The advancement in the field of technology has allowed businesses in performing their business processes in a highly efficient manner in satisfying its customers. The application of technology is evident in respect to all the major business areas of organisation including the management of various processes and functions. There has been rising overall importance of the concept of process technology which implies the use of equipment in transforming the products that creates value to customers. Businesses are making used of highly advanced and sophisticated process technologies in performing the management of their business processes, and this in turn has resulted into the attainment of improved level of efficiency in their operations. Apart from this, the role of technology is also evident in respect to the ways in which business processes are being carried out. As for instance, there has the rise of e-business concept whereby products and services are offered online to the customers. There is significant level of benefits being possible as a result of process technology and e-business as adapted by businesses.
This report is therefore aimed at performing an analysis of the benefits achieved from process technology and e-business by Tesco Plc which has been a retail firm based in UK. The analysis aims at assessing the ways in which process technology is being implemented at Tesco and the benefits as availed by the organisation from its implementation. The effect of such process technology and e-business on the logistical and operational capacity and capability would also be analysed.
Benefits from Process Technology and E-Business at Tesco Plc
This section of analysis is now focused towards performing an analysis of the process technology and e-business as applied by the selected organisation i.e. Tesco Plc. Tesco Plc is a UK based one of the largest retailers that operates across UK and across the globe through its supermarket retail chain stores. The benefits from the consideration of process technology and e-business in the context of Tesco Plc are separately analysed as follows:
Process Technology: As already discussed above, process technology is concerned with the application of technological equipments in the process of creating value to the customers so that the operational processes as carried out within the organisation becomes highly efficient in transforming valuable products to customers. An analysis of the case of Tesco Plc indicates that there are wide range of technological equipments that are installed and they are aim at enhancing the operational performance and ultimately the performance to the customers. As for example, the analysis of Tesco Plc indicates that the company makes use of self service checkout technology in respect to all its operations across the globe. This has been an important process oriented technology that is aimed at enhancing the delivery of services to final consumers. The benefit as achieved by Tesco from its application is improved level of satisfaction within its customers as they are no longer required to wait in queue for longer time period (Tesco Annual Report, 2012).
Apart from this, there has also been the application of RFID technology being performed by Tesco in managing its processes. The application of this technology is aimed at efficiently managing the inventory and this has therefore benefitted Tesco in terms of tracking inventory and making timely decisions in filling up its inventory levels. This ultimately benefits the firm in meeting out its customer requirements on timely basis. This has been process enhancement equipment that is being utilised by Tesco Plc and its role is significant in achieving higher level of effectiveness in maintaining sufficient inventory levels aimed at satisfying the customers by ensuring availability of their requirements. The RFID tags are being attached to the inventory which allows for efficiently tracking the use of inventory in stock and better decisions can become possible (Silwa, 2005).
There are various such applications of process technology equipments at Tesco Plc and they are positively benefitting the entire organisation in terms of efficiently meeting out its customer requirement. As for example, there has been the application of automated data collection software being integrated to the existing business processes of Tesco Plc and its application has resulted into dramatic improvement in the profitability performance of Tesco Plc and it has also allowed the company in proactively meeting out the demands of its customers. Since 2006, Tesco has been making use of its data analytics software in improving its supply chain performance, and this analytics model as integrated into Tesco’s processes has resulted into the attainment of benefits in terms of allowing the organisation in drawing out the weather patterns, and thereby in properly maintaining its stock store shelves. As Tesco becomes a grocery retailer, and the products as offered by it are perishable in nature, their efficient management is ensured by way of such analytics software integrated to its processes (Master, 2013).
E-Business: Apart from the application of various such process technology equipments, an analysis of the case of Tesco Plc indicates that the company also has significant level of web presence. This implies that e-business concept is highly supported by the company in performing its business processes and thereby in meeting out the needs and requirements of its diverse customer groups. Tesco has performed the launch of its online home shopping website tesco.com in 1996, and it has achieved significant level of growth and development in terms of 30% on yearly basis. Tesco offers a range of products and services through its website, and the major benefit that has been possible to the company from considering such e-business mode of doing business is mainly its ability in reaching larger customer groups. This has enhanced the growth potential including the market share of Tesco Plc in a positive way. An analysis of the performance of Tesco.com indicates that the company’s website has contributed positively in generating huge sales, as it accounted for the sale of £1 bn in 2007 (Global Grocery Chain Uses IT Services to Shape Future of Online Retail Market, 2014).
Apart from the above benefit to Tesco in terms of higher growth opportunities, an analysis indicates that this e-business mode of Tesco Plc has allowed the company in making the products and services available at all the time to its customers. This has been an important beneficial factor from the point of view of satisfying its customers, and its contribution is also positive in terms of accomplishing higher growth. The benefit of e-business to Tesco is also identified in respect to managing its operations in a positive manner because it has also added strategically towards managing the organisation’s traditional way of performing business activities. This e-business mode of operations has also necessitated Tesco Plc in focusing towards strategically managing the performance of the entire organisation, as the company became proactive in dealing with all its major areas of operations. The e-business mode involves the delivery of products and services to final consumers in a different way as compared to traditional mode of delivering products and services. There are differences with respect to logistics management, distribution, and final delivery of products to customers. Thus, the consideration of such e-business mode has benefitted Tesco in terms of better managing these aspects in respect to both the offline and online mode of doing business (Tesco Business Model, 2014).
The analysis above indicated that the effect of process technology at Tesco Plc is enhancement in the performance level of the company and better satisfaction of its customers, whereas e-business has contributed positively towards improved organisational performance and also the better accessibility of the company’s offerings to its customers.
Effect on Logistical and Operational Capability
Logistics management is an important organisational function as it is concerned with handling the movement of raw materials from the source to manufacturers and thereafter, the delivery of finished products along the line of supply chain function of the company to ensure that the final distribution to the end consumers is achieved on time. However, the role of process technology and e-business has significant impact over the logistical and operational capability of a company. In respect to Tesco Plc, the effect of such process technology and e-business is significant, and this section of analysis is aimed at analysing such effect on the logistical and operational capability of Tesco Plc (Tesco Receiving My Shopping, 2014).
In terms of impact over the logistics performance of Tesco, the application of process technology has been significant in allowing the organisation in delivering the online orders posted by its customers over internet. The case analysis of Tesco Plc indicates that the company receives millions of orders and they are being despatched at the doorstep of the customers on timely basis. This has been possible mainly because of higher level of effectiveness with respect to the logistics management that have been carried out. The application of various such process technologies contribute in an efficient manner in achieving effectiveness. As for example, the goods that are being ordered are tracked for their availability through the RFID tagging and Tesco pays significant level of attention towards the packaging process especially in respect to online selling.
The advanced technological equipments are used in packaging of products, and they are being delivered to customers through the Customer Delivery Assistant at Tesco Plc. The process technology as integrated to the company’s website allows the customers in tracking their order and its delivery process by logging into their account. The logistical capability of Tesco has enhanced from the application of various major process technologies in the form of RFID, packaging systems etc, as they positively supports the availability of finished products to end consumers, and their ready availability allows in improved logistical capability of the company in delivering them to final consumer. The operational capability has also been enhanced from the application of process technology because it is evaluated that there has been enhancement in the speed at which products and services are delivered to the customers. All these improvements are mainly because of enhancement in the process technology as applied at Tesco (Tesco Receiving My Shopping, 2014).
Apart from the effect of process technology, e-business has also affected the performance of Tesco in relation to its logistical and operational capability. In respect to e-business, the entire business model is different from that of the traditional business model, as customer makes online purchases of their requirements. In brick and mortar store, the customer visits the stores and collects their requirements personally, but in respect to online mode of purchasing, it is assessed that the seller is required to provide the products at the doorstep of customers. This requires an efficient logistics network and an analysis of Tesco indicates that the company has a strong network of supply chain along with its distribution centres across different locations in the world. All these have affected the logistical capabilities of the company in a positive way, as the e-business mode has resulted into the development of such strong networking systems in performing the delivery of products and services to customers. The impact on operational capability from e-business is identified from the fact that strategic decisions are undertaken in managing the operational business, and there has been positive overall contribution of such e-business mode over the ways in which the supermarket stores are being managed (Whiteaker, 2012).
Appropriate Academic Model: The role of process technology and the e-commerce business over logistics and operational management at Tesco Plc can be better assessed through the application of value chain model. As per this model, there are certain primary activities and secondary activities that allow the delivery of finished products to the end consumers. As in respect to Tesco, the inbound logistics is mainly ensured through a sound network of suppliers that supplies necessary requirements to the company, and they are being processed in the form of labelling them, packaging, and warehousing across different distribution centres. The online orders as placed by customer results into their outbound logistics which is ensured by way of customer delivery assistants and the tie ups with various distribution and logistics companies which accounts for delivering the products to the final consumers on time. The support activities in this relation are mainly in terms of process technologies that are being applied and these include RFID tagging system, automated data collection software, strong distribution network and many more. In this way, process technology and e-business influences the overall logistics management across the organisation (Farahani, Rezapour and Kardar, 2011).
A critical assessment of the effect of process technology and e-business has been performed in respect to Tesco Plc. The analysis leads to identification that these aspects have positively contributed towards the ability of Tesco in achieving growth in its performance and also in satisfying its customers in a positive manner. The analysis indicated that Tesco Plc have made the application of large number of technological equipments in its business process and these include RFID, automated data collection software and many more. These aspects have positively enhanced the performance of Tesco Plc in terms of managing its logistics management process and also in enhancing its operational capabilities. This has been assessed through the value chain model which indicates the ways in which these aspects positively affected the logistics management and the operational effectiveness.
Farahani, R.Z., Rezapour, S. and Kardar, L. (2011), ‘Logistics Operations and Management: Concepts and Models’, Elsevier.
Global Grocery Chain Uses IT Services to Shape Future of Online Retail Market, (2014) [Online]. Available at: http://www.microsoft.com/casestudies/Case_Study_Detail.aspx?CaseStudyID=4000011408 [Accessed: 17 November 2014].
Master, N. (2013). Tesco Improves Supply Chain with Big Data, Automated Data Collection [Online]. Available at: http://www.rfgen.com/blog/bid/285148/Tesco-Improves-Supply-Chain-with-Big-Data-Automated-Data-Collection [Accessed: 17 November 2014].
Silwa, C. (2005). Sidebar: Tesco Adopts Measured Approach to RFID [Online]. Available at: http://www.computerworld.com/article/2568550/retail-it/sidebar–tesco-adopts-measured-approach-to-rfid.html [Accessed: 17 November 2014].
Tesco Business Model, (2014) [Online]. Available at: http://www.tescoplc.com/files/reports/ar2012/index.asp?pageid=19 [Accessed: 17 November 2014].
Tesco Annual Report, (2012) [Online]. Available at: http://www.tescoplc.com/files/pdf/reports/tesco_annual_report_2012.pdf [Accessed: 17 November 2014].
Tesco Receiving My Shopping, (2014) [Online]. Available at: http://www.tesco.com.my/eShop/html/help.aspx?ID=2&PID=14 [Accessed: 17 November 2014].
Tesco Service Availability, (2014) [Online]. Available at: http://www.tesco.com.my/eshop/html/Check-Service-Availability.aspx [Accessed: 17 November 2014].
Whiteaker, J. (2012). Tesco creates world’s largest supply chain group [Online]. Available at: http://www.retailgazette.co.uk/articles/40420-tesco-creates-worlds-largest-supply-chain-group [Accessed: 17 November 2014].