Business at work

p>STRONG INTERNATIONAL PERFORMANCE
In 2000 Tesco opened 32 stores internationally adding over 3m sq. ft. of new trading space. This represents an increase in International trading space of over 45% on the previous year. International sales were up 50% over the Christmas and New Year period as a result of existing stores maturing and new store openings.

RECORD NON FOOD PERFORMANCE
Company’s strategy of offering excellent value in non-food to customers was a resounding success this Christmas. Tesco achieved sales in all areas including 14,000 DVD players and 8,000 widescreen televisions.

TESCO.COM SALES QUADRUPLE
The roll-out of Tesco.com to cover 90% of the UK population helped drive the performance over Christmas with sales up 400% on last year. To meet this demand Tesco.com recruited 400 new staff, allocated 10,000 additional delivery slots and delivered 30m products.

Some examples of meeting its objectives by Tesco plc.
Product promotions
Objective: to give customers a broad range of strong relevant promotions in all departments of the store.
Examples: hundreds of MultiSave, Link Save and Special Offer promotions in all stores every month.
Product range
Objective: to give customers what they want under one roof.
Examples: constant development of new and exciting food products; introduction of clothing, CDs and videos.
Pricing
Objective: to be competitive especially with regard to the basic lines.
Examples: Value Lines and Unbeatable Value pricing, giving low prices on key brands and own-brand products.
Customer Service
Objective: to provide customers with outstanding, naturally delivered personal service.
Examples: baby changing facilities, no quibble money back guarantee, "one in front" queuing policy.
Store design
Objective: to provide an environment that is easy and pleasant to shop in.
Example: store layouts, fixtures and ambience improved to ease customer flow and make shopping more enjoyable.
Store refurbishment
Objective: to upgrade existing stores to the standard that is expected from
Tesco.
Example: existing stores improved to include recent innovations.
Communications
Objective: advertising should appeal to all social and economic groups in a relevant and friendly way. Example: recent television ads.
C2

How the organisational structure, culture and management style of the business affects its performance and operation and helps it to meet its objectives?

I have analysed each of the major functions of Tesco separately. However, it is the effective interaction of business functions that is essential to the success of an organisation in attaining its objectives.

Marketing

Advertising.
Tesco uses advertising in the press, on the radio as well as on television to support the company’s marketing by making the public aware of the products and services available in its stores.

The Tesco logo.
The Tesco logo is a vital part of its image. By 1995 many versions of the logo had evolved and company’s corporate identity was not focused. Company therefore began to use one single Tesco logo that is the same everywhere, on stores, letterheads, posters, lorries....
The new logo has the company name in red, the underlining in blue and the background white. However, given the cost of this change Tesco did not immediately change every logo for the sake of it, but gradually as old items were replaced, repaired, repainted, reprinted or re-designed. This means that it is taking about three years for the new logo to completely supersede all other versions.

Chef’s Club.
The Chefs' Club is an initiative which brings the best advice on food and drink to customers and aims to make shopping more enjoyable. Tesco is working with some of the country's top chefs and other experts who want to share their passion for good food and drink with customers.

Tesco Packaging Design.
Tesco has many "Own Brand" products, and in order to promote its own brand correctly Tesco has its own Packaging Design Department. Products sell for a variety of reasons; in the first instance, the visual appeal of a product is important to attract customers to the product initially, as it is only after the first purchase that the customer is attracted because of the quality of the product and its value for money.

Tesco Product Promotion.
Product promotion is the responsibility of the Tesco public relations team. The team is always involved at the planning stage of any new product or service, and its brief is to generate extensive and appropriate coverage for the new product.Tesco has three key objectives for any product promotion; these are:

. to reinforce the Tesco brand values of quality, choice, price and service

. to maintain the Tesco image as a market leader through its products and services

. to manage product issues - both positive and negative.

Distribution

Purpose of the distribution department

Its purpose is to ensure that Tesco stores have the right products delivered against agreed delivery schedules and in good condition, enabling the stores to provide a consistently high level of customer service.

Tesco products are sent to stores from distribution centres around the country. Tesco runs 13 centres and a further six centres are run for Tesco by contractors. A typical centre covers 300,000 square feet and handles some 50 million units a year. The centres work around the clock, seven days a week, providing 2,500 deliveries daily, amounting to 19 million cases per week. Tesco employs 6,800 people in distribution (excluding the staff at the contractor-run centres), and has about 1,000 tractor units and 2,000 trailers in its national vehicle fleet.

How does Tesco keep each store supplied with what it needs?
The key to the distribution system’s ability to supply each store’s needs are the advanced use of IT at all stages of the distribution system.
Information from stores about their sales and requirements is sent to Tesco
Head Office and from there to the distribution centres. The centres run a computer system that has been specially designed to fit with Tesco working practices and to maximise efficiency).

How does Tesco achieve maximum efficiency in its distribution centres?
Computerised information arrives via printers in the warehouse offices. The system feeds this information directly to the staff on the warehouse floor via radio links mounted on the fork-lift trucks. The system helps to control the movement of stock and the activity of staff. Thus when a person has finished a particular job, the computer decides which would be the most efficient job to allocate next to that person, based on his or her current position in the warehouse.
Also, in the past, Tesco’s operations have been slowed down at peak times by the need for product identification and purchase-order matching. Now each goods-in checker is equipped with a scan gun which can scan the outer case code of each product and radio the information back to the Head Office computer, which matches a delivery with its purchase order in an instant.
As well as easing bottlenecks, this system enforces accurate outer case coding, which Tesco believes to be essential to future developments in its distribution system.

Human Resources

People are fundamental to business and the way company recruit, develop and reward people is the key to success. Human Resourcing in Tesco is therefore influential, leading edge and proactive to ensure continued success.
Human Resources at Tesco is divided into a number of central areas which focus on the design and research of Tesco HR policies and a number of front line HR professionals that work in partnership with company’s Line Managers to deliver the business plan.

Promote management development
Tesco does this by providing opportunities for everyone to increase their learning, thus enabling Tesco to thrive in a constantly changing and competitive market place. Tesco does this by: designing training packages which equip people with the knowledge, skills and experience needed to reach high standards of performance, and equipping trainers to coach others thus maintaining excellent quality standards. enabling training to be delivered in the workplace by people who know how to do the job themselves. exploiting new methods of learning, and thereby providing a supply of general business managers for the future. developing effective working relationships with colleagues and suppliers through listening and challenging, and designing products which inspire them.

Research and development of effective corporate human resource policies
Tesco does this by: being constantly aware of UK and European employment legislation, and translating it into policy that maintains a balance between cost effectiveness, fairness, developing relationships with people, and company’s business aims. researching and developing people involvement strategies; this involves analysing staff research, which includes both large-scale corporate surveys and specialist staff research. providing updates on employment law. scanning and benchmarking other organisations, in order to import best practice and maintain a competitive stance. ensuring specific policies, for example regarding the employment of disabled people and equal opportunities. achieving external recognition, to ensure that Tesco is seen as a quality employer.

Developing selection standards and implement corporate entry programmes
Two crucial roles for the Human Resources Department are: developing selection standards which will enable managers to select the best people who will continually increase value for customers. implementing corporate programmes in order to ensure that the company's manpower requirements are met.
Tesco does this by: designing recruitment and selection processes which will equip managers with the skill and knowledge to select the best. training managers to maintain selection standards, and to select using the most reliable and leading-edge processes. developing corporate competency frameworks which enable managers to select the right people, who have the skills the business will need in the future.

developing corporate entry programmes to ensure that corporate manpower needs are met in terms of skills and numbers. developing and implementing Tesco employment branding and marketing strategy in order to ensure that Tesco is seen as a quality employer which attracts the highest calibre candidates. developing a pool of Excel graduates providing a supply of managers with broad business experience. developing at a national level links with leading education/industry establishments, and planning initiatives whereby managers can develop links with education at a local level.

Reward Development
Reward Development researches and develops rewards and organisational design strategy which enable Tesco to recruit, motivate and retain the best. Tesco does this by: sourcing and analysing pay and benefits data to enable Tesco to keep remuneration and benefits packages competitive. continually shaping innovative ways of rewarding staff, thereby enhancing the value of the reward package and increasing staff retention and stakeholding. developing performance management processes and tools which will improve performance and encourage motivation in staff providing advice and if necessary challenging organisational design, thereby ensuring a maximum return on corporate reward spend and creating organisational structures which will deliver business goals.

HR professionals
HR professionals operate out of the Line, working as part of the senior management team in order to influence and implement HR strategy. They work closely with the central HR departments and line managers to deliver key aspects of company’s business plan:
Develop the best
Recruit the best
Retain loyal and committed people
Live the values of the company
Transfer HR skills effectively to the line.

Hence these functions help meet the objectives successfully. All Tesco’s organisation structure works as links of a chain, if one link falls down, all the organisation will experience difficulty. For example, most important department of Tesco, I consider, is Distribution department. If this department fails, products will not be delivered to the store, so customers will go to another store. Tesco’s success is built on the good work of each department.
As an example, Tesco has recently introduced Customer-Oriented
Initiatives, such as:

Loyalty cards

Clubcard was test-launched in October 1993 and was rolled out nationally in February 1995. Clubcard has transformed the retail grocery sector and has brought Tesco closer to its customer. At the heart of the programme is one of the most sophisticated customer databases in Europe.

Clubcard is a magnetic "swipe" card obtained free in store. The checkout assistant swipes the card prior to scanning the customers shopping. For every Ј1 spent, one point is earned. Each point is worth 1p. When shopping at the originating store, the till receipt advises:

. Points earned from that shopping trip

. Points accumulated during the quarter.

The points earned are recorded on a central computer and are converted into money-off vouchers every quarter.
Customers can earn Clubcard points at:

. Tesco stores

. Tesco petrol stations

. B&Q

. Energi - through Norweb

. Tesco Personal Finance

. Tesco Home Shopping.
In addition Clubcard has recently been extended to Ireland and to the Tesco
Vin Plus store near Calais.
Home shopping

Many people today, both single people and couples, are working longer hours and do not want to spend part of their leisure time making a trip to the local supermarket. To help people save time on shopping, Tesco has introduced Home Shopping, a service which makes use of information technology so that people can do their shopping via the Internet from their home computer. This was first introduced on CD-ROM in July 1996, and Tesco followed this up by becoming the first UK food retailer to offer an Internet-based home shopping service in November 1996.
Personal Finance

In 1997, Tesco decided to extend its customer offer to include personal financial services. In partnership with the Royal Bank of Scotland, Tesco is providing new ways of banking and other services to its customers.

C 3.

The impact of ICT on internal and external communications

Importance of ICT

IT is vital to Tesco because every aspect of its operation is controlled or monitored by IT - stock, distribution, payroll, accounts, and so on. For example, when an item has its barcode read at the checkout, the system not only logs the price onto the till, but also logs the financial transaction between Tesco and the customer and the fact that the stock has been reduced by one item. On the distribution side, instructions from the mainframe computer are sent directly to fork-lift truck operators at depots by radio links.
All stores are connected to the mainframes at Head Office via the Tesco
Network. There are a large number of different applications that stores use both independently and via the mainframe connection. For example there are
Personnel and Scheduling systems in-store, and access to electronic mail via the mainframe.

IT capacity
Tesco has a three-level architecture with mainframe, middle system servers and PC clients. Their main frame has a 6 million Mb storage capacity
(equivalent to 6 million 500-page books!). Their private digital network to
600 stores has a capacity of 11.5 Mb. They use some 100 Tesco-written computer applications and over 200 PC packages.

How much does Tesco spend on IT each year?
Last year, Tesco spent about Ј133 million on IT, that is about 1.4% of turnover.

How does that compare with other companies?
A recent independent survey of Europe's leading 500 companies in all commercial and industrial sectors placed Tesco 112th overall in Europe in terms of IT spending, but 3rd in the list of European supermarkets, and 1st amongst British supermarkets. [Source: Information Week 19-20/12/97].

How many on-line card authorisation requests does Tesco receive each day?
Over one million on-line card authorisation requests are dealt with every day.

Internet site
The Internet site receives 250,000 hits per week and was used to launch
Tesco’s home shopping service and the Tesconet Inertrnet Service provider.
The internet site has proved to be a great success, with the introduction of Tesco Direct, the home ordering and delivery service. Such “home shopping” is becoming increasingly important as more and more customers gain access to the internet via home PCs. Sainsbury’s, one of Tesco’s great rivals, has also now launched its own home delivery service via the internet.

[pic]

Tesco own Internet site. Home page.

ICT systems used by Distribution Department
IT has revolutionised all aspects of the selling, ordering, distribution and analysis of Tesco products. The operation of Tesco large distribution centres is a highly complex business. In recent years new computer systems have revolutionised distribution operations, allowing more effective stock control procedures, increasing productivity and making the best use of time, space and labour.
The base system used to control the distribution operation was purchased from Dallas Systems and customised to Tesco requirements. There are two particularly important sub-systems, known by the acronyms DCOTA and DCAMS.
DCOTA (Distribution Centre On-board Terminal Access) is a system which sends information by radio directly to the special terminals in the trucks of the fork-lift truck drivers at the distribution centres. The system controls the movement of stock and trucks in order to make the most efficient use of time and space, automatically matching up locations and trucks. As soon as one assignment is finished, the next brief will be transmitted to the truck-mounted terminal, showing the driver where to go next. Every warehouse location has a check number prominently displayed on the racks; this number is entered by the driver each time he visits a location, enabling the computer to check that each pallet has been placed in the correct slot.
DCAMS (Distribution Centre Assignment Monitoring System) is the system that monitors how far each job has progressed, and the deployment of staff. It is available to supervisory staff via hand-held radio frequency terminals, enabling them to predict and pre-empt problems by re-deploying staff and, if necessary, changing work priorities.
Radio frequency communications are also used in the checking in of goods.

Ordering by stores now relies heavily on IT, using Sales Based Ordering.
Data is received by the distribution centre from the Head Office mainframe system, and then passed to the warehouse systems described above.

These mainframe computers are among the largest in Britain. The mainframes are either IBM or compatible (Amdahl), running IBM operating systems. There are mainframes situated in two separate locations.

The loss of a whole mainframe would have serious effects, and for this reason company has two mainframes to provide backup capacity. In the event of a disaster which involved the complete destruction of one of the computer centres, the other could re-establish these vital systems within
48 hours. The backup procedure is tested regularly each year.
The backup systems for the distribution depots include specialist routines that allow depots to switch between computer sites, and are at the leading edge of data processing technology. If a complete computer centre were lost, IT communication with all affected depots would be re-established within six hours at the most.
Goods are now ordered from suppliers using a system called Electronic Data

Interchange (EDI). Orders for goods are transferred to the suppliers electronically using a service called INS-TRADANET. The use of EDI keeps suppliers precisely informed of Tesco requirements for company’s stores. It allows Tesco to run the business more effectively and efficiently because of its speed and accuracy. It is both quicker and more cost-effective than telephone, post or fax, and eliminates errors due to loss, or to wrongly printed orders.
EDI is also used for: sending sales forecasts so that suppliers can anticipate demand and reduce lead-times for stock to reach the stores securing the best payment terms and discounts for Tesco simplifying the invoicing process, so that invoices are generated automatically and postage and paperwork are eliminated working internationally, to eliminate time and language differences.

ICT systems used in Management.
Management Information is data stored electronically for use by business executives at all levels to support their decision making. This type of information is typically historical, and needs human interpretation before a decision is made. Tesco is planning to introduce a new system, called
Data Warehouse, which will give much greater analysis and flexibility, and will further enhance the ability of managers to make informed decisions.

The sections below describe Tesco’s current Management Information environment, and the planned Data Warehouse, broken down into four topics:
Business use, Technology, Data and Analytical tools.

A) Business use
Current Management Information
Access to summarised data at pre-defined levels
Most decisions made at a macro (e.g. regional level)
Planned Data Warehouse
Access to in-depth information for informed decisions
Decision made at micro level, e.g. in store
Use of balanced score carding for suppliers, stores, etc. with supporting details
Use shopper behaviour to influence new lines, promotions, and product ranging.

B) Technology
Current Management Information
Mainframe, text-based reporting and analysis
Downloaded to local PCs for in-depth analysis and graphics

Planned Data Warehouse
Specialised hardware and software to manage data (the 'Information
Warehouse')
Information from the Information Warehouse to be accessible from anywhere within Tesco and available also to designated outside users, e.g. suppliers, agencies
Cost of computer hardware and software is "scaleable", i.e. Tesco can add processing power and storage capacity at reasonable cost and in manageable chunks to keep pace with the information needs
Dedicated NCR machine and peripherals.

Страницы: 1, 2, 3, 4, 5, 6, 7