Description
This article shows the productivity analysis of Tesco.
12/21/2015
Managing Productivity for Development of
Organization
Submitted To:
Sir Imtiaz ul Haq
Submitted By:
Anam Tayyab RMBA-FAL12-078
Talha Bukhari RMBA-FAL12-069
Salman Akram RMBA-FAL12-002
Ayesha Masood RMBA-FAL12-070
Introduction
? Tesco is a global grocery and general merchandise retailer headquartered in United
Kingdom.
? Tesco opened its first store in 1929
? With net profits of around £3.4 billion Tesco has become the largest British retailer. Tesco's
growth has resulted in a worldwide workforce of over 468,000 employees.
? Tesco is known as one of the largest in world and UK's leading food retailer. It is operating
around 2318 stores (www.Tescoplc.com). It provides services under four banners known
as Extra, Superstore, Metro and Express. We can find any of these in every corner of city.
This easy access and huge variety of food make it the first choice of customers. It fulfils
the need of every kind of customer. Whether it is a school going child or it is a senior
citizen. It is the first food retailer that provides the online shopping for food. So it is not
leaving even a small hole behind. It is attracting more and more people beyond the
geographical barriers. It is providing the facility of club card on point based system for its
loyal customers and give them a small rebate on purchases.
Approach to Quality Management at Tesco
In this report identification of each organization’s current and prospective customers is
given and stated that whether the organization operations are designed in a way that fulfil the needs
of customers by analyzing the competitive priorities such as cost, speed, flexibility etc. and quality
management at both organizations.
Low Cost
Here the suppliers have fear of losing their business to the large supermarkets such as
Tesco. So they negotiate with supermarkets with better promotional prices of products. Thus
customers get products at lower prices but with the same quality.
Quality
Tesco know known as a brand. Being a brand it is a measure of quality. So it provides food
with better quality.
Speed and Delivery Time
Tesco is efficient in speed and delivery time. As small scale operations of Tesco are
available at every corner of cities and towns under the brand name Metro and Express. So getting
to the store, making purchases and returning takes very much less time.
Approach to quality management at Tesco
100% customer satisfaction and without any defect' is a concept of Tesco. Every product
goes under quality checks to provide the qualified product and value for the money of customer.
Quality is checked throughout the supply chain. From growers to until the product is placed in
store.
Operations management does not deal with the whole organization. Its main concern is
production business unit of organization rather than Finance, HR or IT. It involves the activities to
produce and distribute the products and services. Following is one of the key concept of managing
operations at Tesco.
TQM of Tesco
Total quality management is the key concept to be managed in Tesco. It does not only deal
with assuring the product and service quality but it tells about the way of doing business. It deals
with managing people and processes of business so that the customer satisfaction can be achieved.
Customer satisfaction is of foremost importance in Tesco business. Here, TQM is related to the
'doing the right things right, first time'. Customer can be internal as well as external. When Tesco
buys food products from their suppliers then it is a customer and when it sells products then it is
serving its customers. Tesco manages its total quality concept in following ways:-
? Quality control System
? Benchmarking
? Employee Involvement
Quality control System
1. Prevention
It is good to avoid the manufacturing of defected products rather than finding of
defects in them.
2. Zero defects
Tesco's main aim is to produce the defect free products and minimize the defect level
if product is complicated.
? Safety - All products must meet our microbiological standards throughout there shelf
life.
? Quality - The products must look great as well as taste delicious.
? Legality - All legal requirements such as compositional standards and labeling must
be met.
? Customer Focus - Products will only be sold if there is a customer need for them and
they deliver a fit for purpose solution.
3. Getting things right at first
It is better not to produce the products rather than producing defective one.
4. Quality involves everyone
Tesco applies this concept not only to the production and operation department but
It involves other business units of organization such as marketing, human resource and
finance as well.
5. Continuous improvement
It always looks for the improvement in the products and processes. To do that it
applies the Lean management concept.
Continuous Replenishment
Employee involvement
It involves the employees that are involved in the production and operation processes to take the
feedback from them. So that it can do the required improvements.
No one tries harder for customers
• Understand customers better than anyone.
• Be energetic, be innovative and be first for customers.
• Use strengths to deliver unbeatable value to customers.
• Look after people so they can look after customers.
The target of cross-departmental survey considered some of the values which staff themselves
wanted to see in Tesco:
? Values associated with customer service.
? Job satisfaction,
? Trust, fairness and integrity
? Open and honest communication teamwork,
? Quality standards
? Motivation
? Profitability
? Commitment
? Success and continual improvement,
To support its productivity, Tesco training its staff that are motivated, flexible and well-
trained and who recognize customer needs. Tesco recognizes that employee motivation is
important for the continued productivity of the company.
Quality Programs
One of Tesco's key business strategies on inward bound the Irish market in 1997 was to
build close relationships with the Irish supplier-base to increase the amount of business with Irish
suppliers producing Tesco own brand products and branded goods for stores in Ireland and for
export to the UK and to the wider Tesco Group.
Tesco Ireland put a 12-strong team of technical, quality and trade development experts in
place to work with supplier companies' construction their product development skills and market
expertise, to help them prosper in a rapidly changing commercial environment. Over 130
companies have benefited from the program to date, including Bewleys, Country Crest, Dublin
Meath Growers, and Glanbia, Gold star Meats, Irish Yoghurts, Lir Chocolates, Largo Foods and
Shannon Minerals.
These 130 agreed Irish suppliers of Tesco brand now supply over 1,000 food and non-food
products to Tesco Ireland, and to the wider Tesco Group, including eggs, ham, rashers, beef, fish,
milk, cheese, bread, burgers, bottled water, biscuits, ice cream, jam and the full range of Irish fruit
and vegetables. Only 20 companies were permitted suppliers in 1997, before the program started.
As a result of this program, and other support for Irish suppliers, Tesco now buys over É1.5
billion worth of goods from some 800 Irish companies, over 80% of which are small to medium
sized enterprises. É400 million-worth of products are exported to Tesco in Britain annually.
Supplier companies have created 1,025 new jobs as a result of improved business from Tesco.
Tesco is now the largest
Training and Development programs
As an innovative and vigorous company in the highly competitive retail environment,
learning and progression from within the company is core to our operation. Training forms a vital
part of staff development, focusing on our key business priority of continually improving our
service to customers.
We support our people to accomplish their potential through access to specially-tailored
training programs, and core skills workshops including effective meeting management,
presentation skills, influencing, root cause analysis, personal efficiency and communication skills.
All staff has regular performance reviews with their managers and agrees personal
development plans (PDPs), setting clear personal performance objectives. This ensures that all
staff has the right skills to do their jobs.
Benchmarking
Compliance with all components of the key elements will lead to support of a submitted
standard through the Initiative framework and subsequent getting by retailers. Once a food
standard has been benchmarked successfully, the standard is "acknowledged". The conforming
benchmarked food safety standard can be applied by food suppliers throughout the whole supply
chain, upon agreement with retailers, when defining contracts for sourcing of products. The
application of the benchmarked standards to particular products will be at the maturity of retailers
and suppliers.
Different techniques used by Tesco to increase productivity
? Tesco’s Corporate Steering Wheel
? SIX SIGMA
? CROSS DOCKING
? RFID Technology
Tesco’s Corporate Steering Wheel
Throughout all our businesses across the
world we measure our performance through the
Steering Wheel, whether we work in distribution,
head office or in stores. This helps maintain focus
and balance in what counts to run each of our
businesses successfully, be it wage costs or whether
customers can get everything they want.”
CROSS DOCKING
Six Sigma
A measure of quality that strives for near perfection. Six
Sigma is a disciplined, data-driven approach and methodology
for eliminating defects (driving toward six standard deviations
between the mean and the nearest specification limit) in any
process from manufacturing to transactional and from product
to service. To achieve Six Sigma, a process must not produce
more than 3.4 defects per million opportunities. Lean Six
Sigma is one principle which combines Lean and Six Sigma
concepts for continuous process improvement and reduction in
variation.
RFID Technology
? Tesco used RFID also called radio bar codes on trial basis in 2003.
Advantages:
? Easy tracking of products.
? Provides unique identification & security.
? Helps in measuring and controlling every aspect of supply chain.
? Promotes faster processing of goods, lower costs and higher employee efficiency.
Profit results 2014/15 (on a continuing operations basis)
Financial statistics (£m)
Sales including VAT excluding IFRIC 13 67,074 71,402
Revenue excluding IFRIC 13
UK 40,766 42,803
Europe 9,192 9,866
Asia 9,802 10,828
US 495 –
Tesco Bank 919 1,044
Group revenue excluding IFRIC 13 61,174 64,541
Trading profit
UK 2,504 2,478
Europe 527 529
Asia 605 737
US (186) –
Tesco Bank 264 225
Group trading profit 3,714 3,969
Operating profit 3,917 4,182
Operating profit margin 6.4% 6.5%
Share of post-tax profits/(losses) of joint ventures and
associates
57 91
Net finance costs (333) (235)
Profit/(loss) before tax 3,641 4,038
Taxation (864) (874)
Profit/(loss) for the year from continuing operations 2,777 3,164
Discontinued operations (106) (350)
Profit/(loss) for the year 2,671 2,814
Conclusion
? It is important for Tesco to have an operational strategy because it establishes the types of
goods and services the company will offer its target market, and how Tesco are going to
get advantages over its competitors.
? Tesco made good planning and control in its capacity, supply chain and quality.
? Besides, in order to make improvements in operation, Tesco measures quality, speed,
dependability, flexibility and cost. Although they have made some improvements, there
are still some limitations in its operation.
? The future retains numerous distinct scenarios for Tesco. The business has currently
developed into a worldwide business. One of their likely future strategies could be
dedicated to gathering a spectacular clientele service, as they have currently developed
enough.
doc_891371114.pdf
This article shows the productivity analysis of Tesco.
12/21/2015
Managing Productivity for Development of
Organization
Submitted To:
Sir Imtiaz ul Haq
Submitted By:
Anam Tayyab RMBA-FAL12-078
Talha Bukhari RMBA-FAL12-069
Salman Akram RMBA-FAL12-002
Ayesha Masood RMBA-FAL12-070
Introduction
? Tesco is a global grocery and general merchandise retailer headquartered in United
Kingdom.
? Tesco opened its first store in 1929
? With net profits of around £3.4 billion Tesco has become the largest British retailer. Tesco's
growth has resulted in a worldwide workforce of over 468,000 employees.
? Tesco is known as one of the largest in world and UK's leading food retailer. It is operating
around 2318 stores (www.Tescoplc.com). It provides services under four banners known
as Extra, Superstore, Metro and Express. We can find any of these in every corner of city.
This easy access and huge variety of food make it the first choice of customers. It fulfils
the need of every kind of customer. Whether it is a school going child or it is a senior
citizen. It is the first food retailer that provides the online shopping for food. So it is not
leaving even a small hole behind. It is attracting more and more people beyond the
geographical barriers. It is providing the facility of club card on point based system for its
loyal customers and give them a small rebate on purchases.
Approach to Quality Management at Tesco
In this report identification of each organization’s current and prospective customers is
given and stated that whether the organization operations are designed in a way that fulfil the needs
of customers by analyzing the competitive priorities such as cost, speed, flexibility etc. and quality
management at both organizations.
Low Cost
Here the suppliers have fear of losing their business to the large supermarkets such as
Tesco. So they negotiate with supermarkets with better promotional prices of products. Thus
customers get products at lower prices but with the same quality.
Quality
Tesco know known as a brand. Being a brand it is a measure of quality. So it provides food
with better quality.
Speed and Delivery Time
Tesco is efficient in speed and delivery time. As small scale operations of Tesco are
available at every corner of cities and towns under the brand name Metro and Express. So getting
to the store, making purchases and returning takes very much less time.
Approach to quality management at Tesco
100% customer satisfaction and without any defect' is a concept of Tesco. Every product
goes under quality checks to provide the qualified product and value for the money of customer.
Quality is checked throughout the supply chain. From growers to until the product is placed in
store.
Operations management does not deal with the whole organization. Its main concern is
production business unit of organization rather than Finance, HR or IT. It involves the activities to
produce and distribute the products and services. Following is one of the key concept of managing
operations at Tesco.
TQM of Tesco
Total quality management is the key concept to be managed in Tesco. It does not only deal
with assuring the product and service quality but it tells about the way of doing business. It deals
with managing people and processes of business so that the customer satisfaction can be achieved.
Customer satisfaction is of foremost importance in Tesco business. Here, TQM is related to the
'doing the right things right, first time'. Customer can be internal as well as external. When Tesco
buys food products from their suppliers then it is a customer and when it sells products then it is
serving its customers. Tesco manages its total quality concept in following ways:-
? Quality control System
? Benchmarking
? Employee Involvement
Quality control System
1. Prevention
It is good to avoid the manufacturing of defected products rather than finding of
defects in them.
2. Zero defects
Tesco's main aim is to produce the defect free products and minimize the defect level
if product is complicated.
? Safety - All products must meet our microbiological standards throughout there shelf
life.
? Quality - The products must look great as well as taste delicious.
? Legality - All legal requirements such as compositional standards and labeling must
be met.
? Customer Focus - Products will only be sold if there is a customer need for them and
they deliver a fit for purpose solution.
3. Getting things right at first
It is better not to produce the products rather than producing defective one.
4. Quality involves everyone
Tesco applies this concept not only to the production and operation department but
It involves other business units of organization such as marketing, human resource and
finance as well.
5. Continuous improvement
It always looks for the improvement in the products and processes. To do that it
applies the Lean management concept.
Continuous Replenishment
Employee involvement
It involves the employees that are involved in the production and operation processes to take the
feedback from them. So that it can do the required improvements.
No one tries harder for customers
• Understand customers better than anyone.
• Be energetic, be innovative and be first for customers.
• Use strengths to deliver unbeatable value to customers.
• Look after people so they can look after customers.
The target of cross-departmental survey considered some of the values which staff themselves
wanted to see in Tesco:
? Values associated with customer service.
? Job satisfaction,
? Trust, fairness and integrity
? Open and honest communication teamwork,
? Quality standards
? Motivation
? Profitability
? Commitment
? Success and continual improvement,
To support its productivity, Tesco training its staff that are motivated, flexible and well-
trained and who recognize customer needs. Tesco recognizes that employee motivation is
important for the continued productivity of the company.
Quality Programs
One of Tesco's key business strategies on inward bound the Irish market in 1997 was to
build close relationships with the Irish supplier-base to increase the amount of business with Irish
suppliers producing Tesco own brand products and branded goods for stores in Ireland and for
export to the UK and to the wider Tesco Group.
Tesco Ireland put a 12-strong team of technical, quality and trade development experts in
place to work with supplier companies' construction their product development skills and market
expertise, to help them prosper in a rapidly changing commercial environment. Over 130
companies have benefited from the program to date, including Bewleys, Country Crest, Dublin
Meath Growers, and Glanbia, Gold star Meats, Irish Yoghurts, Lir Chocolates, Largo Foods and
Shannon Minerals.
These 130 agreed Irish suppliers of Tesco brand now supply over 1,000 food and non-food
products to Tesco Ireland, and to the wider Tesco Group, including eggs, ham, rashers, beef, fish,
milk, cheese, bread, burgers, bottled water, biscuits, ice cream, jam and the full range of Irish fruit
and vegetables. Only 20 companies were permitted suppliers in 1997, before the program started.
As a result of this program, and other support for Irish suppliers, Tesco now buys over É1.5
billion worth of goods from some 800 Irish companies, over 80% of which are small to medium
sized enterprises. É400 million-worth of products are exported to Tesco in Britain annually.
Supplier companies have created 1,025 new jobs as a result of improved business from Tesco.
Tesco is now the largest
Training and Development programs
As an innovative and vigorous company in the highly competitive retail environment,
learning and progression from within the company is core to our operation. Training forms a vital
part of staff development, focusing on our key business priority of continually improving our
service to customers.
We support our people to accomplish their potential through access to specially-tailored
training programs, and core skills workshops including effective meeting management,
presentation skills, influencing, root cause analysis, personal efficiency and communication skills.
All staff has regular performance reviews with their managers and agrees personal
development plans (PDPs), setting clear personal performance objectives. This ensures that all
staff has the right skills to do their jobs.
Benchmarking
Compliance with all components of the key elements will lead to support of a submitted
standard through the Initiative framework and subsequent getting by retailers. Once a food
standard has been benchmarked successfully, the standard is "acknowledged". The conforming
benchmarked food safety standard can be applied by food suppliers throughout the whole supply
chain, upon agreement with retailers, when defining contracts for sourcing of products. The
application of the benchmarked standards to particular products will be at the maturity of retailers
and suppliers.
Different techniques used by Tesco to increase productivity
? Tesco’s Corporate Steering Wheel
? SIX SIGMA
? CROSS DOCKING
? RFID Technology
Tesco’s Corporate Steering Wheel
Throughout all our businesses across the
world we measure our performance through the
Steering Wheel, whether we work in distribution,
head office or in stores. This helps maintain focus
and balance in what counts to run each of our
businesses successfully, be it wage costs or whether
customers can get everything they want.”
CROSS DOCKING
Six Sigma
A measure of quality that strives for near perfection. Six
Sigma is a disciplined, data-driven approach and methodology
for eliminating defects (driving toward six standard deviations
between the mean and the nearest specification limit) in any
process from manufacturing to transactional and from product
to service. To achieve Six Sigma, a process must not produce
more than 3.4 defects per million opportunities. Lean Six
Sigma is one principle which combines Lean and Six Sigma
concepts for continuous process improvement and reduction in
variation.
RFID Technology
? Tesco used RFID also called radio bar codes on trial basis in 2003.
Advantages:
? Easy tracking of products.
? Provides unique identification & security.
? Helps in measuring and controlling every aspect of supply chain.
? Promotes faster processing of goods, lower costs and higher employee efficiency.
Profit results 2014/15 (on a continuing operations basis)
Financial statistics (£m)
Sales including VAT excluding IFRIC 13 67,074 71,402
Revenue excluding IFRIC 13
UK 40,766 42,803
Europe 9,192 9,866
Asia 9,802 10,828
US 495 –
Tesco Bank 919 1,044
Group revenue excluding IFRIC 13 61,174 64,541
Trading profit
UK 2,504 2,478
Europe 527 529
Asia 605 737
US (186) –
Tesco Bank 264 225
Group trading profit 3,714 3,969
Operating profit 3,917 4,182
Operating profit margin 6.4% 6.5%
Share of post-tax profits/(losses) of joint ventures and
associates
57 91
Net finance costs (333) (235)
Profit/(loss) before tax 3,641 4,038
Taxation (864) (874)
Profit/(loss) for the year from continuing operations 2,777 3,164
Discontinued operations (106) (350)
Profit/(loss) for the year 2,671 2,814
Conclusion
? It is important for Tesco to have an operational strategy because it establishes the types of
goods and services the company will offer its target market, and how Tesco are going to
get advantages over its competitors.
? Tesco made good planning and control in its capacity, supply chain and quality.
? Besides, in order to make improvements in operation, Tesco measures quality, speed,
dependability, flexibility and cost. Although they have made some improvements, there
are still some limitations in its operation.
? The future retains numerous distinct scenarios for Tesco. The business has currently
developed into a worldwide business. One of their likely future strategies could be
dedicated to gathering a spectacular clientele service, as they have currently developed
enough.
doc_891371114.pdf