Detailed Analysis of Wal-Mart's Supply Chain Management Strategies

This report provides a detailed analysis of Wal-Mart's supply chain management. It begins with a company profile and then explores the key flows within the supply chain, including information, cash, product, and return flows. The report also examines the make process, covering production planning, master production scheduling, and the bill of materials. Furthermore, it delves into Wal-Mart's supply chain forecasting, discussing demand planning, forecasting methods, and evaluation techniques. Recommendations are provided throughout the report to enhance Wal-Mart's supply chain efficiency. The report highlights the importance of information flow, effective production strategies, and advanced forecasting techniques like CPFR to maintain a competitive edge. The report is a comprehensive overview of Wal-Mart's supply chain practices and provides valuable insights into its operations.

Running Head: Supply Chain Management
Supply Chain Management
Wal-Mart

Supply Chain Management 1
Contents
Introduction.................................................................................................................................................1
Company Profile..........................................................................................................................................1
Key Flow in Supply Chain.............................................................................................................................1
Information flow......................................................................................................................................2
Cash flow.................................................................................................................................................2
Product Flow...........................................................................................................................................3
Return Flow.............................................................................................................................................3
The Make Process........................................................................................................................................4
Production Plan.......................................................................................................................................4
Master production Scheduling (MPS)......................................................................................................4
Bill of Materials........................................................................................................................................5
Recommendations...................................................................................................................................5
The Supply Chain Forecasting......................................................................................................................5
Demand planning and demand forecasting.............................................................................................5
Typical demand pattern...........................................................................................................................6
Qualitative and quantitative Forecasting.................................................................................................7
Forecasting evaluation and accuracy.......................................................................................................7
Recommendations...................................................................................................................................7
Conclusion...................................................................................................................................................7
References...................................................................................................................................................8

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Introduction
Supply chain management refers to the process of flow of goods and services in the
market which also involves the flow of raw material, finished goods and work in
progress from the point of initiation to the point of ingestion. Basically, an efficient and
effective supply chain of an organization is an interconnected or interlinked chain which
connects all the networks and channels of business makes the product approachable to
all the customers present in the target market. Further, the report provides a brief
overview of the Wal-Mart Company and its key flow in supply chain management and
the development and making process as well. Lastly, the report also provides details
about the supply chain forecasting of Wal-Mart Company. More details about the task
are discussed below (Shafiq, et. al., 2016).
Company Profile
Wal-Mart is a multinational retail chain store which was inaugurated in the year 1962 by
Sam Walton in the United States. The company operates its retail chain store in total 50
states and earned revenue of approx. $480 billion in the previous year (according to
fortune global 500). The fact was considered that the company earning the largest
revenue among all other companies present in the list. Further Wal-Mart has huge
family of employees working with them around 2.3 million people in number. The
company is aiming to expand their business in many other countries like Brazil, Chile,
and Canada etc. Wal-Mart is identified as the leader in the retail sector of the United
States industry and worldwide. Wal-Mart has total 11,695 stores and clubs in 28
countries, under 63 banners and also the Sam's Club retail warehouses are also owned
and controlled by the team of Wal-Mart only. The company came on New York Stock
Exchange in the year 1972 and by 1988 Wal-Mart also became the most profitable
retailer in the US as well. Further by 1989 the company also became the largest
company in terms of revenue as well. Furthermore, details about the supply chain
management of the company are discussed below (Lombardo, 2017).

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Key Flow in Supply Chain
Generally, the supply chain management can be explained as an organized form of
different activities in the organization such as information, raw material, finished goods
etc. For the purpose of initiation of effective supply chain management, it is important
for the management to initiate the adequate flow of work. The supply chain will help the
organization to analyze the ineffectiveness present in the organization and implement
adequate procedures to enhance the growth of Wal-Mart. Further, the supply chain
process which the organization Wal-Mart uses is discussed below (Chase, 2017):
Information flow
This type of flow includes information flow or flow of data including the purchase order,
quotation request, change request, feedback on the performance of suppliers on behalf
of customers and product specification etc. this is remarked as one of the most
important aspects of the supply chain management of Wal-Mart. as noticed that the
company is providing its products on heavy discount due to which the quotation of Wal-
Mart is very effective, the customers can also quote their values on the website of the
company. They also receive the products and pay the amount through money transfer
to account of stores after which the company assigns the suppliers and distributors
regarding the sale transaction. But since the organization is giant in its operations due
to which the company many times faces the issue of insufficient stock. Considering
which Wal-Mart focused on lowering the prices of their product so as to attract the
customers and fix the problem (Edelson, 2017).

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Cash flow
The company also maintains adequate cash flow in the organization by managing the
receipts payable and receivable wisely. The management of the organization is efficient
in collecting the cash from the customers and paying back to them. Generally, amount
of product purchased from Wal-Mart is paid at the store itself but if the distribution gains
the information regarding the replenishment of supply then issues are created in the
supply process. As the product is received by the distributor to the store and then funds
are moved. Further on the basis of invoice raised the customers to check for the quality
of the product and prices of the supplier. The company has also extended the payment
cycle from 90 to 120 days (Hill, & Fredendail, 2016).
Product Flow
This flow includes the flow of goods from the manufacturer to the customers. this
process includes the intervention of various suppliers, distributors, dealers etc. the
company focuses on the supply strategy of product which reduces its cost and offers
the best price to the customers of their product. The company aims to eliminate the
intermediaries by acquiring the products directly from the manufacturer only. For the
flow of product, the company acquires the cross-docking technique which directly picks

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the finished goods from the manufactures of suppliers and then supplies them directly to
the customers (Roberts, & Berg, 2012).
Return Flow
Reverse or return flow is not an addition to the value of product or profits of the
company. The company Wal-Mart utilizes the reverse logistic technology for dealing
with the return flow of products. When the products do not match the standards of the
expectations of the customers then they are returned by them to the store. Further, the
Global Responsibility Report, 2015 explains the product use of such products by
recycling, repairing and reusing them other better purposes (Swink, et. al., 2014).
Recommendation
It is recommended to the management of Wal-Mart that the organization shall lay more
focus on the information flow activities as more the information will flow and more the
people of the organization will get initiated to work. Also, flow of adequate information
develops efficiency in work as the employees will have full detailed information about
the task and its implications (Swink, et. al., 2014).

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The Make Process
Production Plan
Production planning refers to the process of identifying the need and creating new
product according to the requirement present in the market. The main motive behind the
production plan is to develop a product in a way that it achieves the expectation of the
customer present in the market and maintain its cost-effectiveness as well. Cost-
effectiveness and efficiency are the two main focus of the production plan of the
organization. Further Wal-Mart uses the mixed production strategy by aligning both the
chase and level market. With the aid of technique, the company becomes able to
produce the goods as per the demand present in the market. Wal-Mart should also use
the effective production and capacity planning strategies so as to enhance the flow of
production. The Wal-Mart production plan includes three categories that are short-term,
medium-term and long-term. In the initial category, the production manager guides all
the task responsibilities of workforce in their operations. Medium-term includes the
process of schedule under which the main focus is to minimize the prices of the
products produced and the long term includes capacity planning (Brandenburg, et. al.,
2014).
The production process of the company lays stress on fulfilling the needs and
requirements of the customers and supply products according to the demand present in
the market. They also aim to improve the abilities of production team and the quality of
the products served. With the influence of rapidly changing market conditions, the
company also needs to implement processes which show effectiveness in its workings.
in the global market, the performance of Wal-Mart is compared with K-Mart and Target
Corporation, both of these companies have the optimum production capacity to satisfy
the demand, considering to which the management shall also implement actions which
help the company in its growth process (Swink, et. al., 2014).
Master Production Scheduling (MPS)
Master production Scheduling is a plan, which is designed and developed by the
company for the purpose of staffing, production, inventory etc. Wal-Mart is currently

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using a system technique which is known as perpetual inventory. The company uses
the digital technology to book the inventory present with the manufacturing unit within a
specified period of time. Further, this process is called continuous inventory (Lu, &
Swaminathan, 2015).
Bill of Materials
Bill of material is the list which includes different quantities of elements, materials, and
constituents which are required to develop the particular goods at the unit. At Wal-Mart,
such bills include are the material information or the data related to the suppliers and
raw material which are used in the creation of the product. It includes list of material
quantities required for the product (Christopher, 2016).
Recommendations
As the company, Wal-Mart is using the effective production planning process and
schedule but still, there is some scope for improvement in the company. The company
should initiate to build a better coordinated relationship with their partners so as to aim
for future expansion. Also, there should be improvements in the production process as
well. The activities shall be allocated to the team members through the head. Proper
research shall be conducted according to the conditions of the company and the
activities shall be initiated which can improve the satisfaction level of the customers
present in the market (Stadtler, 2015).

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The Supply Chain Forecasting
Demand planning and demand forecasting
Supply chain management practices at Wal-Mart mainly focus on the demand planning
and forecasting. Technological innovation plays an important role in developing the
supply chain at Wal-Mart. the company uses the universal product bar codes with the
help of which all information about the stores can be collected immediately at the head
branch. This type of techniques assists the managers in determining the rate at which
the stores are selling goods and services and in what qualifies as well. They focus on
forecasting the sales and calculating the past data and advanced trend upcoming in the
industry (Gilling, & Ulmer, 2016).
After which they forecast the estimated figures to ensure that the distributors of the
organization gain the right quantity of product at the right cost as well. this type of
demand forecasting eliminates the issues regarding the unexpected market conditions,
uncertainty of system, social conditions which can help the company to increase the
demand (Mangan, & Lalwani, 2016).

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Typical demand pattern
The pattern below mentioned discusses the demand and supply of inventory at Wal-
Mart.

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Qualitative and quantitative Forecasting
Wal-Mart has implemented an application for the forecasting of demand which analyses
the need of each and every product procured with the company. The qualitative
approach is used by the company forecast the demand. Data warehousing business
model is initiated by the organization to forecast the demand behavior, reason of
behavior and time frame (Natto, 2014).
Forecasting evaluation and accuracy
Wal-Mart is currently using techniques of different mathematical tools for the purpose of
evaluation of forecasting and analyzing accuracy in records maintained. Accurate
inventory count is required by the MRP to run properly. Also, the company uses various
techniques such as Mean Deviation, absolute Mean Deviation, Mean squared error etc.
which helps the company in evaluating the difference between actual and calculated
demand of products of the company (Chu, 2014).
Recommendations
Thus, it is recommended to the management of Wal-Mart that they should use new and
hi-tech techniques to optimize the demand and supply of the company in the
competitive environment. Wal-Mart should use the CPFR (Collaborative Planning,
Forecasting, and Replenishment) techniques so as to forecast the demand and supply
of their inventory in the market. This scheme implements in such a way that suppliers
and producers can match the estimated production forecasted by the management.
Also with the use of EDI (Electronic Data Exchange) the organization shall enhance
their relationship with the vendors, manufacturers and suppliers (Gilling, & Ulmer,
2016).
Conclusion
Thus in the limelight of above-mentioned events, the fact that shall be noted is that for
the company Wal-Mart supply chain plays an effective role in determining the growth
and supply the products according to the demand. The organization uses qualified
supply chain management process so as to innovate their product which can fulfill the
expectation of the customer and is cost-effective as well. The above-mentioned report

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also determines the demand forecasting of the inventory of the company which assists
them in manufacturing the products for better. The significant supply chain management
is visible for the success of Wal-Mart. the organization uses effective techniques and
strategies to successfully create a chain which can supply information along with the
supply of material. Wal-Mart also uses innovative technology to improve the supply,
production and manufacturing process of the organization. Further few
recommendations are given to the company which can help them to initiate
effectiveness in the global market.