OPERATION MANAGEMENT ON TESCO

Operation management on Tesco

Operation management on Tesco

Introduction to the Problem

Operations Management plays a key role in achieving the main performance objectives of Tesco. Whether the current operation objective is to improve customer service or to increase profitability, the way in which Tesco utilises its resources will have a significant impact. As a consequence, there have been a number of innovative developments in Operations Management that have sought to make use of Tesco resources in a significantly new manner in order to make a big step change in performance. Tesco is an successful example of operations management, however, through our investagation they also have some demerit in their opertions management need to be improved. (Fernie and Sparks, 2008, pp.15-19)

The Institute for Retail Studies's research (2007) reports that retail industry in the UK is quite competitive, dynamic, and innovative in recent years. And grocery retailers such as Tesco, Sainsbury's, Asda etc. are all compete on price, quality, range, and service in order to strive for business success. Within this intense competition of retail industry, Tesco can stand at market-leading position in recent years has mainly come from its strategies of expanding overseas, shifting to 'higher margin' non-food market and maintaining a strong core UK business (Corporate Watch UK, 2008). And its UK success has been built on low prices, cultivating customer loyalty, unbeatable quality, offering a range of different store concepts and expanding into retailing services (Tesco Plc annual review, 2006). Moreover, according to Business Engine, Inc. (2006), it reports that close control of internal resources and diligent monitoring of all expenditures are also the critical aspects for Tesco to maintain its leading position in the market. Therefore, Tesco's business success indicates that effective operations strategies have played a vital part in supporting and driving its whole business objectives which is "to create value for customers to earn their lifetime loyalty".

Accordingly, the purpose of this report is to investigate and analysis operations management in Tesco. The report will mainly go through three aspects of Tesco's operations management: operations management performance objectives, planning and control in use, and measurement and improvement activities. Finally, conclusions and recommendations will be drawn from analysis.

Process Under Considering

According to Slack et al. (2008), operations strategy is defined as "the total pattern of decisions which shape the long term capabilities of any type of operation and their contribution to overall strategy". Slack et al. (2008) also states that operations performance objectives relate to the interests of the operation's stakeholders. Applying to Tesco, customer's satisfaction is particularly important to its business. Therefore in order to satisfy its customers and contribute to competitiveness, Tesco's operations performance objectives are mainly reflect on cost, quality, speed, dependability and flexibility five aspects. And they will be analysed in detail as follows:

With regard to pricing, Tesco every week check over 10,000 prices in Asda, Sainsbury's and Morrisons stores to guarantee its customers have low prices every day. And it also took steps to reduce cost in order to ensure that the way they ...