Wal-Mart’s Supply Chain Analysis

This paper analyzes the supply chain strategies and inventory management systems adopted by Wal-Mart for continued success.

Running head: WAL-MART’S SUPPLY CHAIN ANALYSIS 1
Wal-Mart’s Supply Chain Analysis
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WAL-MART’S SUPPLY CHAIN ANALYSIS 2
Contents
Executive summary.....................................................................................................................................3
Introduction.................................................................................................................................................3
Wal-Mart Mission, Vision and Strategic Goals...........................................................................................4
Mission....................................................................................................................................................4
Vision.......................................................................................................................................................4
Strategic Goals.........................................................................................................................................4
Supply Analysis...........................................................................................................................................5
Operational Analysis...................................................................................................................................5
Information Analysis...................................................................................................................................6
The design of goods and services............................................................................................................6
Quality Management of the Organization...............................................................................................7
Integration Analysis....................................................................................................................................7
Technological influence on supply chain.................................................................................................7
The Universal Bar Code......................................................................................................................8
Use of Radio Frequency Technology...................................................................................................8
Magic Wand Technology....................................................................................................................8
Sustainability Analysis................................................................................................................................8
Inventory Management in Wal-Mart.......................................................................................................8
Discussion of Company’s Procurement and Supply Chain Analysis...........................................................9
The Supply Chain Strategy.......................................................................................................................9
The Effect of Globalization on Wal-Mart...............................................................................................10
Improvement Programs and how they help in Achieving Vision, Mission, and Strategic Goals...............11
Expansion into the Asian market...........................................................................................................11
Emphasizing the diversity programs......................................................................................................11
Continuous training and development..................................................................................................11
Strengthen bonds..................................................................................................................................11
Conclusion.................................................................................................................................................12
References.................................................................................................................................................13

WAL-MART’S SUPPLY CHAIN ANALYSIS 3
Executive summary
Wal-Mart is one of the leading retailer all over the world. Their successful supply chain
management coupled up with proper management has been among the major factors that have
contributed to this success. This paper seeks to analyze the supply chain strategies and inventory
management systems that have been adopted by the organization in a bid to achieve continued
success. Ideally, it will seek to acknowledge the impacts of its inventory management trends
regarding the competition. Moreover, the paper will lay down the effect of globalization on the
supply chain and success of the company in general. This report aims to identify the strategies
that have been adopted by Wal-Mart in a bid to achieve global recognition. In addition to that,
there will be an explanation of how the technological advancement has led to improvement of
the supply chain management in the company. The paper also gives recommendations that
should be embraced by the organization so that there can be continued success in all its
operations.
Introduction
Wal-Mart is a retail corporation that operates multinational. It is considered to be among
the fastest growing companies regarding supply and retail management. There is a huge
prevalence of the organization all over America and Latin America. It is therefore considered to
be the leader in the retail business all over America and beyond. For Wal-Mart to be able to meet
all their global demands, it is essential that it brings into force an effective supply chain
management that will help it oversee all their activities easily. Supply chain management is
considered to be a very complex process that involves the utilization of great management skills
so that the wrong decision is not made that would affect the productivity of a firm. A corporation
needs to have an effective communication channel and cooperation with their suppliers so that it

WAL-MART’S SUPPLY CHAIN ANALYSIS 4
can have a competitive advantage. Through this, the products of an organization can easily reach
out to their preferable markets, thus enhancing consumer loyalty. The consumer spending habits
of customers determine how the retail industry will perform in the long run. Therefore, an
organization has to make the right choice of supplier and procurement methods so that it will
meet the needs of their clients as they are required.
Wal-Mart Mission, Vision and Strategic Goals
Mission
Wal-Mart’s mission is “To save people money so they can live better” The mission has
been met by the introduction of friendly prices to their products (Ferguson, 2019). For instance,
the marketing mix allows the company to adjust its costs accordingly so that more customers can
be attracted. Ideally, this is a way of gaining a competitive advantage over other retailers.
Vision
The vision statement of Wal-Mart is “Be the Destination for customers to save money, no
matter what they want to shop” This vision was articulated in the year 2017 during the investor
community meeting hence disregarding the previous vision that was “To be the best retailer in
the hearts and minds of consumers and employees” (Ferguson, 2019). According to the vision
statement, there is clarity that the organization invests heavily in achieving customer satisfaction
even with the changing economic regimes.
Strategic Goals
The company has three strategic initiatives. These are:
1. Save Money, Live Better
2. Win, Play, Show
3. Fast, Friendly, Clean

WAL-MART’S SUPPLY CHAIN ANALYSIS 5
Supply Analysis
The supply chain innovation of Wal-Mart began a couple of years ago when the company
removed some chain links (Robinson, 2015). The founder would purchase in bulk and directly
transport the products to the stores. Later, the company began sourcing directly from
manufacturers in a bid to cut the costs involved as well as be able to manage their supply chain
much effectively. There was an establishment of a supply chain initiative referred to as Vendor
Managed Inventory that allowed managers to become responsible for the management of the
products. Therefore, Wal-Mart was able to receive maximum fulfillment. Over the years, the
company’s supply chain has become more effective (Robinson, 2015).
According to(Robinson (2015), strategic sourcing has been implemented in finding
products from the suppliers at the best prices possible with an ability to meet demand. The
organization has managed to establish strategic partnerships with its vendors hence they can
obtain more purchases in the future (Ngunyen, 2017). The supply chain management of the
organization was also streamlined through the establishment of strong relationships and
communication with the suppliers in a bid to improve the flow of materials. Since the founding
of the company, it has established its place in the market. The supply chain strategy that Wal-
Mart has established is one of the major factors that has ensured the continued success of the
firm. Their status of being a leader in the private sector has been supported by effective
procurement and supply chain management strategy (Ngunyen, 2017).
Operational Analysis
The operations management of Wal-Mart is based on several approaches that are aimed
at the efficient management of the supply chain and inventory control. They also aim at ensuring
the improvement of the number of sales (Smithson, 2017). The effective performance of

WAL-MART’S SUPPLY CHAIN ANALYSIS 6
operations in the company partly determines the success of the company. There is a great
network among global suppliers, retail stores, and warehouses in a way that they act as a single
firm. In consideration of the retail industry, Wal-Mart is the global leader. The decisions made in
operations help the managers to prioritize on the objectives of the business. Through
prioritization, the significance of each decision’s effectiveness is brought to the limelight. Th se
decisions utilized in operations are applied together with other approaches that are aimed at
emphasizing inventory management, supply chain management, as well as sales and marketing
(Smithson, 2017). Company owned vehicles and trucks are used to distribute the products of the
company hence ensuring that there is reliability and convenience logistics from one place to
another (Smithson, 2017). Therefore, efficient logistics is strength to the organization since
people can rely on them at all instances. Wal-Mart currently aims at enhancing its operational
know how. The company has been able to gradually achieve this with the company realizing
high sales figures, especially after the year 2000. Apart from being the second biggest retailer on
the globe in regards to sales, the company’s performance in regards to its brand image, strategies,
and success factors has been exceptional.
Information Analysis
Getting the right information has been something that has boosted the operations of the
organization. There are ten decision-making areas that are analyzed in operations management
before implementation of any change. They include:
The design of goods and services
This revolves around designing goods strategically about its characteristics. Regarding
Wal-Mart, the goods and services are designed strategically to maintain the image of the
company in the market. The goods and services of the company are modeled in a design that they

WAL-MART’S SUPPLY CHAIN ANALYSIS 7
are attractive to the customers. Wal-Mart, in designing the products, takes into consideration
costing (Smithson, 2017). Through low costing, they are able to maintain cost leadership which
is a competitive advantage. In designing its products, Wal-Mart highly focuses on minimizing
production costs, particularly its Great Value brands. For instance, they make sure to design their
products in a manner that eases mass-production.
Quality Management of the Organization
Wal-Mart gives priority to quality standards by focusing on three tiers. These are the
specification of the minimum quality expected by their customers, specifying the expected
market quality, and exceeding the quality level that is expected in the market place (Smithson,
2017). Through the utilization of these three tiers, Wal-Mart is able to achieve quality at all their
different levels of the organization. The other decisions include capacity and process design
where there is behavioral analysis and evaluation, strategic location, supply chain management,
strategic layout design, inventory management, human resource management, organization
maintenance, and scheduling (Joo, Seo & Min, 2018).. The specific details related to the logistics
management of Wal-Mart are linked to the encompassment of fast, convenient, and responsive
transportation systems.
Integration Analysis
This incorporates the use of technology in the organization.
Technological influence on supply chain
Technology has a lot of influence on any industry. Wal-Mart integrates with technology
to help them foster great operational processes in its supply chain management. Wal-Mart is
considered to have one of the best information technology systems in its organizational structure.
The supply chain is, therefore, well managed to accomplish the needs of the organization.

WAL-MART’S SUPPLY CHAIN ANALYSIS 8
There are various technologies that have been incoporated by Wal-Mart in ensuring that
the supply chain is effective. These include:
The Universal Bar Code
This was the initial innovation to be implemented by the company. The main objective of
the code was bringing about change in the retail industry in terms of labeling. This technology
enhanced the business process of the organization. Any information that is needed by the
organization is displayed by the code.
Use of Radio Frequency Technology
Wal-Mart adopted the technology to help them pass relevant data within and beyond their
system. This technology is important in the retrieval process when need be. Therefore, losing
data is not easy while using this technology.
Magic Wand Technology
Wal–Mart has adopted the use of this handheld device in all their stores worldwide. The
device is strongly linked to the computers of the company and usually uses the point of sale
system. Its integration is very helpful in tracking the sales made on a certain product. Moreover,
this technology helps in tracking all the merchandise in the stores so that there is easy
accountability.
Sustainability Analysis
Revolves around measures taken by Wal-Mart to help in the maintaining success
Inventory Management in Wal-Mart
In regards to inventory management systems, the retailer has adopted the streamlined approach
that helps maintain inventory at low levels. The company has also made a significant investment
in inventory and cross docking (Greenspan, 2019). Wal-Mart through the integration of

WAL-MART’S SUPPLY CHAIN ANALYSIS 9
inventory and docking, has been able to create convenience by easing difficulties created in the
inventory management processes. According to Greenspan (2019), the company’s adoption and
application of fast transportation equipment have also significantly improved the supply chain
process. The company has trucks and vehicles that save its distribution time. Much time is lost
during shipping and transaction. Trucks and shipping vehicles eliminate this hindrance and bring
down costs in the process. Currently, the company stands as a global emulation through its
inventory practice model.
Discussion of Company’s Procurement and Supply Chain Analysis
The Supply Chain Strategy
The effectiveness of Wal-Mart’s supply chain strategy is as a result of the ability to adapt
to the changes that occasionally occur within the market place. It is established that the company
is committed to the improvement of their operations, lowering the costs, and improving their
relationships with the customers. Wal-Mart has been able to adopt a supply chain management
system that is strategically effective (Robinson, 2015). A lot of concentration is given to the
procurement and distribution of their products and services to their customers. The organization
has more than forty distribution centers all around the globe; hence its ability to procure and
distribute efficiently is a major influence especially to their competitors. Additionally, the
company is specific when it comes to meeting its set targets in the best possible ways. In the
distribution, logistics, and transportation follow the most appropriate practices.
Wal-Mart’s supply chain strategy as well as their strength in the industry comprises of
four factors (Ngunyen, 2017). These are: technology integration in the organization, inventory
management, procurement and distribution, and efficient components of logistics. The
company’s emphasis on building long lasting relationships with their suppliers, employees, and

WAL-MART’S SUPPLY CHAIN ANALYSIS 10
suppliers are major contributing factors towards the success in its supply chain. Wal-Mart has
recently invested in cross docking which is a very unique manner of managing inventory by the
organization (Soni, 2015). Through the use of cross docking inventory management system,
Wal-Mart resolved to reduce its costs of sales hence enhancing more productivity. According to
Soni (2015), cross-docking means that products can be transferred directly from the outbound
and inbound truck trailers with no requirement of other storage means. Suppliers deliver to the
Wal-Mart distribution centers, then the product is cross-docked and later delivered to the Wal-
Mart stores. The cross-docks helps in keeping the transportation and inventory costs down,
reduce the time used in transporting as well as eliminate inefficiencies.
Additionally, Wal-Mart’s management team has invested in spending quality time with
their suppliers, distributers, and vendors in a bid to understand how they are performing
(Ngunyen, 2017). Through this, they can comprehend and distinguish between what should be
procured and what is supposed to be sold. Therefore, the leaders of the company’s supply chain
is an organised example to other retailers, especially regarding the application of effective
application of mechanisms and meeting the requirements of their consumers.
The Effect of Globalization on Wal-Mart
Globalization has positively and negatively affected Wal-Marts supply chain
management processes. However, it’s notable that Wal-Marts benefits on globalization are
greater (Raza, 2015). For instance, globalization has enabled the retailers to develop chains
across boundaries, that is, in Canada, Mexico, Latin America, and the majority of parts in the
United States. Additionally, the retailer has more than 7000 store outlets all over the world with
120 distributive units. Wal-Marts enhanced inventory process, vast distributive channels,
improved technology as well as cross-docking are indicators of the retailer's improved supply

WAL-MART’S SUPPLY CHAIN ANALYSIS 11
management system (Raza, 2015). The retailer also has a tracking system used in information
transfers and process formulation.
Improvement Programs and how they help in Achieving Vision, Mission, and Strategic
Goals
There are several recommendations that the company should take into consideration.
They include:
Expansion into the Asian market
Wal-Mart should consider expanding their operations into the Asian market, for example,
in China and India. There is an observable trend in the growth of the Asian market, which poses
a great challenge to Wal-Mart.
Emphasizing the diversity programs
Diversity should be embraced by the organization in a bid to show appreciation of
different cultures.
Continuous training and development
The company should not be fully satisfied by its current status but rather should consider
advancing. There should be constant training programs to employees and the adoption of new
measures.
Strengthen bonds
The bonds with suppliers and customers should be put into consideration. Ignorance
could lead to the dissatisfaction of these parties.The expansion will lead to more growth in the
organization. They should also place emphasis on diversity programs. To further improve its
performance globally, it advisable for them to consider expanding their operations into the Asian
market, for example, in China and India. With technology being adopted in the company, the

WAL-MART’S SUPPLY CHAIN ANALYSIS 12
supply chain has rendered to be very effective. Technology will help in creating bonds and
relationships with suppliers and distributers much easier.
Conclusion
In finality, the supply chain of any organization is always a process. However, leaning
towards the advancement of the supply chain through proper management can ensure that an
organization transforms a lot. Its retail performance in the Asian market has also been
exceptional. However, the retailers spending in the United States markets and Europe has greatly
reduced and instead shifted to the Asian regions.
The company has initiated investments in countries such as India, Japan, and China,
which have served to increase its sales as well as its general performance. There is an observable
trend in the growth of the Asian market, which poses a great challenge to Wal-Mart. Diversity
should be embraced by the organization in a bid to show appreciation of different cultures.
Continuous training and development is also a viable approach. The company should not be fully
satisfied by its current status but rather should consider advancing. There should be constant
training programs to employees and the adoption of new measures. Strengthening bonds also
should be into consideration. The bonds with suppliers and customers should be put into
consideration. Ignorance could lead to the dissatisfaction of these parties.

WAL-MART’S SUPPLY CHAIN ANALYSIS 13
References
Ferguson, E. (2019, February 13). Walmart's Mission Statement & Vision Statement, Generic &
Intensive Strategies. Retrieved from http://panmore.com/walmart-vision-mission-
statement-intensive-generic-strategies
Greenspan, R. (2019, February 21). Walmart's Inventory Management. Retrieved from
http://panmore.com/walmart-inventory-management
Joo, H. Y., Seo, Y. W., & Min, H. (2018). Examining the effects of government intervention on
the firm’s environmental and technological innovation capabilities and export
performance. International Journal of Production Research, 56(18), 6090-6111.
Ngunyen, T. (2017, July 1). (PDF) Wal-Mart's Successfully Integrated Supply Chain and the
Necessity of Establishing the Triple-A supply Chain in the 21st century. Retrieved from
https://www.researchgate.net/publication/320239187_Wal-
Mart's_Successfully_Integrated_Supply_Chain_and_the_Necessity_of_Establishing_the
_Triple-A_supply_Chain_in_the_21st_century
Raza, S. (2015, March 5). Wal-Mart's CEO On The Impact Of Globalization And Culture.
Retrieved from https://www.valuewalk.com/2015/03/wal-marts-ceo-on-the-impact-of-
globalization-and-culture/
Robinson, A. (2015, May 13). Walmart: Keys to Successful Supply Chain Management.
Retrieved from https://cerasis.com/supply-chain-management/
Soni, P. (2015, February 20). Managing Walmart's Supply Chain ? Cross-Docking and Other
Tools. Retrieved from https://marketrealist.com/2015/02/managing-walmarts-supply-
chain-cross-docking-tools/

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Smithson, M. (2017, January 28). Walmart: Operations Management 10 Decisions,
Productivity. Retrieved from http://panmore.com/walmart-operations-management-10-
decisions-areas-productivity-case-study-analysis