Harnessing information technology in business can help to improve it. In fact, many companies all over the world have boosted their sales volumes and profits due to the proper utilization of information technology. Tesco PLC is one of the companies that have adopted IT to have a competitive advantage in the industry.
Tesco PLC is the prominent supermarket chain in the United Kingdom. Most supermarkets developed the idea of linking to their suppliers in the early 1990s such that orders could be sent to them immediately after the inventories reached reorder levels. This was to be done electronically. Such a practice would have prodigious benefits in terms of cost efficiencies. However, this did not mean that suppliers could be caught off-guard when they received the orders (Ryle, 2013).
Tesco developed the Tesco Information System at the end of the 1990s. This has proved advantageous to the company because now it is able to monitor stock levels and sales of its products in different branches. This system is linked in such a way that suppliers can know when deliveries ought to be made. In this regard, they are able to perform their demand forecasts. They can strike a balance between the production of goods, dispatch and delivery to the supermarkets. These suppliers can also monitor their stocks at different supermarkets where they supply. This makes work easier and faster because supermarkets do not have to order; suppliers know when to deliver. Furthermore, this technology allows avoiding the costs associated with ordering (Dickinson v Tesco PLC., 2013).
Tesco has improved the performance of its procurement office through inbound logistics and supply chain management via IT. If the company is running a promotion, suppliers can monitor the effect of this promotion on the products they supply. The supplier is able to know whether there is an increase or decrease in demand. In addition to cost reduction, this technological development has also brought about the improvement in customer service.
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