, Wal-Mart and Tesco are efficient brands to design their product creatively and improve product portfolio which in turn helps the companies to maximise the customer’s satisfaction by delivering quality products according to the market trend and customer’s personal preferences (Ismail, 2017). For example, it is also seen that, there are major banks which has lost of total $210 million from the year 2011 and 2016 only because of poor execution of the tasks and ineffective process of operation management.

Du to such loss, the banking institutions aim at restricting their operation management process and start to develop customer centred process to satisfy the consumers at the market. Adopting agile methodology at the business as well as removing the fraud transactions is effective to retain the customers for long run which in turn help the banks to reduce the risk and improve efficacy of their operations (bain.com, 2020).

As per the figure above, risk percentage has fallen to 6.2% of gross income for 2011to 1.2% in 2016. Thus, it can be stated that, improvement in the operation management will provide the opportunity to the banking institution is to reduce the risk of their operations and satisfy the customers in long run (Jones and Comfort, 2020).

2.3 continuous improvement and lean principle

CIP method is effective for continuous improvement process, where the organisations aim to improving the process and technique to run their operational activities in the market efficiently. Improving the way of working process can be possible through identifying the internal problem san restructuring further strategy to mitigate the issues. "Plan-Do-Check-Act", "Root-cause analysis" is hereby efficient to manage the operational efficacy and improve the operations successfully in long run. Reviewing the existing operations and planning the innovation strategy to run the activities are also beneficial for the companies to manage their operations efficiently and fulfil the organisational objectives successfully.

There are five different principles of lean management which are,

Define value

Mapping value-stream

Creating flow

Establishing pull

Pursuit perfections

For creating the successful framework, this lean principle is mandatory to be followed at the workplace which in turn provides a scope to the companies to develop the accuracy of the work and introduce continuous-improvement culture [Referred to Appendix 2].

2.4 implementation of operation management

The operation management is essential for the organisations to operate in the market and all; the multinational corporate firms aim at restructuring their operations efficiently to maximise the organisational excellence. Tesco Plc is one of the famous retail supermarket chains in the market and the further analysis regarding the operational actvi8tiies of the company will be helpful to explore the operational strategic planning of Tesco where they adopt new technological innovation and creativity to run their operations excellently in the retail market across the UK and other international markets.

Utilisation of resources:

Proper utilization of the organisational resources and capabilities are the major strategy of Tesco where in October 2017, the organisation introduced new plan for running their operations through utilising their organisational infrastructure and resources. The products are prepared with quality raw materials and the strong supply chain further helps the company to run their operations. For continuous improvement and risk control mechanism, the company focuses on "RCA" or "Risk control analysis" to adopt new solutions to the business. The organisation focuses on managing food waste by serving the needy people and it has been examined that the organisation become successful to donate food to 19 million poor people (tescoplc.com, 2020).

“Continuous stock replenishment” strategy:

“Continuous stock replenishment” is effective to maintain the stock of the products and manage the raw materials for smooth pace of production and distribution. Tesco maintains stock efficiently through the technology of computerised system and focus computing, where the company aims at serving the customer instantly with high quality products and services and thus it further helps the organisation to fulfil the needs and preferences of the customers successfully. Sometimes, it becomes difficult for the organisation to manage the stocks over 3000 different stores due to climate change and lack of availability of the transportation. However, the company manages their operations efficiently and maintain the products stock successfully to serve the customers in a better way.

Six sigma strategy to reduce consumption of energy:

The six sigma strategy is useful to manage waste in different technique and the company is having high consumption from IT stops using mainstream serve. The six sigma strategy is effective to develop green policy to reduce the energy usage and improve the use of renewable resources to protect the natural resources. The company is efficient to utilise alternative resources and energy sources to run their operations and manage the products sites sustainably (Kantorowicz et al. 2018).

RFID technology to supply-chain management:

The strategy of RFID technology to supply-chain management is effective to utilise radio bar codes to track the products ad scan it successfully which in turn helps to manage the stock of the products and maintain supply chain successfully. It helps to improve the efficacy of customer’s services where the sales executives are productive and they are able to serve the customers in a better and unique way. The waiting time of the customers become less due to such technological advancement as well as the company manager can handle the store efficiently through the bar code reader. It also helps to reduce the data error and manage the products successfully at different stores (kaizenkulture.com, 2020).

Creating values for the customers:

The company focuses on creating values for the customers by delivering high quality products at affordable price, so that the customers can make effective purchase decision for the organisational products and services. In this regard, Tesco is efficient to manage their lean principles and develop customer’s centric model to run their business operational activities. In this regard, Tesco also introduced club cards and other loyal points and bonus, which further enhance customers trust and loyalty. The company is hereby efficient to manage their millions of customers across the UK and globe by satisfying them through delivering the quality retail products at its best price (pdfs.semanticscholar.org, 2020). Hereby, the above mentioned strategic planning of Tesco is effective to manage their operations and create values for all he stakeholders, mainly the customers. The company has introduced aerodynamic-lorries which are also another effective policy to manage their operational activities, supply chain and distribution network, where the mangers try to manage their suppliers and fulfil their commitment successfully (Solutions and Belt, 2017).

2.5 Continuous improvement plan

Continuous improvement plan is suitable for the organisations to manage their operations and fulfil the organisational aims and objective successfully and in this regard the tool of “Plan-Do-Check-Act” is useful for continuous improvement, where the company can ensure future sustainable development by restricting the organisational operational policies and practice. Planning is important to initiate the improvement of the operational activities and in this regard the organisation Tesco aims at restricting their strategic planning, were the major risk of the company is increasing the cost of production and operations. Though the company focuses on delivering the high quality products and services to the customers, the company belongs to higher economic region and it becomes difficult fair the organisation to manage their operations and secure future sustainable development. Lack of transportation and poor management of supply chain may raise the issue of failure of the organisational products and services to be delivered (Vu, 2016). There is another issue which is absence of online grocery technology in the global market which is another major reason lack of customer’s retention at the international markets. In the recent retail of digitalisation, there is high demand of e-commerce activities and online shopping and due to lack of online presence in the global markets the company faces difficulties to manage their operations successfully. Checking the internal [policies and procedure of running the organisational operations is also necessary to develop further action plan and in this regard, the company is successful ERP and cloud computerized system management, but it was on spreadsheet. Though the computerised system is helpful to track the products and services easily, it needs proper up-gradation and technological innovation at the workplace to manage the vendors and the suppliers. On the other hand, the company needs to implement electric cars for supplying the products, and it is sustainable solutions for the organisation which helps to provide green environmental footprint. In addition to this, the company needs to develop online website for promoting the products and services at the market and attracting the target audiences successfully. Through strengthening the supply chain management and the development of the online shopping activities are effective for the organisation to establish the brand sustainably in the global retail market (tallyfy.com, 2020) [Referred to Appendix 3].

3. Recommendations

As per the above discussion, it has been concluded that, the company is efficient to manage their operations and supply chain to run to their business efficiently in the global retail market. In this era of globalisation, there is high competition in the global retail industry and it is necessary for the organisation to restructure their strategy for customer’s management and supply chain management. The application of cloud environment and WERP are held through traditional spreadsheet, but the company needs to restructure the technology and introduce the automatic process to manage their cloud system more efficiently. It is effective for the fir to create positive relationship with the suppliers and the vendors. It also provides a scope to the company to manage time and make the operations efficiently within proper time. Customer centric model is also necessary to be developed to serve the customers in a better and a unique way, where the organisation needs to improve the website and customer’s portal and manage the customers by 24*7 services through calling and chatting option. The continuous improvement model in this regard is mandatory for the firm to focus on improving their operations by technological advancement and creativity.

4. Conclusion

It can be concluded that, the organisation has in the better position where the management team is able to run their operational activities more efficiently. The lean principles and application of ERP and cloud computing system and other software implementation would be helpful for the origination for improving their operational efficacy and excellence. The company and reduce the number of business risk by managing their operations and improving the quality control and continuous improvement model at the organisational workplace which are sustainable for the organisation to manage the supply chain and distribution network.

Reference List

Heller, F., 2017. Technological innovation applied to walmart and tesco’s supply chain (Doctoral dissertation).

Jones, P. and Comfort, D., 2020. An exploratory case study of resilience and the leading retailers in the UK. International Journal of Management Cases, 21(4), pp.5-18.

Kantorowicz, J., Hlobil, T. and Buiten, M., 2018. Store-based retail market openness: measuring cross-border operations and investment.

Solutions, I. and Belt, G.B., 2017. THE IMPACT OF STRATEGIC MANAGEMENT AND STRATEGIC THINKING APPROACHES ON BUSINESS PERFORMANCE OF COMPANIES OPERATING IN THE RETAIL INDUSTRY.

Vu, M., 2016. IS THE BALANCED SCORECARD USEFUL IN A COMPETITIVE INDUSTRY?: Using Tesco PLC as a case study in the UK grocery retail industry.

Mangan, J. and Lalwani, C., 2016. Global logistics and supply chain management. U.K: John Wiley & Sons.