Lean Manufacturing and Supply Chain
1.0 INTRODUCTION:
From humble beginnings, Tesco has grown to become the UK's largest supermarket chain. Over ten years ago, Tesco set its sights on becoming the Toyota of the grocery business. Since then the company has become renowned for its best practices in supply chain management (SCM), which included lean management and the use of RFID technology. The company has got an advantage over its competitors by incorporating innovation in its supply chain like point of the sale data, continued replenishment triggered by customer demand, primary distribution, cross dock distribution centre and use of single vehicle to serve several stores.
2.0. Background
Tesco was founded in 1910 by Jack Cohen, who invested his serviceman's gratuity of £30 in a grocery stall. The first private label product introduced by Cohen was Tesco Tea. The name Tesco was a combination of the initials of the tea supplier - TE Stock well and the first two letters of Cohen's name.
Tesco opened its first store in 1929. Cohen was influenced by the supermarket culture in America and tried to introduce the concept in the UK. The company's driving force was the idea: 'Pile it high and sell it cheap.' In 1947, Tesco went public and a year later, Tesco self-service stores were started. In 1956, the first Tesco self-service supermarket was opened.
In the 1960s, Tesco went on an expansion spree and acquired several store chains. The Retail Price Maintenance (RPM) Act8 in Britain prohibited large retailers from pricing goods below a price agreed upon by the suppliers.
To overcome this obstacle to price reduction, Tesco introduced trading stamps which were given to customers when they purchased products; they could be traded for cash or other gifts. RPM was abolished in 1964, and from then on, Tesco was able to offer competitively priced products to its customers. The first Tesco superstore, with an area of 90,000 square feet, was opened in 1967.
By the 1970s, Tesco's 'Pile it high, sell it cheap'
From humble beginnings, Tesco has grown to become the UK's largest supermarket chain. Over ten years ago, Tesco set its sights on becoming the Toyota of the grocery business. Since then the company has become renowned for its best practices in supply chain management (SCM), which included lean management and the use of RFID technology. The company has got an advantage over its competitors by incorporating innovation in its supply chain like point of the sale data, continued replenishment triggered by customer demand, primary distribution, cross dock distribution centre and use of single vehicle to serve several stores.
2.0. Background
Tesco was founded in 1910 by Jack Cohen, who invested his serviceman's gratuity of £30 in a grocery stall. The first private label product introduced by Cohen was Tesco Tea. The name Tesco was a combination of the initials of the tea supplier - TE Stock well and the first two letters of Cohen's name.
Tesco opened its first store in 1929. Cohen was influenced by the supermarket culture in America and tried to introduce the concept in the UK. The company's driving force was the idea: 'Pile it high and sell it cheap.' In 1947, Tesco went public and a year later, Tesco self-service stores were started. In 1956, the first Tesco self-service supermarket was opened.
In the 1960s, Tesco went on an expansion spree and acquired several store chains. The Retail Price Maintenance (RPM) Act8 in Britain prohibited large retailers from pricing goods below a price agreed upon by the suppliers.
To overcome this obstacle to price reduction, Tesco introduced trading stamps which were given to customers when they purchased products; they could be traded for cash or other gifts. RPM was abolished in 1964, and from then on, Tesco was able to offer competitively priced products to its customers. The first Tesco superstore, with an area of 90,000 square feet, was opened in 1967.
By the 1970s, Tesco's 'Pile it high, sell it cheap'