Case study 6.2

1.      What benefits does Tesco’s information exchange offer to the retailer and its suppliers?

Tesco information exchange (TIE) is used for combining retailer’s knowledge along with the product knowledge of suppliers and the responsibility for managing products to the appropriate suppliers. It allows suppliers to have better understanding of a specific product lines, and when a suppliers join TIE, they can have an easy access to the web site and view daily sales range electronically from Tesco stores. From this the suppliers can monitor the changes  in real time and can have more time to react, the retailer will come know about the  product availability and reduction in the inventory.   

     2. What differences have the use of TIE added over the original EDI system?

There are two differences available between EDI and TIE. The first difference is, EDI is a technique where we can only exchange the data electronically where as TIE is two way exchange. Because of the two ways exchange the supplier has to be involved more in the supply chain. In addition to this the data will be processed and will be analysed to provide the information regarding the sales performance from different aspects such as TV region, distribution centre or individual store which effect the promotions. The second difference is TIE has a promotion management module which allows the retailers and suppliers to manage their business and also helps them to collaborate in all stages of the promotion.

    

      3.Discuss reasons why only two of Tesco’s suppliers have fundamentally altered the way  they work as a result of TIE?

Ø  The suppliers will be providing products to other retailers who may not be using a TIE    exchange system as Tesco has. So the suppliers have to keep using the same work line to satisfy all their retailers.

Ø  Retailing is one of the traditional industries, where each of the suppliers must follow their own work line that suits the needs for the majority of the retailers.