Question

Describe the key logistics processes and supply chain functions used to create value for Tesco’s global supply chain.

Answer 1

Tesco supply chain has proven excellence due to their focus on these three objectives:

1. Increasing the availability for their customers

2. Ensuring fresh and clean food along with reduced waste

3. And improving the overall efficiency by building a stable business while also maintaining a partnership with the suppliers

So, the logistics process which they use to meet the above objectives are:

1. Regional distribution centre: They have established composite distribution centre from where they manage the supplies of varying temperature ranges. From there, they ensure daily delivery service to all their stores nearby.

2. EPOS System: They have established electronic point of sale system in which whenever a sale of any product occurs at the store then it gets updated in the Tesco information system and this helps Tesco to maintain the availability of all the SKUs at the store level and so, the store doesn't need to reorder but the Tesco itself manages their inventory.

3. Pick to Zero: In their distribution centre, for the fast-moving products, they work on the philosophy of maintaining minimum inventory at the distribution and maintaining the stock at their trunking station. So the delivery of the product is divided into four parts and depending upon their shelf life and cost, specific products are delivered in different cycles throughout the day. This let Tesco to use the same space in their distribution centre multiple times.