The Lean Supply Chain

Managing the Challenge at Tesco

Barry Evans, Robert Mason

• Publisher: Kogan Page
• Year: 2018
• ISBN:
  9780749482077
• Edition: 2
• Topic: Betriebswirtschaft
• Subtopic: Supply-Chain-Management

WINNER: Les Plumes des Achats 2016 - Prix des Associations (1st edition)Over the last two decades Tesco has emerged as a dominant player in the UK market and a leading global retailer. The Lean Supply Chain explores how Tesco, over the last 20 years or so, has built its business around supply chain excellence. As a mega-retailer, Tesco has learnt to create a balanced supply chain system, supporting suppliers' needs as well as customers' requirements. This perspective, and an ambition to act sustainably, has underpinned a rebuilding of trust in the Tesco brand and a resurgence in commercial fortunes. This fully updated edition of The Lean Supply Chain contains new chapters on Tesco's current strategy, rebuilding brand trust and its CSR agenda. It charts the principles of lean thinking, customer loyalty and simplicity which were used by Tesco to frame its supply chain strategy and draws upon the authors' deep knowledge of how the retailer has dealt with challenges and market changes to provide lessons for other businesses, large or small, who wish to place how they manage their supply chains at the heart of their competitive strategy.

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Tesco’s CSR agenda

Introduction

At one time, organizations focused on commercial aspects of their business as measures of success – sales, profit, market share and other financial indicators. Over time, and in response to societal change, organizations have realized – either in reaction to consumer demand, or proactively in anticipation of changing consumer desires – that wider measures of success are needed to respond to these changing desires. So, we have seen the emergence of consumer interest and belief in a range of societal and environmental themes and demands. At the extreme there is now even commentary that ‘competition is not sustainable’ in relation to the growing scarcity of natural and mined resources (Johnson, 2008). Johnson argues that we must consider the needs of future generations and give a ‘voice’ to them rather than feel entitled to take all the scarce resource for ourselves. The ‘Doc’ Hall Compression Institute argues that the developed west must learn how to consume half the resource we currently consume if the developing world is to have access to these resources as well. If we do not, then they will rapidly deplete and disappear (Compression Institute, 2011).

This chapter examines the development of corporate social responsibility (CSR) in business and how Tesco has recognized and developed CSR to the extent that it now merits its own time cycle and presentation, separated from Tesco annual business and financial reporting.

In summary, our purpose is to help the reader – if unfamiliar with CSR as a concept and Tesco’s adoption of CSR – to understand:

• the CSR agenda as it has developed into general use; and,
• Tesco’s adoption of CSR as a non-financial business driver, and its potential as a proactive business builder.

The evolution of CSR

It is not our intention to provide a detailed analysis of why and how CSR came to be such a prominent feature of today’s business landscape. There are many excellent books and journal articles that do this comprehensively, including Carroll (1999, 2008), Dahlsrud (2008), Drucker (1984), Melo and Garrido-Mercado (2012) and Schwarz and Carroll (2003).

CSR can be traced back to pre-Second World War origins. Drucker (1984) mentions two American radical innovators who wrote on the topic in the 1940s:

• Carnegie, who said that ‘the sole purpose of being rich is to be a philanthropist’; and,
• Rosenwald, who believed that ‘you have to be able to do good to do well’. At the time Rosenwald, a firm advocate of the US county farm agent system and infant 4-H clubs, had just purchased a near-bankrupt mail order company – Sears Roebuck!

The articles by Carroll (1999 and 2008) and Schwarz and Carroll (2003) provide a wealth of detail on the history, development and uptake of CSR. Carroll (1999), in his opening paragraphs, refers to Barnard’s The Functions of the Executive (1938), Clark’s Social Control of Business (1939) and Kreps’ Measurement of the Social Performance of Business (1940). Schwarz and Carroll (2003) reproduce Carroll’s 1991 ‘pyramid of corporate social responsibility’. We have reproduced it here in table format – we will use it later as the basis to demonstrate how Tesco has developed its CSR agenda against this as a benchmark.

The terminology ‘...