Strategic Logistics AssignmentTesco case studyDiscuss the wider role of warehousing and distribution within the overall company strategy, and explain how it has enabled Tesco to become more competitive in the food retail industry.
Warehousing is an important activity in the distribution of raw materials through to the finished goods. It plays an important part in the supply chain within which it operates and its roles and objectives should be determined by the objectives of the supply chain. Warehousing can be costly in terms of people, facilities and equipment as its performances will impact directly on overall supply chain performance. The role of the warehouse and distribution centre is to "facilitate the movement of goods from suppliers out to customers; in order to achieve this effectively they may have to hold stock" (Rushton, 2000).
Tesco has four main methods of warehousing and distribution. These are:1. Regional ambient distribution centres - these are for room temperature products such as dry groceries.
2.Bonded warehouses3.National distribution centres - these are for slower moving and more durable lines such as hardware and textiles. There are also three centres that handle health and beauty lines.
4.Composite distribution centres - there are eight composite centres in the Tesco warehousing network. They are composite because they handle every type of fresh and frozen foods.
In particular, Tesco's composite distribution centres have provided the company with a number of benefits that has made them more competitive than any other supermarket. Firstly, the move of daily deliveries of composite product groups to all stores in waves has provided Tesco with the opportunity to reduce the levels of stock they hold at all their stores, and also to reduce the need for storage facilities at store level. The result of this is seen at store level in the...