Figure 1: Layout Management at TescoThe figure above shows an example of a typical Layout ofTesco Express. In terms of merchandising and store layout, there are few betterthan Tesco. The store is laid out in different sections which creates an openshopping environment that helps customers find the products they want a loteasier. For example, you can see on the left-hand side that it contains all thegrocery items which allows customers to easily find those type of products andit also is easier for staff to restock the items. Tesco stores around differentparts of the world have the same layout which helps customers feel comfortableas they stop foot into the store.
Tesco management department will make surethey take care of the placement of all products as this helps benefit bothcustomers and store sales. An example of this would be placing the highestselling 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 thesupply chain. This type of layout on convenient location for customers iscalled Process Layout.
2.3 COSTThe cost of producing products and services is influenced bymany factors but the two important sets are the 4 V’s (Volume, Variety,Variation, Visibility) and the internal performance of the operation atQuality, Speed, Dependability and Flexibility. 2.3.1 VOLUMEThe volume of an operation depends on the number of productsand services made by the operation.
Based on Tesco and how they operate, thenumber 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 thanthe other smaller stores and this results in Tesco having an increase incustomers. The reason for this is because Tesco purchase their products in bulkand 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 discounton the prices.