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Walmart: Supply Chain Management
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Supply chain management review
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Wal- Mart has been considered one of the most successful companies in dealing with the challenges of supply chain management. They are known for supplying cheap products to a market of individuals primarily interested in saving money. Though some could argue that Wal-Mart’s presence has been to the detriment of local owned and operated stores, this situation has been observable around the country. Taking a holistic view, one may define a supply chain to include all activities required to bring a product to the market (Modi, S. B. 2006). Wal-Mart is so successful because of their dominance of the supply chain from the manufacture process through when the consumer purchases the product. Thus supply chain capabilities are defined as a firm’s ability to build, integrate, and reconfigure its upstream supply chain, internal operations, and downstream supply chain to address rapidly changing market needs (Modi, S. B. 2006). It is known that Wal-Mart uses both above the line initiatives as well as below the line initiatives to bring product to their customers and create enormous profits for themselves. They are admired not only because they have the biggest selection of products, but because they excel at managing the flow of materials and information from the source of supply to the end user. Inter-organizational systems are presented as a vehicle that can enable firms to achieve the objectives of total awareness in the supply chain (Saeed, K. A. 2004). Wal-Mart could use the following actions to manage the above and below the line initiatives. Choosing the right mode of delivery definitely would have a large impact on the bottom line. Not all items need to be sent by overnight delivery. Using your SCM system to identify it... ... middle of paper ... ...ccountid=38569. (305335246). Saeed, K. A. (2004). Information technology antecedents to supply chain integration and firm performance. (Order No. 3157187, University of South Carolina). ProQuest Dissertations and Theses, , 187-187 p. Retrieved from http://search.proquest.com/docview/305118728?accountid=38569. (305118728). Agan, Y. (2005). A resource-based approach to supply chain integration. (Order No. 3167489, The University of Memphis).ProQuest Dissertations and Theses, , 127-127 p. Retrieved from http://search.proquest.com/docview/305351174?accountid=38569. (305351174). Knipper, M. E. (2011). Developing an integrated supply chain costing approach for strategic decision making. (Order No. 3436534, University of North Texas). ProQuest Dissertations and Theses, , 190-n/a. Retrieved from http://search.proquest.com/docview/818457301?accountid=38569. (818457301).
W.C. Benton, Jr., 3rd Edition, “Purchasing and Supply Chain Management.” (2010). Text. 2.
Supply chain innovations should ensure on-shelf availability at retail outlets, improving collaboration between vendors and retailers, translating supply chain costs to product pricing, lean inventory and real time replenishment. Wal-Mart should ensure that process differentiation to determine the right method of moving products with varying demand characteristics (Akehurst, C., & Alexander, N. (1995)
In the 1960s through the 1970s, companies realized strong engineering, design, and manufacturing functions were strong market strategy keys to create and capture customer loyalty. As the demand for new products rose in the 1980s, these market requirements were to increase their flexibility and responsiveness to adapt existing products and processes or to develop new ones in order to meet customer needs. As manufacturing improved in the 1990s, managers began noticing material and service inputs involving suppliers and their major impact on an organization’s ability to meet customer needs. As a result of these changes, organizations now find that it difficult to manage their own organizations. First, they must be involved in the management of their network of all upstream firms that provide directly or indirectly, as well as the network of downstream firms, which are responsible for delivery and market service of the product to the end customer. In order to succeed, managers have to realize that they cannot do it alone and they must work together on a daily basis with the whole organizations in their supply chains. Because supply chain management involves all functions within an organization, managers need to know what a supply chain is, why it is important, and the impact of supply chain management on the success and profitability of their organization. Today, Wal-Mart topped the list of the America’s biggest companies on the Fortune 500 list, “with sales of almost $345 billion — more than a quarter of a trillion dollars” (Forbs). Wal-Mart’s supply chain management is becoming recognized as a core competitive strategy.
Through Wal-Mart’s use of information systems that can instantly access and analyze each stores orders, inventory levels, and sales in real time, it achieves significant cost savings (Jurevicius, 2013). This is one of the most important factors in Wal-Mart’s success. Wal-Mart offers both branded and own label products at much lower prices than competitors do (Jurevicius, 2013). Customers are mainly attracted to Wal-Mart because of their wide range of products and services for a low
Ferdows, K., Lewis, M., & Machuca, J. A.D., 2003. Zara. Supply Chain Forum: International Journal, 4(2), 62-66.
The two supply chains of Walmart and Amazon are different from each other and are best at their own perspective. The Amazon’s supply chain is completely based on online retailing whereas the supply chain of Walmart is based on “bricks and mortar”
In the current business environment, Supply Chain Management is experiencing a period of rapid change and influence within organizations. It is no longer simply about reducing costs, but more importantly, it is about enhancing business value and embracing proven disciplines to leverage the supply chain for competitive differentiation, financial return, and demand driven operational and innovation excellence. Sears Holdings Corp.’s supply chain operations always tries to improve to meet the company’s needs in a different location, but also customers in matter of delivering the items in short time. Sears has piloted a few new supply chain models that leverage existing inventory and existing retail distribution centers, meaning a small number of store locations now fulfill online orders, and to help the company manage its distribution network. Which include forty five distribution centers and a hundred market delivery operation sites for cross-docking to ensure its almost two thousand and five hundreds retail locations remain stocked and that online orders are fulfilled. Sears now is able to ship products to about 85% of the country in two days or less. This is accomplished by making the delivery process predictable, focused and tightly controlled while simultaneously applying supply chain best practices through experienced industry professionals.
In particular, Wal-Mart competes with other well-established online retailers such as Amazon. For online competitors, Wal-Mart differentiates itself by optimizing its supply chain and ensures that consumers can access the goods they need conveniently and promptly. Wal-Mart’s idea is to collaborate with its vendors by allowing the providers to manage their products in its warehouses. The program, known as Vendor-Managed Inventory (VMI), gives the suppliers the power to track their goods and replenish them promptly (Shin and Tucci 37). In doing so, Wal-Mart has gained global recognition as a retailer whose store will always have what the consumers want on the shelf. The unique reputation has made Wal-Mart a case study for other retailers that wish to improve their supply chain through strategic
Wal-Mart is known to beone of the best supply chain companies in the world. Throughout the years Wal-Mart has adapted strategies that keep up to their name. Unlike many retailers, Wal-Mart purchases goods directly from manufacturers, skipping a few steps of the supply chain cycle. Buyers use advanced negotiation skills to make sure they are receiving the best price on purchases. Wal-Mart also has their own trucks picking up from warehouses, reducing the price significantly on transportation. Long term relationships with vendors are extremely emphasized to understand prices and cost structure. These practices build Wal-Mart to its name and keeps low prices for retail customers all over the world. Supply Chain studies have shown that in 1998, Wal-Mart would fill up stock in 2 days compared to their competitors which would complete it in 5. Part of the reason Wal-Mart would replenish so
Lean manufacturing and just-in-time processing are great business strategies that can severely stress a supply chain. The supply chain and supply chain management is a critical operations management element for any major company to succeed and remain competitive in the global market. The supply chain is one of many pieces critical to maximizing value to the end customer and requires close management to minimize external impacts. If a company is relying on another company to supply the raw materials needed for their production line, then impacts to this other company could impact their supply chain. Careful risk management is needed to optimize performance. As a company expands into global markets and global suppliers, this risk and management challenge is multiplied. The global nature of the company could impact important activities such as transportation, funds transfers, suppliers, distributors, accounting and information sharing. Disruption to the supply chain can significantly reduce revenue, cut market share, inflate costs and threaten production. A major disruption would have obvious impacts to profit, but could have additional intangible impacts to the credibility of the company if products are not delivered on time.
Supply chain management has been defined as that process that involves the management of information, materials, and all the finances that are handled within and across the entire supply chain process (Christopher, 2016). The management is usually done through out the entire supply chain management from that moment when the suppliers are involved through all the manufacturing activities, different distribution activities, and the way that the products are served to the final product consumer (Turban, et al., 2002). The process also includes all the activities that different organizations offers to their customers as after sale services for purposes perfecting their services and products towards their highly valued customers (Christopher,
Walmart’s ownership and execution of the supply chain is a core competency that sets them apart from the competition. They have minimized the turnaround time to replenish inventory back into the stores. They also have agreements with suppliers to deliver products direct to the stores. Walmart owns 158 distribution centers strategically located in close proximity to many Walmart stores. The distribution centers employ 7,000 truck drivers to deliver truckloads of merchandise to the 10,700 retail stores with their tractors and trailers, as the inventory system dictates.
Generally, a superior supply Chain is an important and unique source of competitive advantage. Its importance is especially illuminated in Multinational companies such as Toyota. Putting this into consideration, the question that now begs for an answer is whether Toyota’s supply chain is effectively serving the organization. Without a doubt, Toyota ha...
Supply Chain Management (SCM) is the management and control of the flow of goods. It includes the movement and the storage of raw materials, work-in-process inventory, and also finished goods from the origin to the consumption. SCM has been defined as “design, planning, execution, control, and also monitoring of supply chain activities with the goal of creating net value, building a competitive site, leveraging global logistics, combining supply with demand and measuring performance universally” 1. As part of my task, I will discuss the topics of logistics, communication within the supply chain, such as, information systems and Electronic Data Interchange (EDI), relationships with partners, the environment of SCM and the marketing channels and process. My objectives are to inform you how the process of SCM works, how it enables profitable growth and enhances customer satisfaction. SCM creates all positive outputs, according to the Journal of Operations and Supply Chain Management, results showed positive effects of SCM on all performance dimensions, backed-up by the resource-based and relational views of strategy 2.
Coyle, J., Langley, C., Gibson, B., Novack, R. and Bardi, E. (2008).Supply Chain Management: A Logistics Perspective. 8th ed. Cengage Learning, p.366.