A Personal Look at the Resiliency of Tesco and Their Supply Chain

I recently had the opportunity to interview Robert Mason and Barry Evans, co-authors of the book ‘The Lean Supply Chain: Managing the Challenge at Tesco.’ It was published in September 2015 and you can read my review here.

Barry Evans worked as a Lean Process Manager at Tesco, developing ways for lean thinking to be applied to Tesco’s supply chain. He has also joined the Lean Enterprise Research Centre at Cardiff Business School as a Senior Research Associate. Robert Mason is a Senior Lecturer in Logistics and Operations Management at Cardiff Business School and has led many business research projects with Tesco as a partner. To read their ongoing blog posts, click here.

When I originally read ‘The Lean Supply Chain,’ I was struck with the balance the authors managed to achieve in their coverage of Tesco. On the one hand, Mason and Evans are clearly proud of what the large retailer has accomplished – through its supply chain and beyond. On the other hand, these have not been easy years for Tesco (horsemeat scandal 2013, accounting scandal 2014, and questions raised about how suppliers are treated).

I risked distancing Mason and Evans from me by starting the interview with a series of questions about the negative coverage Tesco has gotten in the news over the last few years. Rather than responding defensively, they calmly explained – as I am sure they have done many times – their view of the decisions and events leading to those corporate missteps.

I also got the impression from them that no one at Tesco expects an easy path. And while they may not have foreseen that they would be responsible for so many of their own difficulties, the priorities and operational structures established to make them competitive also served as guidance back to the straight and narrow.

Ingrained in the Tesco philosophy is the idea that simplicity – especially in the face of complexity – is paramount. But not even simplicity should be expected to be easy at Tesco. ‘Onerous’ was the word one of the authors used to describe the difficulty of maintaining a simple approach. This translates to mean short, concise recommendations – even to the board, and clarify of purpose being spelled out in each job description.

Looking at challenges as opportunities to succeed where others are likely to fall short has serves Tesco well. As Mason told me, “When you’re a lean supply chain, you are forced to (or get to) ask and answer questions sooner, and to confront issues sooner.”

So what allowed the authors to present the Tesco story, and what has probably contributed to Tesco’s ability to survive their internally created challenges as well as the external ones? As Mason and Evans were quick to point out, the global financial crisis of 2008 hit the UK retail sector particularly hard. As a result, Tesco was forced to handle a brand crisis and steep sales challenges simultaneously. They remained resilient by adhering to a few critical tenets:

• As I have already discussed: Fight to maintain simplicity in the face of complexity, and
• Focus on the customer rather than the competition.
• Remember that your greatest enemy is complacency.

We wrapped up our conversation by discussing what the authors hoped the supply chain leaders of tomorrow would take away from ‘The Lean Supply Chain’ as lessons.

Evans: The pursuit of excellence is always more important than the pursuit of efficiency.

Robert: Understand what the customer wants and deliver it to them.