Wal-Mart Stores Supply Chain Operations

This article explores the supply chain process at Wal-Mart to establish whether the company has achieved success in regards to distribution, integration, and operations while still saving on costs. The article utilizes a case study qualitative measurement technique to conclude that the effectiveness of the supply chain management process at Wal-Mart is reliant on specific elements such as good customer and supplier relationships, and consistent communication between the various sections of procurement.

Running Head: WAL-MART STORES SUPPLY CHAIN OPERATIONS 1
WAL-MART STORES SUPPLY CHAIN OPERATIONS
Name
Institution

WAL-MART SUPPLY CHAIN OPERATIONS 2
Wal-Mart Supply Chain Operations
Jawad, S. (2017). A literature analysis of Walmart’s supply chain excellence in term of
integration, distribution and operations.
In this article, Jawad performs a literature analysis of the supply chain process at Wal-Mart to
establish whether the company has achieved success in regards to distribution, integration, and
operations while still saving on costs. In his research, Jawad utilized a case study qualitative
measurement technique. The findings of the study concluded that the supply chain strategy at
Wal-Mart was comprised of a cost leadership method that synchronized supply and demand,
supplier partnership, and customer experience. An outstanding strategy implemented by the firm
is the “Everyday low prices” technique facilitated by an efficient logistic system. Jawad notes
that the company has invested in modern distribution centers and ownership of a large fleet of
trucks to aid movement of goods from manufacturer to distribution centers as well as to lower
costs incurred. Wal-Mart has adopted a system that integrated supplier and customers through
the box bar code whereby suppliers are able to identify products sold and are thus able to restart
the logistic process of manufacturing and distribution of products to the various warehouses
owned by the company. The author concludes that the effectiveness of the supply chain
management process at Wal-Mart is reliant on specific elements such as good customer and
supplier relationships, and consistent communication between the various sections of
procurement.

WAL-MART SUPPLY CHAIN OPERATIONS 3
Mollenkopf, D., Russo, I., & Frankel, R. (2007). The returns management process in supply
chain strategy. International Journal of Physical Distribution & Logistics Management,
37(7), 568-592.
Accordingly, the article aims to investigate the development of returns management in the supply
chain strategy of companies facilitated by a study conducted in five firms. Mollenkopf, Russo, &
Frankel characterize returns management as the activities related to returns including reverse
logistics, avoidance, disposal, and gatekeeping. Returns management is seemingly characterized
as reverse logistics in the supply chain process and is regarded as an important aspect in effective
management of the entire supply chain. This is because effective returns management directly
impacts on the relationship between the company and end-users or consumers, as well as the
reputation of stakeholders. Regardless firms are still struggling with the integration of returns
management in the supply chain strategy as minimal research has been conducted on the process
involved in the handling of product returns. Yet, Mollenkopf, Russo, & Frankel argue that the
functions of logistics, marketing, accounting and finances, and operations are actively involved
in the management of returns. Specifically marketing policies and strategies of a firm
significantly impact on the timing and type of product return consequently influencing the extent
and nature of reverse logistics activities that a firm has to undertake. The authors found that most
American firms place emphasis on cost reduction where the main focus of the returns system is
time-sensitivity of returned goods, which is pertinent in making disposition decisions. In this
regard, Mollenkopf, Russo, & Frankel confirm that the longer it takes to make disposition
decisions, the lower the market value of the returned product in the supply chain. For instance,
Wal-Mart has a strict policy that is time specific on the return of different products with the
longest window period of return been ninety days. Arguably, this assessment indicates the

WAL-MART SUPPLY CHAIN OPERATIONS 4
economic value or impact of returns on supplier and customer relationships with the firm. Using
the qualitative methodology to conduct the study, the authors conclude that returns impacts on
multiple functions of the firm other than cost including customer satisfaction and financial
performance of the firm.
Natto, H. (2014). Wal-Mart Supply Chain Management. International Journal of Scientific
& Engineering Research, 5(1). Retrieved from https://www.ijser.org/researchpaper/Wal-
Mart-Supply-Chain-Management.pdf
The article by Hassan Natto asserts that Wal-Mart’s success as the largest retailers in over 15
countries is attributed to its supply chain process. Accordingly, the company has incorporated
certain functions in the process including purchase of products from wholesale dealers and
suppliers, distribution, and strategic approach to retailing. The company was able to improve its
purchasing power by establishing offices in different location such as New York City, hence
eliminating the role of wholesale dealers and mid-agents. Aside from guaranteeing timely
delivery of products, this strategy has seen the company increase its profit significantly with the
reduction of supplier costs. Natto asserts that successful distribution of the company is aided by
the existence of over 75,000 employees in the logistics department, 7,800 private truck drivers
incorporated in an informative data framework, and 114 dissemination centers throughout the
U.S. The dissemination centers play an integral role in the stocking and circulation of delicate
products. Wal-Mart’s retailing approach includes the use of Just-in-time supply approach, which
emphasizes on the reduction of surplus by failing to stock products that are not in demand at the
time. Application of this strategy has consequently ensured that the company stores only
products that meet customer needs leading to the inevitable growth of the company in the U.S
stock market and market share.

WAL-MART SUPPLY CHAIN OPERATIONS 5
Nguyen, T. T. H. (2017). Wal-Mart’s successfully integrated supply chain and the necessity
of establishing the Triple-A supply chain in the 21st century. Journal of Economics &
Management, 29, 102-117.
The aim of the paper is to conduct an examination of dominant features of the supply chain
process of Wal-Mart that have seen the company earn the title of the leading retailer in the U.S.
Nguyen asserts that the success of the supply chain management at Wal-Mart is centered in the
company’s focus on three major segments of the process namely logistics, procurement and
distribution, and inventory management. A guiding policy for the procurement and distribution
process of the company is, “Everyday Low Prices” whereby the company has eliminated
intermediaries in the procurement process by opting to purchase directly from the suppliers. Prior
to making a purchase, Nguyen confirms that the company enters into a negotiation process with
the manufacturer which entails a discussion on purchase estimates and cost structures. Wal-Mart
has likewise established distribution centers that are segmented into diverse sections where
goods are stocked depending on the quantity. To ensure consistent flow of goods in the center
Wal-Mart has incorporated use of radio frequency identification tags that provide real-time
information on commodities stored in the centers. With these tags, employees have access to
pertinent information such as date product was manufactured and expiry date as well as tracking
movement of goods from manufacturer to the warehouse to stores. Successful transportation of
goods is achieved by the logistics department which hosts a private trucking system. According
to Nguyen, each distribution center is serviced by 3,500 trucks allowing for the timely delivery
of finished goods to the different stores and replenishment of inventory on a weekly basis. A
primary logistic technique utilized by Wal-Mart is the cross-docking technique that allows for
the classification and transportation of merchandise from inbound to outbound trailers and

WAL-MART SUPPLY CHAIN OPERATIONS 6
factories to warehouses. Nguyen concludes that the integration of the three departments has seen
the company establish an efficient supply chain process.
Santos, A. C., Kieckbusch, R. E., & Forcellini, F. A. (2007). Product Development Process
Managing in Supply Chain. In Complex Systems Concurrent Engineering (pp. 775-782).
Springer, London.
The aim of the article is to determine the relationship between product design and supply chain.
Santos, Kieckbusch, & Forcellini state that firms are dependent on the relationship with suppliers
and consumers in the product design process in order to obtain a significant and competitive
market share. Arguably, the process of supply chain commences at the level of product
development since a large percentage of decisions made in this phase of the product life cycle
attribute to the final costs incurred. Hence, the product development phase has significant impact
on the outcome of the supply chain process. In recent years, research has affirmed that supplier
involvement in this phase is beneficial for a company since firms are able to draw on suppliers’
expertise and technical abilities in order to improve product development effectiveness and
efficiency. In this regard, some of the companies that have evidenced collaborative partnerships
with suppliers include Wal-Mart. The company had since created resident institutions for
suppliers in their headquarters where they are actively involved in the design and production of
products together with suppliers. In this case, Santos, Kieckbusch, & Forcellini hold that use of
supplier expertise and knowledge to complement internal capabilities results in a reduction in
costs, concept-to-customer cycle time, and quality problems while improving design efforts. Yet,
in light of these benefits, firms risk to face certain drawbacks including low customer satisfaction
as the sole involvement of suppliers in development would eliminate input of consumers on
product expectation. On the other hand, the authors hold that some firms choose to outsource

WAL-MART SUPPLY CHAIN OPERATIONS 7
products and services in independent and collaborative relationships made with other companies.
In this regard, a firm should utilize information technology resources that allow for real time
connections increasing the company’s efficiency through the reduction of routines and time
taken to execute certain activities.
Sohn, A. P. L., Vieira, F. D., & Casarotto Filho, N. (2013). Important aspects to the
development of the supply chain management to promote innovation. In 3. º Congresso
Internacional do Conhecimento e Inovação.
The article aims to evaluate the relevant aspects to the development of supply chain operations in
order to promote innovation. In this regard, Sohn, Vieira, & Casarotto Filho identify
technologies, human talent, and processes that entail creation of value for consumers as key areas
of focus in planning for the supply chain process. Variables to be considered in the planning
process will in this case range over customer orientation, use of communication and information
technologies, structure, knowledge flow, and degree of relationships with consumers and
suppliers. In the past, logistics aspects including warehouses and transport were given first
priority in planning for supply chain management, however, present-day managers focus on the
management of internal changes as the initial step with the aim of reducing costs. Therefore,
companies should focus on their central competencies in order to transfer productive operations
to customized product and service provision. For instance, Wal-Mart opted to work directly with
manufacturers instead of outsourcing products in an attempt to cut on cost and to maintain
control over the supply chain process of product development. Moreover, manufacturers are able
to conduct operations in Wal-Mart warehouses thus ensuring that the firm can fulfill
merchandise requirement in time. Sohn, Vieira, & Casarotto Filho, therefore, confirm that the
aim of the planning of supply chain operations is to ensure that the supply chain management

WAL-MART SUPPLY CHAIN OPERATIONS 8
process will achieve customer satisfaction while increasing profitability and competency of a
firm.
XU, L., XU, Q., & LIU, X. (2014). Wal-Mart and Carrefour’s Supply Chain Management
Strategies in China. International Journal of Business And Management, 9(7). doi:
10.5539/ijbm.v9n7p155
The article conducts a comparison of the supply chain management process of Wal-Mart and
Carrefour in China in order to identify factors that have led to the success of the two
organizations in the Chinese market. In this regard, the article entails individual analysis of the
supply chain processes of the two companies and culminates with a comparison of the diverse
strategies employed by the two companies. According to the authors, the central focus of the
procurement and distribution process in Wal-Mart is the customer guided by the mantra,
“Customer is the first consideration.” In this case, the company stocks a variety of products to
meet the diverse client preferences and needs. To achieve this, Wal-Mart had deployed specific
approaches in sourcing of finished products. The company had eliminated the role of middlemen
by procuring products directly from manufacturers consequently lowering the cost incurred
while increasing revenue for the firm. Regardless, Wal-Mart maintains collaborative
relationships with the various suppliers through an electronic network and data interchange
system where information is shared to suppliers. By establishing resident institutions for in the
Wal-Mart headquarters, the company ensures that it is directly involved in the product research,
production, quality control, ordering, and delivering process of commodities. The authors affirm
that afterwards the goods are conveyed to the different distribution centers where they are
upgraded and repacked according to the requirements of each sub-branch where they will be

WAL-MART SUPPLY CHAIN OPERATIONS 9
stocked ready for sale. Ideally, this strategy is referred to as “zero inventory” which maximizes
on saving warehousing costs while reducing distribution and marketing costs.

WAL-MART SUPPLY CHAIN OPERATIONS 10
References
Jawad, S. (2017). A literature analysis of Walmart’s supply chain excellence in term of
integration, distribution and operations.
Mollenkopf, D., Russo, I., & Frankel, R. (2007). The returns management process in supply
chain strategy. International Journal of Physical Distribution & Logistics Management,
37(7), 568-592.
Natto, H. (2014). Wal-Mart Supply Chain Management. International Journal of Scientific &
Engineering Research, 5(1). Retrieved from https://www.ijser.org/researchpaper/Wal-
Mart-Supply-Chain-Management.pdf
Nguyen, T. T. H. (2017). Wal-Mart’s successfully integrated supply chain and the necessity of
establishing the Triple-A supply chain in the 21st century. Journal of Economics &
Management, 29, 102-117.
Santos, A. C., Kieckbusch, R. E., & Forcellini, F. A. (2007). Product Development Process
Managing in Supply Chain. In Complex Systems Concurrent Engineering (pp. 775-782).
Springer, London.
Sohn, A. P. L., Vieira, F. D., & Casarotto Filho, N. (2013). Important aspects to the development
of the supply chain management to promote innovation. In 3. º Congresso Internacional
do Conhecimento e Inovação.
XU, L., XU, Q., & LIU, X. (2014). Wal-Mart and Carrefour’s Supply Chain Management
Strategies in China. International Journal of Business And Management, 9(7). doi:
10.5539/ijbm.v9n7p155