Question

What were the supply chain management processes adopted by wal-mart and how far they were effective? Discuss. Also discuss drivers of supply chain used by wal-mart?

Answer 1

Answer:

A supply chain is a system of organisations, people activities information and resources involved in moving a product or service from a supplier to customer.

Answer 2

Answer:

Over the past twenty years, Walmart has become the world’s largest and arguably most powerful retailer with the highest sales per square foot, inventory turnover, and operating profit of any discount retailer. The organization has become synonymous with the concept of successful supply chain management.

1. Walmart inventory: Walmart began with the goal to provide customers with the goods they wanted, whenever and wherever they wanted them. The company then focused on developing cost structures that allowed it to offer everyday low pricing. Next, Walmart concentrated on developing a more highly structured and advanced supply chain management strategy to exploit and enhance this competitive advantage and assume market leadership position.
2. Fewer links in the supply chain: Even in its early years, Walmart’s supply chain management contributed to its success. Walmart’s supply chain innovation began with the company removing a few of the chain’s links, right from the very beginning. Founder Sam Walton, who owned several Ben Franklin franchise stores before opening the first Walmart in Rogers, Arkansas in 1962, selectively purchased bulk merchandise and transported it directly to his stores.
3. Under a Walmart’s supply chain initiative – called Vendor Managed Inventory (VMI) – manufacturers became responsible for managing their products in Walmart’s warehouses. As a result, Walmart was able to expect close to 100% order fulfillment on merchandise.
4. In 1989, Walmart was named Retailer of the Decade, with distribution costs estimated at a mere 1.7% of its cost of sales – far superior to competitors like Kmart (3.5%) and Sears (5%). The company’s supply chain has only become more effective since then.
5. Walmart inventory innovation:
6. Walmart has long practiced strategic sourcing to find products at the best price from suppliers who are in a position to ensure they can meet demand. The company then establishes strategic partnerships with most of their vendors, offering them the potential for long-term and high volume purchases in exchange for the lowest possible prices.
7. Furthermore, Walmart streamlined supply chain management by constructing communication and relationship networks with suppliers to improve material flow with lower inventories. The network of global suppliers, warehouses, and retail stores has been described as behaving almost like a single firm.