Dedicated NCR machine and peripherals.
C) Data
Over 10 million customers, over 60,000 products and 586 stores
Current Management Information
Data held on mainframe, PC or on paper
Internal data analysed using SAR reports and MAS analysis tool (see below)
External data received by EDI or on paper
Planned Data Warehouse
Data collected from Tesco operational systems and external sources, and
stored centrally to provide one consistent source of information
Data is stored on customer behaviour, product performance, branch
performance supplier performance, depot performance
Data held at lowest level to enable ad hoc groupings,
e.g. salt sales in stores by the seaside last Easter.
D) Analytical tools
Current Management Information
Mainframe based
FOCUS - report generator
SAR - report viewer
MAS - Tesco-written multi-dimensional analysis tool
PC Lotus suite - spreadsheet and database applications
Planned Data Warehouse
A simple interface with the information using the score card concept, with
top level measures and capability to "drill" to the level of information
required to support decisions
IT populate the Information Warehouse and users control their reporting
requirements
Logical access to information, with user choice of level, groupings,
stores, products, measures, and other parameters
ICT systems used in store operations.
IT is essential to the running of a modern store. It is used for planning,
monitoring and auditing store operations. In fact, the logistics of running
a major store would be severely hampered without IT, and the expansion to
Superstores and Hypermarkets would have been difficult without modern IT
developments.
Tesco stores vary greatly in size, from small Express stores covering 2,500
square feet to giant hypermarkets covering 120,000 square feet. The product
range depends on the size of the store, and varies from 2,000 lines in a
small store up to about 40,000 lines in the biggest. Computerised Store
Merchandising and Planning systems ensure that Tesco get the right products
to the right store, and get the right amount of space on each shelf within
a store. This allows Tesco to get optimum sales for the space allocated to
the product, and gives the customer the most appropriate range of products.
A store can monitor what has been sold through the scanning operation at
the checkout. The introduction of barcodes and scanners not only allows
items to be checked out more easily, but it provides information that is
constantly fed back to the store's computer for the monitoring of sales,
both in terms of stock depletion and money taken.
Barcodes and scanners provide several benefits to company’s customers:
As purchases are no longer entered manually into a cash register, accurate
pricing is guaranteed.
The scanning till is faster, reducing the time for which customers have to
queue by about 15%.
Produce is now weighed at checkouts, removing the need to queue twice (once
for weighing and once at the checkout) as used to happen.
Improved promotions may be offered, such as Multisavers.
The customer gets an itemised till receipt giving details of the product
purchased, price, weight (if weighed), total cost and method of payment. It
also shows the store telephone number, plus details which will trace the
sale quickly if a customer has an enquiry.
Tesco benefits as much as the customer from the new systems. Notably:
Improved transaction accuracy: operator error is removed; fraud is limited
as there is no opportunity to enter a lower price on the keyboard.
Improved customer service - customers are important!
Improved productivity. There is no need to label each item with its price,
which can now be displayed on the shelf edge near to the product. Removing
separate weighing stations removes the need for a manned point in the
produce department; customers move through the checkout faster.
Selective promotions can be initiated.
Stock levels can be reduced as the exact quantity held is always known and
re-ordering can be made more accurate
Wastage of perishable goods is reduced, as they too can be ordered more
accurately.
Monitoring sales analysis and the effectiveness of promotions provides
valuable information for Tesco buyers and also the company's suppliers.
Every product has a unique number, the European Article Number or EAN.
This number is allocated to each product by the Article Number Association,
which oversees the operation of the numbers for all businesses in the UK.
The number can be found below the bar code. The bar code is a
representation of that number in a binary form that can be read by a
scanner. The scanner uses a laser and measures the difference in reflection
to the laser of the bars and spaces.
The EAN and barcodes normally consist of 13 digits, although there may be
only eight on smaller products. The first two digits are a national code,
representing the marketing country. The next five digits identify the
supplier of the product and the following five identify the product itself.
The final figure is a "check digit" based on the other twelve numbers,
which allows the computer to validate the code.
The introduction of IT in shopping has been matched by banks. This has
resulted in new developments in payment. The simplest of these is that
cheque details can be printed out by the till, based on the information
used to produce the receipt. Credit card vouchers can be printed similarly,
and credit card details read electronically from the card.
A further advance has come with Electronic Funds Transfer at Point of Sale
(EFTPOS). This allows Tesco to transfer money from a customer's bank
account or credit card account automatically. Two developments that have
come from this are the debit card and "cashback".
Debit cards are a means of purchasing without cash or a cheque. Unlike
cheques, there is no limit to the amount a customer can spend with a debit
card as the transaction is automatically checked at the customer's bank
and, providing there are sufficient funds in the customer's bank account,
the payment is then guaranteed to Tesco. Unlike credit cards, the customer
pays at the time of the sale.
The facility to give customers up to Ј50 in cash also comes from being able
to check the customer's bank or credit card account, and has proved a
popular innovation with customers, who are saved the necessity of a trip to
a bank or cashpoint.
Within a store there are two crucial systems that enable Tesco to sell
products. These are the front-end system, called ProgreSS, and the
replenishment system, SBO.
The ProgreSS system holds pricing details of the 60,000 different products
that Tesco sells, their description, and details of any special offers on
them. It records details about each sale, not just the amount of each item
sold, but whether the price has been reduced, the amount of money tendered
and the change given. It also controls Clubcard processing, registering the
points earned on the card. Whilst the system manages the main grocery
tills, it also has the ability to be aligned to specific business
functions. So different "personalities" are used within the garage,
pharmacy, hot chicken counter and pizza areas.
The system is also used to control the back office and cash areas. During a
normal day's operation the system will transmit batches of information to
the mainframe systems at Head Office. This is primarily sales data, but
also includes details on reduction sales and Clubcard details, together
with daily totals and so on. In return it receives price changes, and new
and delisted product information.
The ProgreSS system runs on an RS6000 machine.
The stock replenishment system is called Sales Based Ordering (SBO). As its
name implies, it orders new stock on the basis of what has been sold. It
also manages in-store stock control and the central ranging and ordering
process.
Whilst there are some 60,000 products sold by Tesco, even the biggest
hypermarket will stock only about 40,000 of them. Some Express stores will
stock only 2,000 lines. The system keeps track of what products are stocked
and how much is in the store, and is then able to use this information,
together with the sales data, to calculate how much more should be ordered.
Most products have to be calculated every day, on a one or two day lead
time (the time between ordering and delivery).
The SBO system also manages the recording of all store-based stock
movements (for example damaged goods, out-of-code waste, transfers to other
stores), stock count scheduling and validation. The stores also use the
system to influence their orders, for example factoring up expected sales
of ice cream when a hot spell is forecast.
ICT systems used by Customer Service Centre.
The centre provides a central customer service operation for the company;
it handles requests for information and customer enquiries. It also handles
the management and administration of Tesco Clubcard, and the processing of
orders for the Baby Catalogue and the Home Shopping service.
The scale of the operation, and the efficient organisation of staff to
provide exceptional customer service, requires the extensive use of IT both
in telephone and information systems.
To give you an idea of the scale of company operation, Tesco employs over
400 staff, both full and part-time. The Clubcard loyalty scheme has over 10
million customers. In a typical week Tesco get 100,000 telephone calls,
5,000 letters, and 1,500 e-mails from customers, and company generates
7,000 outbound letters to customers.
Tesco uses IT to manage 100,000 calls a week, both to organise the calls
efficiently and to provide information on the timing and length of calls
for planning and monitoring purposes. Among the systems Tesco uses are:
ACD - Automatic call distribution (Meridian)
This system manages the way calls get routed to Customer Service Centre
staff. Calls into the centre are distributed to ensure that call queues
are managed effectively. Real time monitoring facilities provide
information on service levels.
Call forecasting and scheduling system (QMax)
The distribution of calls varies significantly throughout the week. This
system is used for forecasting when calls are likely to be made. The
information is then used to schedule staff availability so that they are
there to take the calls.
IVR - Interactive voice response
This is a menuing system on the telephone to filter out those calls that
can be handled without an operator. The customer selects various options
so that calls can be transferred directly to the appropriate service or
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