The History Of Service Operation Management Business Essay


In business organization, every department has its own significance and role to make it successful. Every department has its own importance and not a single department can be declared as an imperative life of company. it is the joint effort of all the department to make any business successful.

Marketing, Sales, Human Resources, Information Technology, Distribution, research and Development and Customer services are mainly the very important function of any organization especially in this century or era. No one can declare from all of these mention department are sole responsible for the organization or corporate success. Every department has its own responsibilities and unique characteristics which guided the department to make it more vital. However, there is a department which is in coordination with the entire remaining department or studies say that it is a launch pad of the entire above mentions department and that particular department is called as Operation.

No matter, what is the function of the department; there will be a guideline and system available to make it work flow properly. Operation is the backbone of any organization, whichever organization or business we select operations play a very important or vital role to make it efficient and successful. Operations management not just make it efficient but also help in getting smooth workflow and create a link between all the departments of the organization. The success of any business is mainly depends on the process and the strategic planning’s.

Organizations goals must be achieved by the effective and useful operation management. Now, we can easily say that operation management ensures the life of the company and play a very vital role in any organization. This work is done for TESCO operation management mechanism. And in this assignment will discuss the operation management, operation function, management function, performances and strategies used by Tesco, product and service design, planning and controlling, inventory and material management, supply chain management, quality management and project management of TESCO

TESCO Company Overview:

In 1919 Jack Cohen started selling groceries in east London market at stall. After 10 years 1929 he established first Tesco at Burnt Oak, Edgware, North London. And just after 3 year he expands Tesco as private limited company. In 1961 one of the Tesco stores at Leicester declared as Europe largest store. In 1974 Tesco opened his first petrol station. In 1983 Tesco pvt ltd has become Tesco PLC. In 1990, Tesco started expending worldwide. Tesco express was established in 1994 Tesco express known traditional supermarket in residential areas (Tesco History, 2013)

Tesco is operating in more than 12 countries worldwide. It is a leading superstore company in UK more than 6700 stores is in operation worldwide in which different type of items are available for customers such as food, drink clothes, electronics items, insurances, mortgages, home appliances, medicines, and telecommunication services.etc. More than 520,000 employees are working in Tesco worldwide. (Tesco business, 2013)

Operations Management:

Operation management is defining as the effective planning, organizing and control of all the resources and activities necessary to provide the market with tangible goods and services. (Waller, 1999)

Operation activities are vast and apply to manufacturing industries, and services firms, in the private sector as well as to non profit organization and even government

Operation Management has two scope

Company aspect

Customer aspect

Company Aspect

The operation management for the company is to deal with the operation in a cost effective, efficient and in a less costly way.

Customer aspect

Customer aspect is to require a superior quality of the manufactured goods and services.

Now, business operation require to be fulfil not only its own requirement but also the customers demand

OPERATIONS FUNCTION: - "of the organisation concerns with the process of transforming input resources into useful outputs and thereby adding value to some entity; this constitutes the primary and central function of virtually every organisation." (N Slack, S Chambers and R Johnston operation management, 6th Ed)

In simple words, we can say that the purpose of the operations Function is to smooth flow of process to convert input into requiring output, in a cost effective way (Operations_Management)

Tesco operation function is to control the men power, Material, Machines, Capital and information. Transformed them in term of product design, process planning and production control and give output in term of product and services. An example of the transformational model in used in Tesco is given below.


Men Power, Material, Machine, Capital, Information


Product & services

Transformed Process

Product Design, Process Planning, production Control, Maintainance


Inventory, Quality, Cost

The primary aim of the operations management departments challenge to create the required balance between the costs and revenue to get the highest net operational profit, but at the same time to guarantee the quality of the product and service. Operations management includes the performance that are involved in the process of production and distribution of the goods and services

4V’s of Tesco operation






Tesco operations depend on number of product and services. Customer turnover is high in Tesco as compared to the smaller shop because of the price difference as Tesco offers less price. Tesco purchase goods in bulk quantity, buying in bulk means get price discount and reduce the unit cost. Whereas small shops do not buy in bulk and unit cost is increase. Compared with smaller stores, Tesco sales volume is high.


Tesco is dealing with different types of product and services variety. Tesco has defined their standards related to their operation so that they can provide variations in their products with respect to the season. Guide line is provided to all staff members and it is mandatory for the staff to follow that guide lines. Different variety of services is provided to customers such as small size trolleys, customer assistance and billing.


Mainly Tesco is located near the residential areas, and depend mainly on the food and food is essential for everyone. But there may be fluctuation in demand at a time of Muslim Eid, Christmas, Easter and Halloween. So demand of Tesco is predictable, uses of resources are high at economical cost.


Visibility means provide information to the customers. Some operations are visible such as front desk officer, customer assistance, billing the purchased goods and promotions. But some operation are not visible such as supply chain management, Inventory management etc.

Objective of the Operations Management.

The main objective of the operations management is to create a balance between the cost and revenue to achieve the maximum operation profit as well as at the same time provide a good quality of product and services. Operation management involve the activities that are used in the process of production and distribution of goods and services.


A service is the product of the interaction between a provider and a client or the client’s facilities, in order to relieve the client of a problem, or to enable him to resolve it in a satisfactory manner.

In front of Customer, Tesco is known for its "TESCO Price" and its marketing campaigns. Tesco main motive is to provide the good quality product with low prices as possible to make it customer happy and to compete the market. Tesco is providing wide variety of product and services. Which include, fresh fruit, groceries, Tesco direct, Clothing, Tesco Club card, Tesco bank, and Tesco petrol pumps (Tesco Products, 2013).

If we talk about Tesco bank they provide insurance policies, mortgages, credit card, travel insurance and many more. (Tesco Bank, 2013). As well s Tesco club card offers which gives points on every transaction. And after 150 points customer gets a £ 1.50 vouchers. (Tesco Club Card, 2013) Tesco offers clothing for mans, women’s and children’s. Also school uniforms, shoes perfumes & different brand products are also available. (Clothing, 2013)

Tesco has been able to expand all the products available on Tesco are also mentioned in retailer website. On internet mainly all the products are available for the customers. Tesco finance department is also available and it provides insurance policies for cars, homes and personal good and also offers the mortgages and loans.

TESCO offers 5 to 10 percent lower price than the market average. Its means that Tesco offers low price product and it aims to increase the profit by sales volume. This mean Tesco believe to increase customer bank to enhance it sales volume by offering low prices


TESCO involves those activities in which efficient performance i.e. quality, speed, dependability, flexibility and cost can be measured and effectiveness of strategies (Slack et al. (2004) Operation Performance Objective, 2013) i.e. As far as quality is concerned all Tesco provides neat and hygienic environment to its entire customers. Decor is appropriate and attractive. Goods are in excellent condition. Staffs are well-mannered, friendly and cooperative. Tesco aim is to provide the high quality products.

As far as speed is concerned, Tesco is trying to minimize the total time of purchasing in supermarket. All products and goods are immediately available. As far as dependability is concerned Tesco has its expected opening hours. Quantity of goods out of stock kept to a minimum. Keeping to practical queuing times. In Tesco we can find a proper parking. As far as flexibility is concern Tesco aim is to introduce new lines. Variety of stock is available. Tesco has ability to adjust the number of customer served. Tesco has capacity to get out-of-stock items. As far as cost is concerned, Tesco has technology and facilities cost, staff cost and bought in materials and services cost.


In simple word we can say that Product and service design are those methods in which idea is generated by the management or the employees, mostly by the group of designers innovating new products on a regular interval to meet the requirement of customer and satisfying through shaping or configuration of the resources and activity which compose a product or a services or the transformation process that produces the product at any interval of time to meet the needs and demand of a product by the ultimate user.

Product and services is a plate form for an organization to earn repute in society. Tesco has the same story the management and the think tanks of Tesco are always concern with their new products and new concepts to gather a raw material which goes through some screening and purifying process to transform in to a preliminary design. Tesco is one of the specialized chain in innovating the new products according to the demand and needs of the society. Tesco is always focus on introducing a new product in the market, take the feedback from their regular customers and screen their design with respect to their research and feedback from their valuable customers. They apply the changes and improve their products and follow the standards and lastly prototyping and final design is forecasted and processed to challenge the market with the specific features according to the need of customers.


Operation planning and control are the foundation of an organizations growth and development. Planning is related to the prediction and forecast of the future. The process of control is related to keeping an eye on plans. If there is any problem in the process of achieving the planned goal, it is duty of the control department to rectify the problem or to provide the alternate options heading the plans towards achievements.

Tesco is working has adopted a team work strategy to operate the capacity planning control they have appointed two managers in every store one is designated as store managers and the other one is appointed as service manager. They trained their staff and encourage them to be a part of company by offering them save as you earn scheme so that they can buy shares on a discounted price.

In Tesco operation, supply chain is well monitored from beginning till end. In simple words we can say that it is monitored from the distributors, farmer and manufacturer pockets till in the hand of customer. Tesco is working on "steeling Wheel" approach. Steeling wheel approach mainly depends on the safety and efficacy. Tesco is market leader in UK. Tesco supply chain objective is to provide the improved quality products, improved security of products, less wastage, reduce cost and last but not least better the process of Tesco operation. (Supply Chain of Tesco, 2013).



The inventory is a term used for taking an account of the stock which is available in form of raw material or end products or the goods in production process.

Inventory Management System

The inventory management system is responsible for monitoring the stocks available and, quantity of stock, forecasting the demand of stock. The management take their decisions On the basis of these results the management estimate the future orders of stock either it should be large or small.

Inventory is very expensive business especially where the goods are of high value, however even small items can be of high value if the quantity is large. Tesco is using JIT policy where the stock is delivered just as it needed. Tesco has developed a strong relationship with their suppliers and maintained a tight control on their stock. Tesco is using all the computerized system for their stock management and the main advantage of this new system is that it ensures the staff to do more productive jobs. Another advantage of this system is that the Tesco management get the better information’s related to the stock available and the products available from the suppliers


"Supply chain management is concerned with managing the flow of materials and information between the operations which form the strands of 'chains' of a supply network" (Slack et al., 2004). The main objective of the supply chain management is to satisfy the demands of the customer in proper way.

The supply chain system of Tesco is responsible for monitoring the process of product delivery from beginning till end. To follow the proper standards, this department keeps a close look on all process going on the figure above is the proper description of supply chain management of Tesco.


"Quality planning and control seeks to deliver products and services at their required specification or above it" (Slack et al.2004). The procedure views quality is constant conformance to customer's hope. Quality is very important quality aspect (Slack et al., 2004).

Quality of the Tesco product is very high. Tesco provide full guidelines to their supplier about quality. And ask suppliers to provide a guarantee and make sure that all the products are manufactured in high quality, safety and environmental hygiene standards. Health concern is very important for Tesco operations i.e. products are developed according to the quality standards. Tesco first choice is to provide the quality products to its customers. And also some products are manufactured from only legally allowed sources. (Tesco Plc,2005).


"A project is a set of activities with a defined and elaborated start point and the end point or states which pursues a defined goal with a define uses of set of resources".

Project managements is the department which coordinates the effort of many people in different part of the organization. The people working in the project team need a clear understanding of their roles, goals, objective and the final products. To deliver this clear understanding and follow up the completing stages of the project are the major responsibilities of project management.

Project Management Model

The project environment consists of all the factors which may have the direct or indirect impact on the project during its life. The study of the project environment is the foundation of any project because it includes all geographical environmental, economical, legal, cultural and industrial aspects which have direct impact on the project

It is the study of project from the start to the finished product. It gives all the details related to the objective of the project the future scope of the project and the strategy that how the project management is going to meets its objective

It determines the cost, quality and the duration of the product. It is most important stage for ever project because it enables measure decision to be made such as whether to go ahead with project or not.

It gives all the details related to the techniques, methods and technology to be used by the technical staff for the execution of the project.

The project planning and control is the most important stage of any project. This deals with management activities which take place during the execution of the project. It is the essential link of planning and doing for instance there is any sort of problem in execution this stage will give it feedback to the execution team to reconsider their methods.

The project management department of Tesco is consider to be one of the most reliable and successful department in the organization. This department has done a proper research for the sake of development and enhancement of Tesco in near future. Tesco is a well known brand the project management played their remarkable role in completing the various project of Tesco locally and internationally


Operation strategy of Tesco is long term goal. Operational strategy is very important for Tesco because Tesco offers types of services and goods to establish its target market and how Tesco compete its competitors. Tesco prepared superior control and planning in its capacity, quality and supply chain. Also Tesco measures quality, speed, dependability, flexibility and cost.

Tesco is the fastest growing supermarket in UK and it has change the overall retail industry, Cost and flexibility is the two main winning factors for Tesco operation. The two main factors that played a vital role in Tesco victory over the other supermarkets in UK are Cost & Flexibility. Tesco has maintained their cost and divided in such an efficient way that around 60% of Tesco costs are the cost of purchasing the material and services. This figure shows that the emphasis of Tesco is on their product and services. Tesco aimed is to be better than their competitors in the area for this Tesco offers a wide range of goods and services. It shows their flexibility as compare to the other competitors in the market. Tesco is using the new technologies which have revolutionized the Tesco’s operations.

In past few years Tesco made some improvement but still there is plenty of space to cover as per operations. There are some draw backs of capacity planning and control like they keep output on one level which shows that the number of staff available all the time remains same resulting the same sloe output but in weekends where the more people come for shopping the Tesco management should increase the staff rather than letting the customers waiting in a long queue. Tesco has wide of operation and wants everyone to buy their products and they provide some benefits in form of club card to gain the loyalty of their customers.