Tesco Value Chain

1525 Words 7 Pages
According to Chaffey (2002) Value Chain is a model that considers how supply chain activities can add more value to products and services delivered to customers Inbound logistic:
This activity refers to the relationship with suppliers and all activities related to receive, storage, transport and deliverof inputs into business (Ingram n.d.). The main logistic tasks of Tesco is receiving receipt from suppliers, storing inventories, handling and transporting goods internally in the business. To increase its efficiency, Tesco has started finding a way to decrease the cost of manufacturer’s inbound supply chain (Pendrous 2007). They have tried to improve the efficiency in their process by creating collaboration in its supply chain (Tesco Information
…show more content…
The reason is because EDI is one-way collaboration, so if Tesco wants to make an order, the company just can base on all information from the supplier’s website and no more (Prenhalln.d). Moreover, EDI has too many standards but standards could change every year. This causes the difficulty for business partners if Tesco has newer version of standards compared to the partners since their standards are too obsolete to receive information from Tesco. (ED, …show more content…
Firstly, according to Nairn 2000,Tesco asks suppliers to pay the fee of joining Tesco’s information exchange (Tie), a kind of IBP with the amount from £100 to £100,000 depending on the company’s size. By using Tie, suppliers can review electronic point of sale (Pos) every day and monitor their demands in real time. Therefore, suppliers will have more time to manage products (cut or add more inventories) to suitable with the point while using EDI, they just know the problems when Tesco call to them, and so it may be too late to make the change for the product line. Secondly, the cooperation between retailers and suppliers become more effectively since they can collaborate all stages of promotion (including initial commercial and supply chain planning, execution and final evaluation) using the promotions management module. Because all stages are discussed and prepared by suppliers and retailers, Tesco do not need to pay amount of product promotions and as a result, 30% of annual promotion cost is saved (Tesco

Related Documents