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Tesco does this by providing opportunities for everyone to increase their learning, thus enabling Tesco to thrive in a constantly changing and competitive market place. Tesco does this by:

• designing training packages which equip people with the knowledge, skills and experience needed to reach high standards of performance, and equipping trainers to coach others thus maintaining excellent quality standards.

• enabling training to be delivered in the workplace by people who know how to do the job themselves.

• exploiting new methods of learning, and thereby providing a supply of general business managers for the future.

• developing effective working relationships with colleagues and suppliers through listening and challenging, and designing products which inspire them.

Research and development of effective corporate human resource policies

Tesco does this by:

• being constantly aware of UK and European employment legislation, and translating it into policy that maintains a balance between cost effectiveness, fairness, developing relationships with people, and company’s business aims.

• researching and developing people involvement strategies; this involves analysing staff research, which includes both large-scale corporate surveys and specialist staff research.

• providing updates on employment law.

• scanning and benchmarking other organisations, in order to import best practice and maintain a competitive stance.

• ensuring specific policies, for example regarding the employment of disabled people and equal opportunities.

• achieving external recognition, to ensure that Tesco is seen as a quality employer.

Developing selection standards and implement corporate entry programmes

Two crucial roles for the Human Resources Department are:

• developing selection standards which will enable managers to select the best people who will continually increase value for customers.

• implementing corporate programmes in order to ensure that the company's manpower requirements are met.

Tesco does this by:

• designing recruitment and selection processes which will equip managers with the skill and knowledge to select the best.

• training managers to maintain selection standards, and to select using the most reliable and leading-edge processes.

• developing corporate competency frameworks which enable managers to select the right people, who have the skills the business will need in the future.

• developing corporate entry programmes to ensure that corporate manpower needs are met in terms of skills and numbers.

• developing and implementing Tesco employment branding and marketing strategy in order to ensure that Tesco is seen as a quality employer which attracts the highest calibre candidates.

• developing a pool of Excel graduates providing a supply of managers with broad business experience.

• developing at a national level links with leading education/industry establishments, and planning initiatives whereby managers can develop links with education at a local level.

Reward Development

Reward Development researches and develops rewards and organisational design strategy which enable Tesco to recruit, motivate and retain the best. Tesco does this by:

• sourcing and analysing pay and benefits data to enable Tesco to keep remuneration and benefits packages competitive.

• continually shaping innovative ways of rewarding staff, thereby enhancing the value of the reward package and increasing staff retention and stakeholding.

• developing performance management processes and tools which will improve performance and encourage motivation in staff

• providing advice and if necessary challenging organisational design, thereby ensuring a maximum return on corporate reward spend and creating organisational structures which will deliver business goals.

HR professionals

HR professionals operate out of the Line, working as part of the senior management team in order to influence and implement HR strategy. They work closely with the central HR departments and line managers to deliver key aspects of company’s business plan:

• Develop the best

• Recruit the best

• Retain loyal and committed people

• Live the values of the company

• Transfer HR skills effectively to the line.

Hence these functions help meet the objectives successfully. All Tesco’s organisation structure works as links of a chain, if one link falls down, all the organisation will experience difficulty. For example, most important department of Tesco, I consider, is Distribution department. If this department fails, products will not be delivered to the store, so customers will go to another store. Tesco’s success is built on the good work of each department.

As an example, Tesco has recently introduced Customer-Oriented Initiatives, such as:

Loyalty cards

Clubcard was test-launched in October 1993 and was rolled out nationally in February 1995. Clubcard has transformed the retail grocery sector and has brought Tesco closer to its customer. At the heart of the programme is one of the most sophisticated customer databases in Europe.

Clubcard is a magnetic "swipe" card obtained free in store. The checkout assistant swipes the card prior to scanning the customers shopping. For every £1 spent, one point is earned. Each point is worth 1p. When shopping at the originating store, the till receipt advises:

• Points earned from that shopping trip

• Points accumulated during the quarter.

The points earned are recorded on a central computer and are converted into money-off vouchers every quarter.

Customers can earn Clubcard points at:

• Tesco stores

• Tesco petrol stations

• B&Q

• Energi - through Norweb

• Tesco Personal Finance

• Tesco Home Shopping.

In addition Clubcard has recently been extended to Ireland and to the Tesco Vin Plus store near Calais.

Home shopping Many people today, both single people and couples, are working longer hours and do not want to spend part of their leisure time making a trip to the local supermarket. To help people save time on shopping, Tesco has introduced Home Shopping, a service which makes use of information technology so that people can do their shopping via the Internet from their home computer. This was first introduced on CD-ROM in July 1996, and Tesco followed this up by becoming the first UK food retailer to offer an Internet-based home shopping service in November 1996.

Personal Finance In 1997, Tesco decided to extend its customer offer to include personal financial services. In partnership with the Royal Bank of Scotland, Tesco is providing new ways of banking and other services to its customers.

C 3.

The impact of ICT on internal and external communications

Importance of ICT

IT is vital to Tesco because every aspect of its operation is controlled or monitored by IT - stock, distribution, payroll, accounts, and so on. For example, when an item has its barcode read at the checkout, the system not only logs the price onto the till, but also logs the financial transaction between Tesco and the customer and the fact that the stock has been reduced by one item. On the distribution side, instructions from the mainframe computer are sent directly to fork-lift truck operators at depots by radio links.

All stores are connected to the mainframes at Head Office via the Tesco Network. There are a large number of different applications that stores use both independently and via the mainframe connection. For example there are Personnel and Scheduling systems in-store, and access to electronic mail via the mainframe.

IT capacity

Tesco has a three-level architecture with mainframe, middle system servers and PC clients. Their main frame has a 6 million Mb storage capacity (equivalent to 6 million 500-page books!). Their private digital network to 600 stores has a capacity of 11.5 Mb. They use some 100 Tesco-written computer applications and over 200 PC packages.

How much does Tesco spend on IT each year?

Last year, Tesco spent about £133 million on IT, that is about 1.4% of turnover.

How does that compare with other companies?

A recent independent survey of Europe's leading 500 companies in all commercial and industrial sectors placed Tesco 112th overall in Europe in terms of IT spending, but 3rd in the list of European supermarkets, and 1st amongst British supermarkets. [Source: Information Week 19-20/12/97].

How many on-line card authorisation requests does Tesco receive each day?

Over one million on-line card authorisation requests are dealt with every day.

Internet site

The Internet site receives 250,000 hits per week and was used to launch Tesco’s home shopping service and the Tesconet Inertrnet Service provider. The internet site has proved to be a great success, with the introduction of Tesco Direct, the home ordering and delivery service. Such “home shopping” is becoming increasingly important as more and more customers gain access to the internet via home PCs. Sainsbury’s, one of Tesco’s great rivals, has also now launched its own home delivery service via the internet.

Tesco own Internet site. Home page.

ICT systems used by Distribution Department

IT has revolutionised all aspects of the selling, ordering, distribution and analysis of Tesco products. The operation of Tesco large distribution centres is a highly complex business. In recent years new computer systems have revolutionised distribution operations, allowing more effective stock control procedures, increasing productivity and making the best use of time, space and labour.

The base system used to control the distribution operation was purchased from Dallas Systems and customised to Tesco requirements. There are two particularly important sub-systems, known by the acronyms DCOTA and DCAMS.

DCOTA (Distribution Centre On-board Terminal Access) is a system which sends information by radio directly to the special terminals in the trucks of the fork-lift truck

drivers at the distribution centres. The system controls the movement of stock and trucks in order to make the most efficient use of time and space, automatically matching up locations and trucks. As soon as one assignment is finished, the next brief will be transmitted to the truck-mounted terminal, showing the driver where to go next. Every warehouse location has a check number prominently displayed on the racks; this number is entered by the driver each time he visits a location, enabling the computer to check that each pallet has been placed in the correct slot.

DCAMS (Distribution Centre Assignment Monitoring System) is the system that monitors how far each job has progressed, and the deployment of staff. It is available to supervisory staff via hand-held radio frequency terminals, enabling them to predict and pre-empt problems by re-deploying staff and, if necessary, changing work priorities.

Radio frequency communications are also used in the checking in of goods.

Ordering by stores now relies heavily on IT, using Sales Based Ordering. Data is received by the distribution centre from the Head Office mainframe system, and then passed to the warehouse systems described above.

These mainframe computers are among the largest in Britain. The mainframes are either IBM or compatible (Amdahl), running IBM operating systems. There are mainframes situated in two separate locations.

The loss of a whole mainframe would have serious effects, and for this reason company has two mainframes to provide backup capacity. In the event of a disaster which involved the complete destruction of one of the computer centres, the other could re-establish these vital systems within 48 hours. The backup procedure is tested regularly each year.

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