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Supply Chain and Distribution for
Packaged Goods Updated March 2017
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The Supply Chain Core Purpose and Team
Within the Supply Chain Forecast and Ordering Team our core purpose is to;
“Improve how we work with suppliers and colleagues to provide the best possible availability
for our customers, whilst simplifying our operations and delivering working capital savings.”
The Procurement Team
The Procurement team are your daily order and delivery contacts; they are responsible for the
following:
Daily communication
System maintenance
Top refusals
Warn
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Working with the Procurement
The Promotions & Events Team
The Promotions & Events team are your contacts for planning all promotions. The team are
responsible for the following.
Collaboratively forecasting feature space promotions and loading the forecasts into the
central systems
Managing agreed promotional Pre Filled Units or Event space in store
Reviewing promotion 1st & 5th days’ sales to identify over and under performance
Creating Clearance plans for promotional overstock from depots and store with
commercial
Reviewing total promotion performance and using this to plan for the future
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Working with the Promotions & Events Team
Tesco Range Change Process
The range change process has many steps and is usually initiated by your Buyer. Below you can see
an overview of the steps that are completed by your Supply Chain team so you know what to expect
and when.
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Supplier Performance Management
We work with you on striving to achieve all targets. Your target will be calculated on a number of
factors. You can see those factors on the following page.
Delivered On Time and Failed to Arrive
The first factor of your service level is the quantity of stock that has been delivered on time. To do
this, we classify your orders into two groups:
DOT – Delivered on Time. The order is delivered within the time frame scheduled.
FTA – Failed to Arrive. The order failed to be delivered within the time frame scheduled.
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FTA Coding
An FTA can be broken down further into 6 codes:
FTA 1 – Store Ordering Issue
FTA 2 – DC Issue
FTA 3 – Supplier Issue
FTA 4 – Haulier Issue
FTA 5 – Exceptional Circumstance
FTA 6 – National Planning Issue
You service level is the relationship between the quantity of stock ordered and the quantity of stock
from that order that was delivered on time.
You will always have a service level target and if you’re ever unsure what it is you can contact your
Supplier Performance Manager.
Joint Supply Chain Plans
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Delivering the Basics Brilliantly
Delivering the Basics Brilliantly - Manual
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Visual Insights
Visual Insights is available free of charge and allows you to see key supply chain data and plot it
visually to make identifying trends or root causes easier.
Above is an example of the Visual Insights system with 5 key functions labelled. These are:
1. Menu bar for navigation, adding filters and saving data
2. Dropdown menus to help drilldown data
3. Filter panels to show the information you want to see
4. Tabs to show visualisations including service level, availability, purchase orders and
stockholding
5. Data panels that display the details
Standard Reports
Visual Insights has a number of pre-prepared reports that can be run every time you log in. They
show you the most requested / most used data from our systems. The standard reports available to
you are:
1. Service Level
2. Customer Availability
3. Purchase Orders
4. Stockholding
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Custom Reports
You can also create custom reports in Visual Insights to enable you to template and then re-run the
data set most important to you whenever you need it. Custom reports make use of the drilldown
and filtering capabilities of the system. To create a custom report you can:
1. Apply filters to see just the data you want
2. Save the filters & data view to My Reports
3. Visit My Reports next time you use the system to run your custom report with refreshed
data
How Do I Get Access?
Login at: https://www.tescolink.com/reporting/MicroStrategy/servlet/mstrWeb
Contact us at: [email protected]
Tesco Connect
Tesco Connect is a web portal available free of charge to all UK and ROI suppliers to view forecast
orders and promotional details.
What Does Tesco Connect Show?
Forecast orders for the next 3 weeks split by product, by depot, by day
Current and upcoming promotions; information not available anywhere else for suppliers.
How Do I Get Access?
Visit www.tescoconnect.co.uk and enter your TescoLink username and password. To request
access, or for any access issues please contact [email protected]
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Tesco Connect Home Page
The home page shows key information including the total orders for the next 7 days, priority lines
and promotional activity.
Promotions on Tesco Connect
The promotions page allows you to take control of promotions by providing clear visibility of
forecasted volumes, promotional mechanics and performance.
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Important Note: Tesco Connect shows future and current promotions. If a promotion is not here,
then it is not loaded.
Where does the Tesco Connect Data come from?
Tesco Connect displays information from CR, LM and the promotions system.
CR: CR generates sales forecasts for every store, every product, and every day for
the next 21 days.
LM: We apply lead time diaries, Supplier splits and case sizes to create forecasts
by order date for every product into each depot. Grocery suppliers are able to see
truck forecasts and Fresh Suppliers case forecasts.
Promotions: Tesco Connect is able to show promotion details once they are in
central promotions. This includes the full sales forecasts and the forecasted total
sales volume over the promotional period.
Weather: The effects of weather are included in the forecasts. The temperature
used for this forecast is then shown on Tesco Connect.
Further training is available from www.tescosuppliertrainingessentials.com
The Supplier Partnerships Team
The Supplier Partnerships team work with Supply Chain Operations and you to build trusted
partnerships and deliver improvements for us all.
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Developing our supply chain
To date our focus has been our 50 largest suppliers and we would like to explore how to support
everyone by achieving these three things.
Some example projects so far
A Better Connected Europe
Building economies of scale for products produced on the continent
through shared consolidation points and direct deliveries ex-factory.
Next Generation Consignment
A project to enable Tesco to step change our consignment solution for you.
This will reduce costs and stock holding for both Tesco and our suppliers.
Making the most of our transport
Developing tools to maximise pallet and truck fill for all suppliers. This will
reduce cost and CO2.
A Better Connected UK
Strategic project to build a data set of all of our suppliers’ production and
distribution locations. Once the data is in place we will optimise the route
to market and ordering set up for all packaged suppliers.
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Distribution & inbound standards
Big 6 (Distribution & Country)
Customers recommend us and come back time and again
Improved and more consistent availability for customers with stock being in better
condition at the point of sale due to robust packaging and the correct decisions made in the
supply chain
Colleagues recommend us as a great place to work and shop
We are seen to be tackling a key issue that impedes their ability to do a great job.
We build trusted community relationships
Transparency, innovation, empathy and collaboration within the Grocery industry.
Control Stock
Improved delivery format supports correct receipt of Goods.
Control costs
The main purpose of the process.
Grow sales
Greater, more consistent availability = Growth of sales.
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Improve operating cash flow
Efficiency savings at distribution centre level and throughout the internal supply chain
Non-Conformance Reasons & Examples
Every delivery should achieve Inbound Standards. If a delivery doesn’t meet these standards it’s
known as a non-conformance. Non-conformance reasons include:
Weak Packaging
In these examples, weak packaging has caused waste, shrink (stock loss) and excess cardboard and
plastic.
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Poor Labelling for Break Packs
In these examples, labels states that the boxes are break packs, but instead standard outer
scanning barcodes were present.
Poor shipping standards
In these examples, the products that have been delivered have been damaged in transit due to poor
delivery standards.
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Poor Shipping Standards – Pallets
In these examples, products have been sent from overseas and domestically with inappropriate and
non-conforming pallet standards.
Inbound Standards Principles
The core purpose of our Inbound Standards team is to work with impartiality within Tesco, having
empathy with suppliers and to operate fairly and consistently in the industry. Our principles are to:
Develop understanding of distribution in the wider business
Influence the correct behaviours from suppliers and Tesco colleagues using a data-
controlled relationship
Communicate effectively and to a world class level with all areas
Bring the associated areas of the full supply chain together
Provide a platform for innovation
Encourage collaboration in all areas
Protect Tesco distribution finance & Goods In departments
Work in the wider industry to establish a simpler and smoother process
Provide a ‘go to’ area for all inbound issues
Catalyse improvements with suppliers
Improve the inbound profile for all distribution centres
Discourage ‘silo’ mentality within our business and industry
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Inbound Supply Process
Supply Manual
• Communicates expectation for inbound delivery standards
• Communicates non-conformance rules and costs
• Clear & concise language supported visually
• Generated with the support of 4 suppliers
• Updated & communicated twice per year
• Uploaded to TescoLink.com
• Available within the database for suppliers
• International supply manual also produced
You can find the latest copy of the Grocery Inbound Supply Manual on TescoLink by following the
link: www.TescoLink.com. TescoLink support is available by contacting [email protected]
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Inbound Non-Conformance Database
• Tracking of non-conformance
• Direct link to the Charging Matrix
• Statistical analysis tools tracking:
• Supplier performance
• Category performance
• DC performance
• TPND patterns
• Non-conformance patterns
• Provides data for supplier conferences
• Automated emails to suppliers, Tesco Categories and Inbound Standards Department
• Provides feedback throughout process
• Supplier access to Database – restricted access and functionality
Supplier Cost Recovery Matrix
Designed to control costs within distribution
Costs recovered from Suppliers via debit note
Flat Rate Scorecard
Fair approach to cost recovery vs smooth flow of stock
Supported throughout Tesco departments:
o Finance
o Commercial
o Categories
o Legal
Linked to Supplier Scorecard
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Ways of Working
You can find further detail of Non-Conformance charges, how to accept or decline and more in the
Deals and Charges at Tesco course block of www.tescosuppliertrainingessentials.com
In the case of a non-conformance to Inbound Standards this is what you should know:
Tesco colleagues at the site will enter the details into the Inbound Standards Database
You will receive a notification of the non-conformance. Your buying team will receive the
same notification.
The notification will detail next steps and you will be asked to accept or decline any
applicable costs within the Inbound Standards Database
If you decline, make sure to fill in your comments so we can monitor your feedback and get
in touch if necessary
If there is no response within 30 days this will be taken as implied agreement to the charge
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Inbound Standard Control
This diagram illustrates the Inbound Standard ways of working at an overview level. On the next
page, you can see the responsibilities of each area.
Inbound Supply Responsibilities
Supplier
Aware of the delivery format expectations
Confident to advise the buying area of where conflict may arise in delivery format
Has contacts within Tesco commercial, category and receiving distribution centre to
resolve issues with
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Buying
Aware of the expected format and where a particular delivery will not conform
Confident of other avenues to pursue to have their order successfully receipted
Ensures orders will be capable of adhering to the format where possible and has a plan for
when they do not
Advises the site with sufficient notice where a delivery may fail to discuss alternatives
Distribution Centre
Flexible where support is offered
Understands the complexity that their area of the business can generate
Works in association with the buying area on exceptional circumstances
Works collaboratively with the supplier in the understanding that the receipt format and
delivery structure are unique for the site
The Benefits of Inbound Standards
Below you can see a list of the benefits of the relationship driven by Inbound Standards.
Clear, concise delivery standard expectations
Clear, concise costing generated for every non-conformance
Collaborative and data-controlled relationship between Tesco and Suppliers
Accountability for standards ownership clarified
Costs controlled
Deliveries will arrive at sites at a universal standard
Expedited delivery turnaround times
Full use of reduced check, ASN, SPPU, SSCC
Goods In efficiency cost benefit for both Tesco & suppliers
Universal understanding of the Inbound process for distribution, suppliers, categories and
commercial functions within Tesco
Root cause analysis where needed
Consistent communication between Tesco and suppliers working together to make the
delivery environment as optimised as possible
GCA aligned process
For further information you can download the Grocery Inbound Supply Manual from
www.TescoLink.com
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Tesco Primary Distribution
Achievements so far
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Tesco Primary for Packaged Foods
Primary container deliveries
Containers dropped and swapped at DC’s
Support in making bookings to mitigate any storage charges.
Responsible for returning containers within agreed detention period.
Price includes containers restitution to port.
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Primary containers to Middlesbrough
This is an example to show the route a Tesco Primary container would take vs. the standard route
an external haulier may take.
Could Primary help you?
