Supply Chain Management at Walmart

Added on - 16 Sep 2019

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ContentsBackground of Walmart..............................................................................................................................2Supply chain management at Walmart........................................................................................................3Models of supply chain management..........................................................................................................4Support activities.........................................................................................................................................8Human resource management..........................................................................................................8Technology development.................................................................................................................8Firm Infrastructure...........................................................................................................................9Procurement.....................................................................................................................................9Kraljic portfolio purchasing model............................................................................................................10Strategic Positioning..................................................................................................................................12Two bin system in inventory management................................................................................................13Waste management....................................................................................................................................14Structural/ strategic decisions in physical distribution...............................................................................15Tim wood value added activity..................................................................................................................16CSR/ sustainability/ modern slavery and ethics.........................................................................................18Challenges.................................................................................................................................................19Recommendations.....................................................................................................................................20Conclusion.................................................................................................................................................21References.................................................................................................................................................231
Background of WalmartWalmart deals with the retail business in all apparels, housewares, electronics and food and non-food products and services. The successful operation of this organization makes this store theworld’s largest retail store chain and this company has approximately 11,453 stores worldwide.This retail store is founded by legendary Sam Walton in the year of 1962 and before he started,Sam Walton owned a chain of stores in the US. The main aim of Walmart is to offer the productsand services according to the needs of customers either it’s related to housewares, electronics,clothing and general services. Walmart is serving more than 138 million people every week inthe world. The Walmart main motto at the time of establishment was ‘lower price anytime,anywhere’ and this is unchanged from 1962. Moreover, customers used to call this store theDiscounting Store. As per the records of financial report in 2015, the company achieved revenueof $485.7 billion and approximately 1.8 million employees are working in 50 states stores aswell all the international stores in Argentina, Mexico, Brazil, and Canada etc. across the world.The market Capitalization of this retail store is around $195 billion as of December 2015[ CITATION CLu14 \l 1033 ].Mission- The mission of the Walmart is low price every day and also the other mission is toprovide the best online shopping experience for the customerswith the use of technology and togive customers a huge variety of products at low prices with guaranteed satisfaction and friendlyservice on convenient hours. Sam Walton takes care of the quality work and the needs of thecustomers.The main focus of Walmart is to provide the best quality services to its customers sothat they will visit and shop in this departmental store again and again. The goal of the Walmart2
is to make the life of customers easy by the way of offering quality services at reasonable pricesand fulfill the needs of the clients whatever they want.Supply chain management at WalmartSupply Chain Management plays a very significant role in the success of Walmart becauseInventory management models help the company to find out the quantity of stock that isdelivered to the retail stores twice of every week and this stock is very limited and it’s veryimportant to check that each store is getting the required stock what they want. This quickservice of shipment of stock is easy and feasible for Walmart because production houses aresituated near to Walmart distribution headquarters. Inventory is managed by the workers andthey are taking care of in how many batches the stock is to be delivered and what should be thequantity.The individual’s needs are dynamic and keep on changing from time to time, so it isrecommended to analyze their demands. Several methods can be adopted to know their needs,for an example, a questionnaire method, surveys, personal interview, etc. This can be done byappointing professionals and trained employees to collect the data of employees and motivatethem accordingly using such methods.All individuals are different and come from a differentbackground so this is why their choices vary[ CITATION The03 \l 1033 ].There are some issues that can arise at the time supply chain management, these issues are:-1.Movement and storage of raw materials: Since the raw materials are delicate and thestorage has always remained an issue in the perfume industry, it becomes difficult for thecompanies to handle fragile materials.3
2.Work in process inventory: The next problem which the perfume industries encounter ismanagement of work in process inventory and maintenance of true and accurate data[ CITATION LMa14 \l 1033 ].3.Goods to be supplied from point of origin to consumption: The process of supplyinggoods from point of origin to consumption is quite a cumbersome process and involvesmany intermediaries which make the whole system very slow[ CITATION Fla15 \l 1033 ].The issues that are visible are related to the logistics and SCM in the Walmart. The suitablestrategic approach should be planned to face suitable conditions. The two strategies are identifiedon the wide levels that are identified as the strategic supply chain management and the Just inTime Policy. Both these policies are helpful in defining the suitable approach in the specificdirection and with the help of these aspects; it could become easier to manage the perspectivesand issues related to the SCM. Both these strategies are well organized, managed, object orientedand focused in nature. The quantifiable strategy is also considered in respect to Walmart tomanage the aspects in a suitable way[CITATION Wal14 \l 1033 ].Models of supply chain managementApart from all, the maintenance of the customers’ goods and logistics in an appropriate manneris also identified as the best function carried out by the strategies defined for SCM. For makingthe smooth flow of supply chain management and to manage logistics, the retail supermarketbrand introduces its various innovative projects in France, New York, Sydney and Melbourne.To attract the customers, the brand also merges with the other retail markets. These products aresuccessful in managing their brand identity worldwide and in the retail market of UK. Thismerger not only helps in supporting the organization in making the financial aspects successful,4
but by this, the logistics and supply chain management of the organization can also bemaintained in the right direction[ CITATION XuL14 \l 1033 ].1.Porter’s Value ChainTalking about the First tool of Supply Chain management is thePorter’s value chain Modeland the five forces model was developed by Micheal Porter to analyze the competitiveenvironment in which a product or company works. Porter’s model is the number one tool ofsupply chain management and it can be well explained with the help of the following figure:[ CITATION Uni168 \l 1033 ]5
New Market Entrants:For Walmart there is no threat of new entrants. The reason for this lowthreat is that the costs for Marketing, production, and distribution are already divided over unitsof production that lowers the cost of production. For new entrants it is not an easy task as it isvery difficult for them to compete and achieve its aim as in the starting point, the huge amount offunds or investments are needed to enter into the industry[ CITATION Man09 \l 1033 ].Supplier Power:There are lots of people in the retail business who supply the raw material inthe retail industry and the raw materials are adequate and can be offered to the many risingcountries. Due to this reason the bargaining power of suppliers is low.Buyers Power:The bargaining power of buyers of Walmart is reasonable as Walmartcustomers’ switching cost is low and the products offered by Walmart are at affordable prices. Inthe Retail business, the customer is the only one that is very flexible in choosing the Store acrossa number of other brand retail stores. The High Brand Loyalty of Walmart also the lowpossibility of customer integration is the reasons of lowering the bargaining power of buyers[ CITATION Cra08 \l 1033 ].Development of Substitute Products:In this competitive industry, there is always a high threatof substitute products. There are many substitutes or can say competitors of Walmart that are athreat to this Retail industry like Sainsbury, Costco Corporation, Tesco PLC, Metro Group,Home Depot corporation, Kroger, Amazon company etc. the Sam said, for him the biggestcompetitor is Costco Corporation and because of this, high availability of substitute or6
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