Walmart Case Study
WAL-MART CASE STUDY
Based on Wal-Mart’s competitive strategy, what should their supply chain emphasized in order to achieve strategic fit, responsiveness, efficiency or both? Why?
Wal-Mart’s competitive strategy: Provide high availability of a variety of products of reasonable quality at low prices.
Wal-Mart’s supply chain should emphasize the need to reduce its purchasing and handling costs to maximize efficiency, this way it can offer the best price to its customers. Wal-Mart ensures the lowest prices by establishing a long-term relationship with suppliers and vendors, taking advantage of economies of scale, and bargaining prices until satisfied. It should also maintain an appropriate level of responsiveness by managing time of replenishment in an efficient manner to guarantee the availability of its products and offering a variety of services and products to retain customer’s trust.
What key process in their supply chain strategy relates to the internal supply chain management (ISCM)? …to the supplier relationship management (SRM)?
ISCM:
Their transportation system, distribution logistic and information exchange allows them to approximately match demand in a timely and efficient manner.
Wal-Mart locates its stores around a distribution center located at different geographical locations to facilitate replenishment; this ensures a fast, steady and frequent flow of products. It also runs its own fleet, giving them control over time (delivery schedule) and shipping cost. Wal-Mart also introduced the use of “cross-docking” system. Merchandise is picked up by Wal-Mart’s truck directly from the supplier or manufacturing plant at the cross docking facility, sorted out and delivered to the respective distribution center. Then, from each distribution center, goods are delivered to each store. This process are strictly monitored for scheduling compliance and conducted by well trained drivers.
The use of information technology and communication systems has helped facilitate large scale operations, like tracking sales and merchandise inventories in stores. Wal-Mart’s use of information technology links suppliers with its stores and distribution center for inventory maintenance through an automated re-ordering system which identify when an item is low in stock and signal the supplier for re-supply; the use of Bar Code system, RFID, Point-of-sale terminals enable accurate distribution of goods, keep track of sale data and storage of information; and large-scale satellite that allows the exchange of information and communication between its facilities and suppliers.
SRM:
Wal-Mart selects suppliers on the basis of