about the meaning of “supply chain”The term supply chain describes the entire process of producing, selling and handling products. It therefore does not only include the selling company, but rather all steps and companies necessary for production, transportation, storage, sales and, depending on the product, also recycling. General introduction to the importance and development of supermarket logistics Many logistics processes are required to ensure that customers can purchase thousands of different products in supermarkets. The availability of each product is obviously very important to achieve high profit margins and customer satisfaction, since customers may already be dissatisfied if just one product is out of stock. Therefore, complete control and knowledge of the supply chain and data about each product is a key factor for success in business. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essay Within the retail sector there were and still are many changes taking place regarding logistics processes, in order to achieve very high availability of products. According to Fernie and Sparks (2004) manufacturers in the United Kingdom United independently delivered their products to different stores before 1980. From the 1980s retailers began to build their own distribution centers, which were used to combine deliveries from different manufacturers. key change within the supply chain, because retailers have managed to organize the supply of their stores themselves and are therefore less dependent on manufacturers, because they can maintain a safety stock level of the most important products in distribution centers . distribution centers have allowed retailers to have a more centralized and therefore simpler overview of warehouse stocks (see Fernie/Sparks 2004: 16). Tesco PLC also began to do the same in the 1980s, replacing small distribution centers with larger ones that were able to handle products with different temperature levels. Furthermore, they have upgraded their delivery vehicles to provide simultaneous transport at different temperature levels (see Harrison/ Van Hoek/ Skipworth 2014). In 1982 Tesco PLC also introduced computerized checkouts (see Tesco PLC 2018 website), which is obviously an important step not only with regards to the speed of the checkouts, but also for the entire supply chain in general, because it possibly allowed Tesco to directly measure its sales and therefore simplify the entire distribution and logistics process. Since the 1990s retailers have started to take more and more control of the entire supply chain/logistics processes of each product (rather than manufacturers having control) in order to gain even better control of each logistics process (this also opens up the use of just in time principles) and thus increase customer satisfaction and profit (see Fernie/Sparks 2004: 16-17). This development can be seen, for example, in the structure of the German discounter “Aldi Süd”, where they now independently control the majority of logistics processes. For example, they promote their products in their own flyers instead of letting the manufacturers do the advertising. Without near-complete control of supply chains, companies would not be able to achieve certain goals. Such objectives are for example the reduction of delivery times, the increase of the service level or even broader objectives such as the reduction of C02 emissions. Tesco PLC, being the largest user of biofuel in the UK, reflectsdirectly the importance of the development explained above, since they would not have reached this level without having their own fleet of trucks that they can equip as they want (see Harrison/ Van Hoek/ Skipworth 2014). Today, many companies are trying to implement or even already implemented online stores. This is obviously generating some problems, for example the need for new infrastructure to handle online orders, delivery to customers, or unknown competitors who may only focus on online trading. Tesco began selling online in 2000 with the launch of “Tesco.com”, where more than half a million customers now purchase products per week (see Tesco PLC website 2018). According to Fernie and Sparks (2004) Tesco started by using existing infrastructure to fulfill online orders. So initially they didn't introduce dedicated centers but rather used an in-store collection system. This was particularly important for the period of introduction of online shopping, as the low number of customers did not justify the high costs resulting from the launch of dedicated distribution centers. Additionally, in-store pickup ensured shorter delivery times, as each existing store was able to send delivery trucks instead of shipping them from a dedicated center, which would most likely not be located in the city center as the stores were existing Tescos (see Fernie/Sparks 2004: 18/19). With an increasing number of customers online this strategy was adapted in 2006, when Tesco launched its first distribution center completely dedicated to fulfilling online orders. Furthermore, in addition to the hundreds of stores with an in-store pickup system, there are now several so-called “dark stores” that focus entirely on online orders (see Thompson 2012). The advantages of these dark stores are obviously the focus on online, since it is possible to automate the picking infrastructure within the stores and also it is possible to use dedicated trucks that can handle multiple deliveries and therefore exploit economies of scale. Furthermore, selling online allows Tesco to analyze the entire purchasing process and allows it to collect information on the decision-making process of customers purchasing products online, which can then be used to optimize marketing and offering. However, in the summer of 2018 Tesco closed the online shopping site "Tesco direct", used for the sale of non-food products, because operating costs were too high. Please note: this is just an example. Get a custom paper from our expert writers now. Get a custom essay According to Charles Wilson (former CEO of Tesco UK&ROI, 2018) Tesco prefers to focus on an online retail website (tesco.com) to offer customers the opportunity to purchase food and non-food products on one website. Furthermore, he confirmed that “this is an essential step towards creating a more sustainable non-food offering and growing our business for the future” (see Rigby on internetretailing.net 2018). This demonstrates once again how complex online retailing can be for experienced retailers such as Tesco and that effective in-store selling does not guarantee an effective internet-based sales system. Impact of Tesco's diversification on possible logistics issues Tesco PLC has over 6800 stores worldwide which all come with different government regulations and structures which obviously have a huge impact on business processes within Tesco, but also within the In the UK there are many different types of Tesco stores (see Tesco PLC website 2018). According to Tesco's preliminary 2017 results there are already 3433 stores in the UK. But the shops. 2017: 60-64).