Case study - Tesco

Our Mpro suite enables Tesco to fully manage the ordering and distribution of store consumables, dramatically improving procurement efficiency, whilst reducing overall spend.

The Challenge

Tesco were looking for a better way to manage the ordering and distribution of store consumables from over 200 suppliers to a 780 store network throughout the UK.

Store consumables are frequently ordered indirect goods (not for resale) that are key to the operation of Tesco’s business and operation of the stores. Individual Tesco stores typically order these goods from the 200 suppliers on a daily basis.

The previous method of ordering was manually intensive and complex – there were several systems to order through depending on the commodity. The store had limited visibility of what was being used, the level of stock on hand and spend. Given this lack of information and the importance of keeping the stores operational, the stores tended to lean on the side of caution and over stock on a just in case basis. Tesco’s financial shared services centre had no real visibility of what had been ordered and was not in a position to reconcile back to the original order or confirm delivery of the goods when the invoices were received. Additionally the head office required improved visibility and control through the store’s supply chain.

In summary, the problems Tesco was looking to solve were as follows:

• Consolidate 7 different ordering processes into 1 electronic process.
• Provide accurate range and spend to the stores.
• Support the management of appropriate/accurate stock levels in store.
• Provide the Financial shared services centre with visibility of the PO’s from the stores and in doing so simplify and streamline the reconciliation process.
• Provide suppliers with approved, accurate orders and provide a simpler, more efficient payment process.

 

 

The Solution

The Marrakech Mpro:Procure solution gives Tesco control of the range of products available to stores on a format basis. Mpro:Procure provides both stores and the financial services centre with a simplified invoicing and payments process.

The in-store solution, initially allows stores to procure indirect goods such as consumables and equipment. The stores access the available range of goods, appropriate to their store format, through a single electronic catalogue. It is an easy to use, intuitive system and is used by a wide range of users of differing abilities and experience in stores; there are approximately 16000 users able to use the system across the UK stores. The existing Tesco replenishment and logistics systems are connected in real time to Mpro:Procure and provide complete visibility of orders and deliveries to users at the store level requiring the goods.

Mpro:Procure is integrated into Tesco’s supply chain and finance systems, providing their suppliers with the ability to process orders, raise invoices and view demand planning information online. The financial services centre receives all invoices from Mpro:Procure electronically, removing any need for manual intervention in the invoice process, and because the invoices are based on the purchase orders raised, matching is to a very high level.

The Results

The unique nature of the Mpro:Procure offers benefits to all parties in the supply chain. At the store level, key personnel spend less time ordering goods. The electronic ordering system removes the paperwork, removes the follow up questions from finance, eliminates off contract spend and reduces the chance that people waste money ordering unnecessary goods. Simply put, the solution helps to ensure that for stores the "right product is ordered at the right time and at the right price", providing visibility of spend and allowing staff to proactively control costs through reduced stock levels and better, more timely information.

At a corporate level, Tesco now have visibility down to a store and transaction level for this spend. The finance function has less mismatched invoices and improved compliance with payment cycles.

The benefits can be summarised as follows:

• Less time spent processing orders in stores.
• Less time spent processing invoices.
• Reduced spend in stores, through ordering the right
  products at the right time at the right price.