Enabler Wipro - Tesco's Central Europe clothing implementation programme
In only eight months, international grocery giant Tesco met the challenge of building a new $400m business and supply chain from scratch to supply 18,500 lines of own-brand clothing with relevant labels in four languages to 250 stores in four countries in Central Europe, with an Oracle-based IT infrastructure built by a 60-person Tesco and Enabler Wipro team.
 The business challenge was how to find a way to exploit the growth potential in the CE Non-food market - predicted to grow from $1.65 bn to $2.75 bn over five years (+ 67%) - quickly, in markets where Tesco had different, unintegrated head office, store and supply chain systems.
Current IT and supply chain systems were not designed to manage pan-European trading. There were different legacy systems in each country, country by country buying systems and no universal view of data - lines, bar codes, prices, etc. Existing systems would therefore not enable Tesco to fulfil its goals of building on its status as a pioneer in non-food in the grocery sector.
New systems needed to enable Tesco to meet the challenge of greater competition from local competitors; satisfy customers through improved ranges through not only price but quality; and, exploit opportunities provided by lowered barriers following EU membership by CE countries.
Tesco wanted to move from operational independence in each market to central and local collaboration within the new trading company, whilst still enabling each retailer to act locally in each market. Rapid set up was required, from scratch to first purchase orders in only eight months; and the use of highly skilled and experienced resources as crucial to the success of the programme.
Success depended on a deep appreciation and understanding of how the Oracle applications worked in practice, to meet the very tight deadline and budget. New and creative ways of developing work arounds were developed to minimise the number of modifications. This was achieved by harnessing Enabler Wipro's skills and knowledge on how to integrate Oracle with other applications and legacy systems.
Tesco decided to create a new company, TICB (Tesco International Clothing Brands) for both Clothing and Hardlines supported by new distribution centres in Slovakia over a footprint totalling 70,000 sq m.
Procurement would be centralised and support local commercial teams under a common supply chain. The UK buying teams would link into international sourcing opportunities.
Tesco and its IT teams worked with a variety of partners, including Oracle and Enabler Wipro, a leading Oracle retail partner.
Tesco's own teams worked with Enabler Wipro, to implement the Oracle Retail Management System, Oracle Financials, a third party Warehouse Management System and integrated with Tesco's current store systems. The team comprised 60 people of 13 nationalities.
The programme was driven by an internal programme leader and Tesco people were released from the business to both deliver and manage, people who championed the development and validated that it would work.
Enabler Wipro personnel worked closely alongside Tesco people until they became inseparable, critical in dealing with problems as they arose and keeping the process simple. Enabler Wipro provided Oracle Retail expertise to all workstreams:
The business process development and delivery Enabler Wipro consultants worked alongside Tesco business process experts to plan the initial project phasing to co-incide with the urgent business requirement to get the Purchase Order buying processes up and running almost immediately. Enabler Wipro expertise enabled the implementation of vanilla Oracle Retail processes whilst still meeting challenging business requirements - essential to a project with such tight timescales.
Integration and Testing - These were particularly challenging workstreams to integrate and test the multiple systems especially in relation to the 3rd party warehouse. A lesson learnt for the subsequent Hardlines project was to ensure the warehouse project team was better integrated.
Change Management - Setting up the new business created massive business process change within Tesco CE and required sensitive change management. Change management was a key workstream throughout the project.
While hard financial benefits have not been declared, Tesco was able to build the systems and processes to support a new £200m business and supply chain able to supply 18,500 lines of own-brand clothing to 250 stores in four countries in Central Europe. It is now able to replenish each of its stores every day. Both stock turn and sell through have been accelerated.
Direct sourcing increased from 25% to 75% of clothing volumes and Tesco was able to rationalise from 1,000 to 75 suppliers.
Lessons learned from Clothing enabled Tesco to develop the infrastructure to support its Hardlines business.
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For further information please contact:
Enabler Wipro
Tel: 0118 902 2300
www.enabler.com |
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