Case Studies: Tesco & Adverts

Efficient Consumer Response, an industry/food store effort to provide maximum consumer

satisfaction with minimal structural cost by eliminating waste in ordering, replenishment,

assortment and promotions through information technology.

Electronic Data Interchange: the computer-to-computer exchange of structured information,

by agreed message standards, from one computer application to another by electronic means

and with a minimum of human intervention

*Questions were answered By Kyriacos Nicolaou and Thomas Panagiotopoulos

Tesco Case Study:

Question 1

Benefits for suppliers and retailers:

Suppliers are allowed direct access to store level sales data on their products as well as

information on wastage, margin and stock availability. This will assist suppliers to achieve

ECR and reduce their own inventories. Suppliers clearly have a better understanding of their

specific product lines; better product availability and reduction of inventory. Suppliers can

monitor changes in demand almost in real time. The way data is analyzed in a number of

ways, it allows suppliers to see how sales perform by distribution centre. The benefits of the

suppliers are directly mirrored on the retailing side of things: better management and planning

on one side, implies better management and planning on the other. The entire process relies

on reciprocity between the two to make it a success (integration has overcome separation).

Question 2

Differences between EDI and Tie:

The EDI system was initially limited to streamlining store replenishment. Subsequently Tesco

had begun using it to help its suppliers better forecast demand. Tie was first used in 1997

to achieve a more sophisticated two-way collaboration in its supply chain. One of the most

important aims of the Tie system was to shift responsibility for managing products down to

the relevant supplier; this stems from Tie’s primary principle, which was to combine Tesco’s

retailing knowledge with the product knowledge of its suppliers.

*(the numerous benefits can be seen in the answer for question 1)

Question 3

The reasons why only two of Tesco’s suppliers have fundamentally altered the way they work

in terms of the Tie system, most probably revolve around trust issues, and a resistance to

change./ They might perhaps feel that divulging too much information to an external entity,

can harm their business (i.e information leakage). Additionally, their management might

not trust surrendering wholeheartedly to technology. Supplementary reasons for the limited

number of suppliers adapting at a high level to the Tie system, might be the high cost of

restructuring their business, as well as a lack of personnel able to respond positively to this

change.

Supply Change Management

Question 1

Advert 1:

The main processes the manager is responsible for are customer services and supply chain

management. Supply chain management in this case will include procurement; product

development; coordination of all operating departments; leadership of functional reports;

purchasing; master scheduling/ manufacturing control and data management. The manager

must have knowledge of dealing with suppliers; systems development; implementation and

maintenance; material management; sales forecasting and capacity planning. Furthermore,

personal attributes should include excellent communication and analytical skills and thorough

IT business management tools, such as SAP; Oracle; BPEX.

Advert 2:

The processes the manager is responsible for are the management of information channels

between customer, company suppliers and partners. The manager will thus be required to

constantly monitor production against cost to achieve optimum performance levels. His/

her skill should include education of a high standard (preferably with a relevant degree),

excellent analytical and problem-solving skills; strong systems knowledge and experience in

planning and inventory control (preferably in a shortlead-time environment). A high degree of

motivation, strong influencing and communication skills are also sought after.

Advert 3:

The processes the manager will be responsible for will include coordination activities between

operations and function; and the direct control of distribution and third parties. Skills required

include a background of commercial and budget responsibility, and being customer-focused

with character, drive and energy.

Advert 4:

The manager will be responsible for efficient distribution operation. Extensive transport and

management experience is required, in addition to analytical and planning skills.

Question 2:

It is pivotal to the person hiring, that he ends up offering the job to someone with the

necessary skills and experience. Due to the dynamic and delicate nature of the markets the

jobs are positioned in, there is no room for mistakes from the manager. He must possess the

skills required in order to fulfill his duties, and must have the wisdom (which only comes by

implementing knowledge over the course of time and harvesting the results) to support his

decisions. Time is crucial to certain processes; therefore there is no time to learn certain skills

on the spot, through trial and error.