Tesco

"Customer focus and commitment to value has propelled Tesco into a leadership position developing a dynamic 'virtuous circle' comprising scale, efficiency and innovation within the supply chain." 1

- Stuart Ross, Director, Supply Chain & Distribution, Tesco, 2005.

"Tesco, the UK-based grocer, is an example of a success story. They have learned how to go beyond Wal-Mart. They came to Dan Jones ten years ago and asked, "How would Toyota run a grocery business?" And they've been working hard to become the Toyota of the grocery business ever since."2

- James Womack, Co-Author, The Machine that Changed the World, and Lean Thinking, 2005.

In December 2005, AMR Research (AMR)3 announced the 'Second Annual Supply Chain Top 25' - a list of leading companies that had employed demand driven supply chain practices and technologies successfully. UK based retailing giant Tesco was ranked 9th in the list, preceded by Dell, P&G, IBM, Nokia, Toyota Motors, Johnson & Johnson, Samsung Electronics and Wal-Mart.

AMR's report ranked the companies based on past performance and future potential on the basis of their supply chain management (SCM) capabilities. The return on assets and inventory turns were given weightage of 25% each and 10% was for growth in sales in the previous 12 months.

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The remaining weightage of 40% was given to the opinion of AMR Research, based on a structured voting methodology across AMR's team of analysts. Commenting on Tesco's achievements, analysts at AMR commented, "The UK based grocer was the first to really succeed with direct to consumer sales, while maintaining killer inventory turns and growth."4 (Refer Exhibit I for details of top ten companies in 'Supply Chain Top 25').

Tesco is renowned for its best practices in SCM, which included lean management and using RFID technology. The company has gained and maintained advantage over its competitors by incorporating innovations in its...