from Daniel Jones, chairman, Lean Enterprise Academy
Sir; When Lee Scott, CEO of the mighty Wal-Mart, asks the UK government for protection against competition from Tesco (one fifth of its size), something significant is going on.
The rise of Tesco is not because it is better at dominating its home market than Wal-Mart is in the US. Both benefit from enormous scale and purchasing power.
The difference is that Tesco has developed a superior lean business model that is exposing the cracks in the Wal-Mart business model. Through its loyalty cards, it knows exactly who its customers are and what they want - Wal-Mart does not - and it has opened a range of formats to mirror customer circumstances - which Wal-Mart is just thinking about. It has also developed a rapid, reflexive replenishment supply chain to serve all these formats.
Quite simply, Tesco is giving more of its customers exactly what they want, and where and when they want it, at lower costs. The good news is that none of this is a secret; competitors can follow their example. It is not an exaggeration to call Tesco the Toyota of the grocery business. They are by no means perfect but, like Toyota, they have not lost the drive to keep improving all of their processes.
Sir; When Lee Scott, CEO of the mighty Wal-Mart, asks the UK government for protection against competition from Tesco (one fifth of its size), something significant is going on.
The rise of Tesco is not because it is better at dominating its home market than Wal-Mart is in the US. Both benefit from enormous scale and purchasing power.
The difference is that Tesco has developed a superior lean business model that is exposing the cracks in the Wal-Mart business model. Through its loyalty cards, it knows exactly who its customers are and what they want - Wal-Mart does not - and it has opened a range of formats to mirror customer circumstances - which Wal-Mart is just thinking about. It has also developed a rapid, reflexive replenishment supply chain to serve all these formats.
Quite simply, Tesco is giving more of its customers exactly what they want, and where and when they want it, at lower costs. The good news is that none of this is a secret; competitors can follow their example. It is not an exaggeration to call Tesco the Toyota of the grocery business. They are by no means perfect but, like Toyota, they have not lost the drive to keep improving all of their processes.
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