Case Brief Half a Century of Supply Chain Management at Wal-Mart

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CASE 1 BRIEF: Half a Century of Supply Chain Management at Wal-Mart

INTRODUCTION

Walmart Stores Inc. is a company based in the Bentonville, Arkansas and was founded by Sam Walton in 1962. By 2011, it was the leading retailer company with over two million employees and 8500 employees in fifteen countries. Walmart had begun as a discount store format but have grown over the years to include large supercenters such as supermarkets, groceries, apparel stores, restaurant and wholesale outlets. It was known to be serving over two hundred million customers weekly in the year 2011. The organization’s main objective was to put up an all-inclusive variety of services and products at a low cost. Walmart was popularly known for its discount house which provided products that included housewares, small appliances, electronics hardware and apparel. Over the years, more companies have come up copying the management style of this company a thing that has posed a competitive threat. Such organizations were known to offer similar products and services such as specialty retailers, general merchandise and online retailers.

PROBLEM STATEMENT

The company was facing the problem of increasing competition from companies that were offering similar services and products. Such companies include Target Co., Safeway Inc., Amazaon.com, Kruger Co. and Sears Co. The organization was also faced with chain supply issues like products pick up and defective products.

SITUATIONAL ANALYSIS

In an organization, Supply Chain Management is in charge of ensuring and organizing the supply of different products by controlling their flows. Most organizations are known to put their operations on Supply Chain Management to manage their supplies. They are reported to be considering their supply chains as a competitive advantage. Managing a chain supply management is always essential for better organizational benefits. For instance, supply chain has made it easier for companies to deliver commodities to their customers fast and effectively. It is also reported to be effective for saving costs for all parties; that internal and external parties. However, with the advancement in technology organizations are required to redesign their supply chain in order to cope up with the new environment. The whole system of supply chain of logistics and inventory, distribution and procurement should be considered when managing the supply chain.

Walmart is and has been the world’s best retailer. It is a successful company with its cost-effective, high integrated supply and fast supply chain. The company’s supply chain management plans has been a competitive advantage over the years which has enabled it maintain a sustainable competitive advantage over its competitors. However, with the current technological advancements, the company need to redesign its supply chain to meet current demands of the supply chain. This is because by managing the chain supply, Walmart would be in a point to effectively compete with their close competitors. This would also ensure that the supply chain is cost-effective, fast and that would have traits such as adaptability and agility.

RECOMMENDATIONS

Walmart’s main strategy was to gain a competitive advantage over its competitors. This would be achieved by providing quality goods and services at cost that most customers could afford. In order to achieve this strategy, Walmart was recommended to make use of the new trend of discounting product off the retail cost that is recommended. The company was also recommended to go as per the “Everyday Low Prices” (EDLP) program that would ensure that that quality products were provided at low prices. In addition, the distribution centers of the

In addition, in order to successfully manage the supply chain and achieve a competitive advantage, the Walmart Company was supposed to meet three segments of recommendations. The three segments that fall within the supply chain and that Walmart was supposed to take into consideration were: procurement and distribution, logistic and inventory management. The company was also recommended to make use of information technology for ensuring that the supply chain is effectively managed.

IMPLEMENTATION PLAN

Procurement and Distribution: Walmart came up with the decision of doing away with middle men and deal with the suppliers directly to acquire the products they needed. This was in accordance with to the ‘Everyday Low Costs” policy. Moreover, before any procuring a product Walmart also decided to always negotiate with manufacturers their structure of cost and come up with purchasing estimation. Walmart also ensured that their different distribution centers and whose locations are different were divided into section as required by quantity of product. The process of procurement and distribution was made easier by use of the RFID technology. This technology has also made it easy for employees to get real time data about a product stored in distribution centers.

Logistics: Walmart had implemented a strong transport system with more than 3,500 trucks that helped out in distributing their products. The trucks made the shipment of goods take the shortest time possible. Walmart also implemented cross-docking logistics method that make distribution of products efficient. Moreover, the company also came up with a satellite network that brought great benefits.

Inventory management: the organization came up with an information system which made the inventory management much more effective. The company implemented the Information Technology and used it to monitor the inventory level. The systems they used would require the customer to put their specification and it would display the products according to the demands of the customers. Furthermore, the company would computers to connect with their vendors. RFID technology can also be used to help in managing inventory since one can be in a point to know the amount of inventory goods without having to count.