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Tesco Supply Chain Innovation and Lean Six Sigma Implementation

Jul 19, 2024

Tesco Supply Chain Innovation and Lean Six Sigma Implementation

Introduction

  • Tesco's goal: Stay ahead of competition by improving the supply chain

Key Strategies

  1. Implement a Common Operating Model
  • Leverage Tesco's accumulated expertise globally
  1. Innovate for Efficiency
  • Lean Six Sigma as a tool for innovation
    • Encourages imagination and creativity

Lean Six Sigma Training and Applications

  • Provides a toolkit for innovation, analysis, and developing better workflows
  • Video case study: How colleagues applied lean six sigma in real projects

Example Projects

Project 1: Goods and Services Not for Resale

  • Objective: Make budget savings on cleaning, security, and consumables
  • Tools Used: Kaizen workshops, identifying business process waste
  • Key Steps:
    • Structured approach to process improvements
    • Inclusion of stakeholders (customer assistance, buyers, store managers, operations directors)
    • Focus on eliminating non-value-added activities (e.g., £3 million spent on trolley removal)
    • Solutions: Retention systems (magnetic wheel locks, bollards)

Project 2: None Out the Back

  • Focus: Inventory levels and stockholding
  • Issues Identified:
    • Un-shelved stock
    • Incorrect stock records
    • Inaccurate shelf capacity in ordering system
  • Results:
    • Reduced stockholding
    • Multi-million pound savings
    • Increased productivity
    • Improved customer product availability
    • Positive staff response

Project 3: World Palette Project

  • Origin: Feedback from store staff
  • Method: Value stream mapping
  • Collaboration with suppliers and customers
  • Features: Dual-purpose (pallet and dolly) for supply chain efficiency

Project 4: Trains from Spain

  • Objectives: Speed, quality, and cost
  • Changes: Shift from trucks to trains for transporting oranges
  • Lean Six Sigma results: Lead time reduction from 5 to 4 days
  • Outcome: Fresher produce, smaller carbon footprint

Project 5: Hard Lines Process Improvement

  • Objectives: Reduce back stock, improve availability, simplify processes
  • Methodology: Detailed process mapping and cross-functional workshops
  • Implementation: New workflows to be rolled out across all stores
  • Results: Common language and better project delivery

Conclusion

  • Importance of Lean Six Sigma training for developing future leaders
  • Emphasis on creativity and maintaining focus on efficiency
  • Tesco's commitment to providing tools for continuous improvement

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