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Figure 1: Layout Management at Tesco

The figure above shows an example of a typical Layout of
Tesco Express. In terms of merchandising and store layout, there are few better
than Tesco. The store is laid out in different sections which creates an open
shopping environment that helps customers find the products they want a lot
easier. For example, you can see on the left-hand side that it contains all the
grocery items which allows customers to easily find those type of products and
it also is easier for staff to restock the items. Tesco stores around different
parts of the world have the same layout which helps customers feel comfortable
as they stop foot into the store. Tesco management department will make sure
they take care of the placement of all products as this helps benefit both
customers and store sales. An example of this would be placing the highest
selling products in an area where it is visible to customers as they walk in.
Tesco keeps this strategy to balance the sales of goods which organises the
supply chain. This type of layout on convenient location for customers is
called Process Layout.

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2.3 COST

The cost of producing products and services is influenced by
many factors but the two important sets are the 4 V’s (Volume, Variety,
Variation, Visibility) and the internal performance of the operation at
Quality, Speed, Dependability and Flexibility.

 

2.3.1 VOLUME

The volume of an operation depends on the number of products
and services made by the operation. Based on Tesco and how they operate, the
number of customers that are served is the output of the transformation model.
When comparing Tesco to a smaller store, the prices at Tesco are cheaper than
the other smaller stores and this results in Tesco having an increase in
customers. The reason for this is because Tesco purchase their products in bulk
and this reduces changeover cost to supplier. With purchasing products in bulk,
there is a possibility that your unit cost could reduce as you may get discount
on the prices. 

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