“Supply Chain Management”
Table of contents
Page | 1
Contents
Introduction.................................................................................................................................................3
Task 3 Understand the role of information technology in supply chain management................................3
3.1: Assess how information technology could assist integration of different parts of the supply chain
of an organization....................................................................................................................................3
3.2: Evaluate how information technology has contributed to the management of the supply chain of
an organization........................................................................................................................................4
3.3: Assess the effectiveness of information technology in managing the supply chain of an
organization.............................................................................................................................................5
Task 4 Understand the role of logistics and procurement in supply chain management............................6
4.1: Explain the role of logistics in supply chain management in an organization...................................6
Task 4.2: Evaluate procurement practices in an organization.................................................................7
Task 4.3: Discuss the factors that must be considered when improving logistics and procurement
practices in an organization.....................................................................................................................8
Conclusion...................................................................................................................................................9
References.................................................................................................................................................10
Page | 2
Introduction
The need to collect and assess the critical information regarding proper delivery of products and
services to the customers gives emergence to the supply chain management. The organizations
need to evaluate this information so that it will help them to reach their goal using their entire
network. For this various organizations spend their valuable time as well as resources in
searching for right suppliers and retain them. When the relationship with the network is flexible,
it ensures the better management of the supply chain.
For the completion of this assignment, we have selected Tesco Pvt. Ltd. which is considered as
largest supermarket across United Kingdom (Est.: 1924 By John Edward). Objectives of TESCO
are- to offer best product at reasonable price, to understand customer’s need and fulfill them, to
build long term relation with its customer and supplier etc.
Like most of the companies, Tesco has its own procurement practices that are followed in their
supply chain management. And this process increase their overall productivity and results in high
customer satisfaction.
Task 3 Understand the role of information technology in supply chain
management.
3.1: Assess how information technology could assist integration of different
parts of the supply chain of an organization.
Information technology is now the latest trend as well as the most important source of getting
information (Rudzki, Robert A. Straight To The Bottom Line. Ft. Lauderdale: J. Ross Pub.,
2006, p188). Almost all the sectors of business organization, especially modern business
organization, are using information technology so that they can get assistance in the integration
process of the distinct parts of their supply chain management within the organization.
Tesco, one of the world’s renowned and leading organizations, also uses IT in order to
completely integrate the supply chain. The major web based technology they use is internet.
Internet is the greatest source of an extensive punch that has the power to alter the overall
Page | 3
functions effectiveness of an organization. It can indeed impact the supply chain management of
the company. In case of Tesco, internet brought the following insurrections-
Implementation of the web based distribution channel.
Performance efficiency of value chain activities.
Rising power of the competitive factors.
So Information technology has been a great support for the development of the Tesco and its
products. This has helped a lot in providing the best benefits to the customers as well as the
company. As customers now easily get all the products whenever they want, it has result in
increase of customer satisfaction. And ultimately it is the key to success for every organization.
Besides, using web technology, Tesco has introduced Efficient Consumer Response (ECR). It is
an invention that delivers superior value to the customers which in turn improve the motivation
of the suppliers to perform better. Thus Tesco is playing its best to grab the advantage of IT for
the proper integration of the supply chain.
3.2: Evaluate how information technology has contributed to the management
of the supply chain of an organization.
Supply chain management is the exchange of information among the members of the supply
chain (Harland, Christine, Guido Nassimbeni, and Eugene Stewart Schneller. 2013, The SAGE
Handbook Of Strategic Supply Management, p 111). And information Technology is one of the
most important instruments that help in availing this information & distributing them. Earlier the
transmission of information was completely paper based. It was quite difficult for the member of
the organization and the supply chain to ensure the proper flow of this information. As this
method was very slow, it consumed a great deal of time. Besides, there was a threat of securing
and storing the information. As a result, they felt the need of web based information technology
and with its emergence the door to accurate information transfer opened up. Tesco, using this
revolutionary technique is getting much more facilities than earlier. IT has provided Tesco with-
Strategic design of network
Tactful planning of resource disbursement
Fast & easy access to information
Better service to customers
Page | 4
Less paperwork
Enhancement of productivity
Development of trackingcustomers' information
Cost effectiveness
Competitive advantage
Thus all these benefits delivered through IT indeed playing the key role for the improvement of
the supply chain of Tesco. So it can be said that the contribution of IT in this sector is beyond
description (Harland, Nassimbeni and Schneller,2013).
3.3: Assess the effectiveness of information technology in managing the supply
chain of an organization.
For every organization, there is a crucial need of effective information flow. So the impact and
importance of effective information that supports the supply chain management is much more
than to be described in words. In present world of globalization, the success of the organization
largely depends on the proper sharing of information across the supply chain (Cousins, Paul,
2008, Strategic Supply Management. Harlow, p334) . In order to design and structure the
genuine supply chain in terms of widgets, variety of information and ERP approach that will help
in solving the logistics, efficacy of IT is a necessity. Besides, it intensifies and magnifies the
performance of the chain which highly improves the capacity of organizations to make decisions
involving the every member of the chain within the network. Thus, it results in reduction of the
stress of the members in the upper positions.
In the UK, Tesco operates four stores and across twelve countries it operates numerous stores.
So, effectiveness of information technology in managing the supply chain is a must. There exists
some effectiveness of IT in case of Tesco, those are mentioned below-
Prosperous E-business structure
Enhanced co-operation of employees
Greater customer satisfaction
Enhancement of efficacy
Development of supporting solution
Concentrated and skillful teamwork
Page | 5
Attainment of strategic benefits
So Tesco has gained various supportive benefits through the use of effective information
technology which have assisted them to enable the supply chain to proliferate the benchmark of
the supply chain management (Cousins, 2008)
Task 4 Understand the role of logistics and procurement in supply chain
management.
4.1: Explain the role of logistics in supply chain management in an
organization.
Logistics are the business activities that transport goods to the customers. It is quite similar to the
supply chain management. This process involves the motion of products from the suppliers to the
customers (Cordon, Carlos, Kim Sundtoft Hald, and Ralf W Seifert, 2012, Strategic Supply
Chain Management, p245). But in between there are so many operations conducted. Without
applying the process of logistics, it is quite impossible to ensure the proper flow of required
materials. So, ultimately commercial activities largely depend on the process of logistics. The
logistic process include a variety of tasks-
Procurement
Warehousing
Transporting
Material handling
Distributing and recycling
In Tesco, the logistic practice is somewhat different from other organizations. Their practice is
based on long term strategy. As mentioned earlier, In the UK, Tesco operates four stores and
they give their equal focus to the every store. With the rapid change in customer preferences and
choices, Tesco expand their logistic procedure. To meet the demand of customers, Tesco is
always concerned. This drives the customers towards the retail stores. Tesco not only sells food,
but also sells household goods, consumer goods and technological products. Tesco has also
improved its logistics process into web based. And it is concerned highly with the E-commerce.
Page | 6
It has modified the different aspects of their traditional logistics. It naturally includes a web
based home delivery service. It results in the greater amount of customer satisfaction.
Task 4.2: Evaluate procurement practices in an organization.
In the present era of business, the most crucial and prime task in any organization is purchasing
or procurement activities. With the progressive competitive stress or effort, there exists a huge
requirement of endowment from procurement and supply chain management activities (Cohen,
Shoshanah, and Joseph Roussel, 2005, Strategic Supply Chain Management, p69). Using
information technology does not imply that everything will be happened in a jiff. So, it needs the
acceptable working technique. In Tesco, the procurement practices are based on the Tesco
procurement policy.
The Tesco employees usually work within their own procurement team. This team buys a great
deal of materials that they need to operate their business. This group is not responsible for
buying the products that they use to sell to their customers. Across the world, in total twelve
countries, they have international procurement team.
The international team procures a huge amount of diversified products. Besides, they also use
measurement tool to rate their products that provide benefits to their customers. These include
solutions regarding IT, car parking, trolleys for shopping, POS etc.
Besides procuring goods, Tesco team also involve themselves in purchasing services. The prime
motto of them is to leave no stone unturned to find out the best way to serve the customers with
greatest customer value. The area of their services include-
Consultancy
Recruitment
Travel
Marketing and advertising
Cash and banking
Security
Cleaning
Couriers and distribution
Page | 7
Thus this is how Tesco manages its procurement practices all over the world to reach their
customers.
Page | 8
Task 4.3: Discuss the factors that must be considered when improving
logistics and procurement practices in an organization.
Logistics & procurement practices are the inseparable part of today's organization. So it is
essential to consider the major factors that are needed to improve logistics & procurement
practices. These factors include-
Transit
Transit cost must be considered while developing logistics strategies. The greater the
functionality in designing logistics strategy the lower the transportation cost.
Index Management
Another important factor is managing the index. The more efficacies are maintained in this
management, the better is the way to improve logistics approach.
Storing
Ensuring the best method of procurement & logistics approach requires the appropriate way of
warehousing. It helps in sustaining the proper amount of goods in the warehouse.
Effectual Placement Processing
It is one of the major requirements to improve logistics practices. The regular flow of order
keeps the daily procurement process healthy.
Vibrant Wrapping
Without a good packaging system, no procurement can be done. In order to provide assurance
for the betterment of organizational logistics method, it is crucial that procurement is done in an
effective manner. And for this sound packaging is must.
Physical Supervision
Material handling is finding solutions to the problems regarding storing, warehousing controlling
& protecting the materials. It is done throughout the entire process of production, distribution &
consumption.
Page | 9
Information System
The last but not the least factor is information system which has the major punch in the
unification of all the sections of the organization.
Conclusion
While the functions and activities of supply chain help in reaching the customers easily, it fosters
building strong relationship with the customers. Use of technology indeed is playing a great role
for the improvement of their activity. This ultimately results in moderating the costs, increment
of profits and expansion of market scopes.
Page | 10
References
Chopra, Sunil, and Peter Meindl. Supply Chain Management. Upper Saddle River, N.J.: Pearson
Prentice Hall, 2007. Print.
Cohen, Shoshanah, and Joseph Roussel. Strategic Supply Chain Management. New York:
McGraw-Hill, 2005. Print.
Cordon, Carlos, Kim Sundtoft Hald, and Ralf W Seifert. Strategic Supply Chain Management.
Abingdon, Oxon: Routledge, 2012. Print.
Cousins, Paul. Strategic Supply Management. Harlow, England: Prentice Hall/Financial Times,
2008. Print.
Harland, Christine, Guido Nassimbeni, and Eugene Stewart Schneller. The SAGE Handbook Of
Strategic Supply Management. London: SAGE, 2013. Print.
Rudzki, Robert A. Straight To The Bottom Line. Ft. Lauderdale: J. Ross Pub., 2006. Print.
Page | 11