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Title: Operations Management Report on Tesco

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Question: Analyse and evaluate the operations management of Tesco (you have to research appropriate information
about this organization) - You can based on the following two questions: 1) An analysis of type of operations carried out
and operating processes, e.g project batch, mass, professional service, service shop, and mass service). 2) An identification
and evaluation of the major strengths and weaknesses of the operations function in the organisation (Tesco). You should
use a framework such as the 5 performance objectives. Consideration must be given to the customers view, i.e. order
winners and order qualifiers. You may benchmark to evaluate if the feature is strength.

Operations Management Report on Tesco

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Contents
Introduction .......................................................................................................................................5
Analysis of type of operations carried out and operating processes in Tesco ...........................................5
Analysis of strengths and weaknesses of operation function in Tesco .....................................................6
Conclusion .........................................................................................................................................8
References .........................................................................................................................................9

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Introduction

Operations management is a fundamental part of any business firm. It refers to designing,

operating and controlling the transformation process that see the conversion of resources such as

labour and raw materials into the output such as finished goods and services. The significance of

operations management has increased dramatically over the past decade. Major reasons for such

increased attention on operations management are foreign competition, shorter service and product

life cycles, and better-educated and quality conscious consumers (Hollins and Shinkins 2006).

Tesco is known for its effective operations management that helps it to keep the stock to an

optimum level and make an appropriate match between the supply and demand of products it

provides to the customer. The essay discusses the operations management process of Tesco along-

with identification of major strengths and weaknesses of the operations function in Tesco.

Analysis of type of operations carried out and operating processes in Tesco

Tesco Plc has to ensure that its stores always maintain the effectiveness so that they can

attract large number of customers. As Tesco is a large enterprise, it has to continuously ensure that

the products are always ready to be put on the store shelves all the time so that customers do not

get diverted to the other store. Tescos working operations include cleaning, shelves filling,

delivery of goods, and working tills. Higher management of Tesco has set different objectives in

relation to the category of choice, people and price (Tesco's Supply Chain Management Practices

2014).

Customer holds utmost importance for any organization as it leads to maximization of the

profit. Suppliers come at second place, as they are responsible for providing the products in regards

to the needs of the customers. Employees are third in priority as they are the people directly

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involved in the operations and selling activities. Shareholders are also important for financial

perspective (Profile Tesco 2014). Tesco uses inventory analysis and control system that needs

classification and measurement. Classification prioritizes the stock on the basis of value. The need

for more sophisticated approaches for inventory planning and control in Tesco operational

activities has resulted in the growth of complex information systems that measures the level of

inventory and reorder the stock automatically. The system updates the stock record and generates

reports on the position of the stock so that operation managers can see the status of actual inventory

against the forecasts (Elearn 2013).

Tesco does not process in batches. It focuses on lean manufacturing, thus avoiding large

batches. RFID project of TESCO also focuses on lean manufacturing as RFID tags are able to

provide immediate value. Accuracy of the records of the stock is much better in lean manufacturing

as compared to processing in large batches (Brown 2006).

Analysis of strengths and weaknesses of operation function in Tesco

As per the 5-performance objective framework, five performance objectives for Tesco

operations are speed, quality, cost, dependability, and flexibility. Order qualifiers for Tesco

operations are quality and cost. Order winners are speed of delivery and flexibility for increasing

or decreasing the output for meeting the demand (Jones and Robinson 2012). Tesco shows strong

commitment towards the quality of the product and it places extra focus on maintaining freshness

of food items. Proper observation is done in the case of not only selection of the supplier, but also

the time for which the food product is kept in the storehouse. Expiry date is strongly checked

along-with the dealer system in place for supervising the quality. Cost is required to be maintained

at low level (Florkowski, Prussia, Shewfelt and Brueckner 2009).

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 Tesco gives highest priority to speed of delivery so that it can meet expectations and

demands of the customer. Online service of Tesco is an example of how the company provides its

customers with better use of time and money saving through 24-hour online delivery service.

Speed is directly related to winning more customers and increasing the business. Highly advanced

information system enables the company to keep pace with the demand and supply dynamics with

real time stock recording (Profile Tesco 2014).

Flexibility: Tesco has been using internally developed analytics model in order to bring

improvement in its supply chain. The system mainly targets the inventory management systems

for predicting the purchasing habits of customers in a better way and tracking the effectiveness of

special sales offers it gives to its customers (Tesco saves millions with supply chain analytics

2013).

In particular, weather patterns are considered in the analytics model in order to stock store

shelves in a proper way. It looks at the history and patterns of buying data and expected

temperature trends. Tesco can predict in an accurate manner what type of products consumer

purchase in a specific location and thus supplies the area accordingly. Through adding the weather

effect to the analytics model, the company reduced its out of stock for the good products of weather

by the significant factor of four. Furthermore, the effectiveness of each sale at the store enables

the enterprise to determine which sales offers will be successful again and how to better stock the

store shelves in order to accommodate increasing or decreasing demand patterns of specific

products (Tesco Improves Supply Chain with Big Data, Automated Data Collection 2013).

However, the weakness of the company lies in maintaining the efficiency of operations in

terms of lean manufacturing. No flaws are present in the lean culture itself. However, the weakness

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is in the system of implementation. Supply chain managers feel that long process batches can lead

to the reduction in cost, and cost can be easily managed as the use of logistics resources is

optimized. However, Tesco has combined lean operation management with RFID technology to

give high-velocity products to the customer (Brown 2006).

Conclusion

Tesco is a successful retailer and uses operation management in a successful manner. Operations

management holds significance for all organizations. Operation function of Tesco is identified by

performance objectives of speed, quality, cost, dependability and flexibility. The strengths of the

company are speed, flexibility and quality of the product. The weakness lies in perception of

people for adopting lean operation management. The weakness, however, is done away through

innovations.

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References

Brown. 2006. Rfid Implementation. New Delhi: Tata McGraw-Hill Education.

Elearn. 2013. Quality and Operations Management. London: Routledge.

Florkowski, W.J., Prussia, S.E., Shewfelt, R.L. and Brueckner, B. 2009. Postharvest Handling: A

Systems Approach. UK: Academic Press.

Hollins, B. and Shinkins, S. 2006. Managing Service Operations: Design and Implementation.

London: SAGE.

Jones, P. and Robinson, P. 2012. Operations Management. Oxford: Oxford University Press.

Profile Tesco. 2014. [Online]. Available at:

http://innovationleaders.org/tes_company_profile.html [Accessed on: 30 October 2014].

Tesco Improves Supply Chain with Big Data, Automated Data Collection. 2013. [Online].

Available at: http://www.rfgen.com/blog/bid/285148/Tesco-Improves-Supply-Chain-

with-Big-Data-Automated-Data-Collection [Accessed on: 30 October 2014].

Tesco saves millions with supply chain analytics. 2013. [Online]. Available at:

http://www.information-age.com/technology/information-management/123456972/tesco-

saves-millions-with-supply-chain-analytics [Accessed on: 30 October 2014].

Tesco's Supply Chain Management Practices. 2014. [Online]. Available at:

http://www.icmrindia.org/casestudies/catalogue/Operations/Tesco%20Supply%20Chain

%20Management%20Practices-

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 Operations%20Case%20Studies.htm#Tescos_SCM_Initiatives [Accessed on: 30 October

2014].

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