Tesco admits failures

Tesco's failure rate at making factory gate collections from suppliers is "unacceptable", the chain's commercial director has admitted.

While the timeliness and reliability of pick ups by Tesco-nominated trucks was no worse than when suppliers were delivering their own product or using third-party hauliers, the Tesco service was not always a great deal better, conceded Richard Brasher, speaking at a logistics conference last month.

"The primary distribution network [between suppliers and distribution centres] isn't optimised yet", he said. "I'm basically not in a position to say that Tesco is offering the most competitive rate and always turns up at factories or depots on time"

More than 65% of goods bound for Tesco's distribution centres were now arriving on Tesco's own lorries or trucks run by contractors, he said. Suppliers operating on this basis with Tesco were selling their goods at factory gate prices, without distribution costs built in.

He added: "I want to assure suppliers that it is an absolute priority for me to tackle this. I want to have honest and open discussions with suppliers to improve the situation"

Those in the audience declined to comment publicly on Tesco's factory gate collection service, but the md at one leading branded supplier said: "Tesco's distribution systems on the ground are not quite as efficient as they appear on paper"

Meanwhile, Tesco is launching a web-based information portal to help suppliers plan production more effectively to service demand.

Tesco Link, which is being piloted with 10 of the retailer's suppliers, contains store-specific electronic point of sale information plus data on stock levels throughout Tesco's supply chain and depot network, said Brasher.

He said: "This is the next generation of Tesco Information Exchange [a similar information portal] that suppliers can access through a secure password, but it provides extra granularity of information. It's also free"

Suppliers welcomed the initiative. "Anything that improves the accuracy and timeliness of information on demand patterns at our customers is a good thing", one planning manager commented.

"The problem with many of these systems historically is that the information isn't accurate enough, detailed enough, or up to date. It can also take ages to plough through if you're logging on to a different data portal for each major customer"