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.
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 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 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:
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
. 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.
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.
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