International Journal of Retail & Distribution Management

International Journal Of Retail & Distribution Management. 290 Downloads | 10 Pages 2,499 Words | Published Date: 21/10/2016. Beverley Robertson 4.8/5. Introduction: Zhang (2012) stated that supply chain activities in retail organization impact on the quality of products and services. Ralston et al. (2013) opines that business growth of an organization which work in retail market depends on the effectiveness of its supply chain model. The supply chain management can be considered as the combination of several sub processes including receiving products from suppliers, transporting to distribution center, storing and handling materials and delivering final product to customer (Schönsleben, 2012). Pienaar and Vogt (2012) stated that each activities in supply chain management impacts differently on each stakeholder of the organization. However, Myerson (2012) suggested that different organizations develop different supply chain models according to their requirement. Although the organizations in retail sector uses different models for executing their activities in logistics operation, all these activities aim to improve common performance objectives such as quality of product, service delivery time, speed of delivery , cost of product and flexibility of handling products (Rutner et al , 2012). The current assignment deals with analysis of the supply chain management system used by Tesco. Tesco is one of the largest retailers in UK (Tesco.com, 2015). However the organization operates in other European and Asian countries also. The retail network of Tesco can be considered as one of the largest retail networks. The organization modified their supply chain management activities several times for meeting the requirements of stakeholders. However in this a assignment continuous replenishment model of supply chain is discussed. Supply chain activities of Tesco: Tesco management implemented continuous replenishment model of supply chain in 1999. This continuous replenishment approach uses a flow system for collecting data regarding stock of products (Zhang, 2012). On other hand implementation of this new system enabled the management of Tesco to send daily orders to suppliers (Zhuang, 2014). Figure 1: Supply chain activities in Tesco. Inbound Logistics: Receiving orders from suppliers and storing at depots: The task of receiving orders from suppliers can be considered as combination of three separate tasks- In store management, management of retail network and cross docking. Tasks. Quality. Speed. Dependability. Flexibility. Cost. In store management. Improves as products are not stored for long time. Speed of delivery to customer increases as products are ordered before running out. Dependability improves as products are always available. · Mix flexibility improves as stuck is always maintained. · Volume and delivery flexibility increases as availability of products increases. Cost of operating reduces as all activities are pre planned. Network management. Improves as separate storage systems are used on basis of product category. Speed of delivery to customer increases as new storage locations are added with existing network. Availability of products improves due as storage capacity improves. Product , volume and delivery flexibility improves as availability increases. Cost of operation decreases as efficiency of storage system improves. Implementation of flow through activities. Quality of products improves as time of storing reduces. Speed of delivery increase as finished products are received. Dependability improves due to increase in product availability. Volume and delivery flexibility improves as products become available in less time. Cost reduces as storage time reduces. Receiving products from supplies and performance objectives. Table 1 reflects how performance objectives are met by the activities in storage process of Tesco. In store management: Retail store managers of Tesco regularly analyses data on buying behavior of customers. Apart from this the managers also analyze the capacity of a store for developing stock of products. According to Klug (2014) analyzing the capacity of store is important to maintain quality of stored products. As Tesco operates in different country across world capacity of all stores is not same. On other hand, nature of customers also varies greatly at different countries. However managers of each store in the retail network of Tesco separately determines the buying nature of customers and storage capacity. On basis of their findings, they send orders to the suppliers daily. Network management: Management of Tesco continuously adds new locations for increasing efficiency of the storage activities. Addition of new sites in existing network enables the management to increase their storage capacity regularly. However the management also focuses in increasing the number of frozen centers for storing frozen parts of composite elements separately Regional centers of Tesco also contains cross docking facility for improving the storage system for refrigerated materials. Implementation of flow through activities: Tesco management uses flow through approach for reducing the complexity in storage system. Manager of the organization prefers to get finished products from suppliers. As the organizations receive finished products, these can be placed in stores immediately after receiving (Grant, 2012). Performance objectives: Analysis on the tasks conducted by Tesco for storing products indicates that this approach of Tesco management is effective for improving quality of products. As the management determines daily requirements of products, stock never runs out. Apart from this as managent send orders according to the capacity of a store products do not required being stored for a long time. On other hand analyzing requirements daily ensures that availability of product is always high (Fatieiev and Zaporozhets, 2014). It also ensures that the requirements of customers can be met even if the demand for a product rises certainly (Forslund, 2014). The activities for network management lead to increase in storage capacity. As these activities enable management to store different products in different locations on basis of product nature, quality improves. On other hand, increase in storage capacity makes the products more available. As a result, dependability, flexibility and speed of delivery also improve. Use of separate storage systems and increasing storage capacity may increase the cost of operation initially (Crocker et al., 2012). However it reduces later as the storage system becomes more effective.