MANAGEMENT

Strategic Supply Chain of Tesco

Strategic Supply Chain of Tesco

Introduction

Strategic supply chain management is a booming field and has a high degree of significance in the context of augmenting the competitive advantage. We would look at the competitive advantage of Tesco and look to devise a strategy based on supply chain management practices. The aspect of strategic supply chain signifies that supply chain management practices perform a major role in the strategic implementation of businesses (Robert & Trent, 2008, p. 33). In essence, the strategic supply chain management is a comprehensive field and there are a multitude of factors involved in it. Strategic supply chain management pertains to the strategic, technological and operational integration based on customer efficient processes that strive to strengthen the competitive advantage of organizations.

Background

Tesco is one of the leading retail chains not only in the context of United Kingdom but also on an international scale (Gilaninia et al, 2011, p110). It offers products of all the major brands and has attracted a huge clientele. The competitive advantage of Tesco is to deliver high customer value on the basis of innovative service processes. Tesco prides itself on creating a high degree of customer value by constantly reinforcing and reengineering the service processes. It believes that by constantly providing efficient services, a great number of customers not only would be attracted but also would be retained (Thatte et al, 2013, p.500). We would look to outsource the aspect of Tesco's distribution as a major factor in enhancing the overall supply chain efficiency of Tesco. Tesco can make use of the concept of 3rd party logistics or 4th party logistics as it can greatly enhance the pace of distribution and transportation as well as increase the efficiency of the supply chain (Ma et al, 2010, p.131).

Discussion

Competitive Advantage

Since the main competitive advantage of Tesco pertains to increasing customer value, the aspect of outsourcing can come in very handy. With the outsourcing of processes, organizations have been known to enjoy benefits of low cost and high reliability. When organizations know that one of their departments is not performing well or are of the view that low costs can be had with outsourcing of major processes, they are prone to adopt outsourcing. It is a well known fact that China constitutes of being an economical market. Thus, as a result many organizations are using china as an economical market for outsourcing various types of functions (Tesco, 2013, pp.N.D.).

Third Party Logistics

The aspect of 3rd party logistics would be highly beneficial for Tesco as currently it has to lay emphasis on the logistics aspect. With the outsourcing of logistics aspect, Tesco would not have to worry about the logistics aspect and it would be able to achieve a great amount of saving with an economical market like China. Since the competitive advantage of Tesco pertains to providing a high degree of customer value by providing exemplary customer service, the outsourcing of logistics to a 3rd party would be a perfect option ...