Tesco Supply Chain Case Study

In addition, with the aid of its availble supply chain infrastructure Tesco (M) is able to evolve to another paradigm shift in the supply chain spectrum towards being structurally flexible. This is a very recent evolution for Tesco as the market and economy turbulence is constantly amplifying. The effect on turbulence such as inflation, fuel price, resources shortage and surplus, supply chain complexity leads to volatility in supply and demand to become more fragile.

Despite numerous success in adapting and restructuring its supply chain management, Tesco (M) noticed a recent impact in a new internal turbulence which has led to its both upstream and downstream flow to be mismatched. Downstream whereby a shift in customer pattern either leaving

A slack in this will cause the breakdown in the entire supply chain. Figure below was depicted from Tesco company document to illustrate the current issue in data management performance as information, sourcing and transportation were implemented as secondary drivers. Sourcing team was not able to provide an accurate forecasts and an intermittent changes in the orders under very short notice impacts the external supporting team, in this case, suppliers had no ability to drive efficiency in the supply chain network. There was a clear sign of intra functional scope in Tesco (M) operations as sourcing team does not have visibility or understanding on the impacts on the end-to-end costs to ensure the shelfs are always fully

Tesco (M) marketing team identified in a ratio that one loyal customer is worth five times a newly acquired customer. On the contrary, customer loyalty was declining significantly in respective departments geographically whereby competitiors had the benefits of attracting customers walking out from Tesco (M).

With the aid of Tesco’s advantage in system tools and the rich resources of analytical staffs, Tesco (M) initiated a project to study the decline in customer loyalty towards its brand eventhough Tesco had the advantages of cost leadership strategy. Tesco (M) also wanted to extend its research and understand customers hunger and becoming priority brand in their purchase choice.

Though Tesco (M) had an advantage in competitive priorities by balancing the need for responsive and efficient supply chain with its cross functional and logistical drivers integrated, vast quantity of product assortment created a new form of turbulence in the common demand and supply uncertainity. This applies to both grocery and non-grocery