Current Management Information

· Data held on mainframe, PC or on paper

· Internal data analysed using SAR reports and MAS analysis tool (see below)

· External data received by EDI or on paper

Planned Data Warehouse

· Data collected from Tesco operational systems and external sources, and stored centrally to provide one consistent source of information

· Data is stored on customer behaviour, product performance, branch performance supplier performance, depot performance

· Data held at lowest level to enable ad hoc groupings,
e.g. salt sales in stores by the seaside last Easter.

D) Analytical tools

Current Management Information

· Mainframe based

· FOCUS - report generator

· SAR - report viewer

· MAS - Tesco-written multi-dimensional analysis tool

· PC Lotus suite - spreadsheet and database applications

Planned Data Warehouse

· A simple interface with the information using the score card concept, with top level measures and capability to "drill" to the level of information required to support decisions

· IT populate the Information Warehouse and users control their reporting requirements

· Logical access to information, with user choice of level, groupings, stores, products, measures, and other parameters

ICT systems used in store operations.

IT is essential to the running of a modern store. It is used for planning, monitoring and auditing store operations. In fact, the logistics of running a major store would be severely hampered without IT, and the expansion to Superstores and Hypermarkets would have been difficult without modern IT developments.

Tesco stores vary greatly in size, from small Express stores covering 2,500 square feet to giant hypermarkets covering 120,000 square feet. The product range depends on the size of the store, and varies from 2,000 lines in a small store up to about 40,000 lines in the biggest. Computerised Store Merchandising and Planning systems ensure that Tesco get the right products to the right store, and get the right amount of space on each shelf within a store. This allows Tesco to get optimum sales for the space allocated to the product, and gives the customer the most appropriate range of products.

A store can monitor what has been sold through the scanning operation at the checkout. The introduction of barcodes and scanners not only allows items to be checked out more easily, but it provides information that is constantly fed back to the store's computer for the monitoring of sales, both in terms of stock depletion and money taken.

Barcodes and scanners provide several benefits to company’s customers:

· As purchases are no longer entered manually into a cash register, accurate pricing is guaranteed.

· The scanning till is faster, reducing the time for which customers have to queue by about 15%.

· Produce is now weighed at checkouts, removing the need to queue twice (once for weighing and once at the checkout) as used to happen.

· Improved promotions may be offered, such as Multisavers.

· The customer gets an itemised till receipt giving details of the product purchased, price, weight (if weighed), total cost and method of payment. It also shows the store telephone number, plus details which will trace the sale quickly if a customer has an enquiry.

Tesco benefits as much as the customer from the new systems. Notably:

· Improved transaction accuracy: operator error is removed; fraud is limited as there is no opportunity to enter a lower price on the keyboard.

· Improved customer service - customers are important!

· Improved productivity. There is no need to label each item with its price, which can now be displayed on the shelf edge near to the product. Removing separate weighing stations removes the need for a manned point in the produce department; customers move through the checkout faster.

· Selective promotions can be initiated.

· Stock levels can be reduced as the exact quantity held is always known and re-ordering can be made more accurate

· Wastage of perishable goods is reduced, as they too can be ordered more accurately.

· Monitoring sales analysis and the effectiveness of promotions provides valuable information for Tesco buyers and also the company's suppliers.

 Every product has a unique number, the European Article Number or EAN. This number is allocated to each product by the Article Number Association, which oversees the operation of the numbers for all businesses in the UK. The number can be found below the bar code. The bar code is a representation of that number in a binary form that can be read by a scanner. The scanner uses a laser and measures the difference in reflection to the laser of the bars and spaces.

The EAN and barcodes normally consist of 13 digits, although there may be only eight on smaller products. The first two digits are a national code, representing the marketing country. The next five digits identify the supplier of the product and the following five identify the product itself. The final figure is a "check digit" based on the other twelve numbers, which allows the computer to validate the code.

The introduction of IT in shopping has been matched by banks. This has resulted in new developments in payment. The simplest of these is that cheque details can be printed out by the till, based on the information used to produce the receipt. Credit card vouchers can be printed similarly, and credit card details read electronically from the card.

A further advance has come with Electronic Funds Transfer at Point of Sale (EFTPOS). This allows Tesco to transfer money from a customer's bank account or credit card account automatically. Two developments that have come from this are the debit card and "cashback".

Debit cards are a means of purchasing without cash or a cheque. Unlike cheques, there is no limit to the amount a customer can spend with a debit card as the transaction is automatically checked at the customer's bank and, providing there are sufficient funds in the customer's bank account, the payment is then guaranteed to Tesco. Unlike credit cards, the customer pays at the time of the sale.

The facility to give customers up to £50 in cash also comes from being able to check the customer's bank or credit card account, and has proved a popular innovation with customers, who are saved the necessity of a trip to a bank or cashpoint.

Within a store there are two crucial systems that enable Tesco to sell products. These are the front-end system, called ProgreSS, and the replenishment system, SBO.

The ProgreSS system holds pricing details of the 60,000 different products that Tesco sells, their description, and details of any special offers on them. It records details about each sale, not just the amount of each item sold, but whether the price has been reduced, the amount of money tendered and the change given. It also controls Clubcard processing, registering the points earned on the card. Whilst the system manages the main grocery tills, it also has the ability to be aligned to specific business functions. So different "personalities" are used within the garage, pharmacy, hot chicken counter and pizza areas.

The system is also used to control the back office and cash areas. During a normal day's operation the system will transmit batches of information to the mainframe systems at Head Office. This is primarily sales data, but also includes details on reduction sales and Clubcard details, together with daily totals and so on. In return it receives price changes, and new and delisted product information.