Evaluating Supply Chain Management at Walmart: Strategy and Impact

This report provides an in-depth analysis of Walmart's supply chain management strategy and practices, evaluating their impact on the organization's performance. It examines Walmart's historical evolution in supply chain management, including the implementation of centralized delivery systems, direct sourcing from manufacturers, and the use of technology like EDI and satellite communication. The report also discusses Walmart's adoption of cross-docking, Point-of-Sales (POS) systems, and voice-based order filling (VOF) to enhance efficiency. Furthermore, it explores the company's efforts in collaborative planning, forecasting, and replenishment (CPFR) and the implementation of RFID technology to reduce costs and improve stock management. The report touches upon Walmart's commitment to reducing its carbon footprint within its supply chain, highlighting its focus on sustainability and environmental responsibility. It also identifies potential areas for improvement in Walmart's supply chain management practices, offering recommendations for enhancing overall performance.

SUPPLY CHAIN MANAGEMENT OF WALMART
1 | P a g e

EXECUTIVE SUMMARY
Wal-Mart remains the major retailer working from 15 republics over and above rendering to
them, Supply Chain organization is the key source over which their group develops and
accomplishes the position. However, they assert that accompanying retailing administrations are
pilfering their approaches in merchandising and supply sequence corresponding to shared
transactions of records with purveyors, arrangement of RFIDS as well as bar codes, assisted self-
dissemination through in-house transportation and completely digital fact of deals to realize the
itemized levels. In the course of resource chain organization there remain certain purposes that
are to carry on to be absorbed similar to the acquiring of the harvests from the dealers and
comprehensive traders. The next stage is of delivery which needs a well-organized policy over
and done with which prices could be abridged and to practice best transportation methods at
minimum cost. Once the artifact is prepared to be vended at any subject of deal, its retail policy
ought to be framed as at the supplies, the harvests remain to be vended typically at wholesale
level. The employment plan includes of all progressions from the segment of logistics to stock
matters plus promote in dropping the functioning costs. Wal-Mart remains precisely renowned
for positioning Just-in Time procedure in their resource supervision that diminishes a share of
remaining expenses by providing bulk of not essential stuffs. By means of the enormously
premeditated and knowledgeable supply chain dispensation scheme, Wal-Mart has achieved to
realize a momentous share in the US stock marketplace that may be observed in the liberal way.
2 | P a g e

Table of Contents
Introduction......................................................................................................................................4
Critically evaluate the current supply chain management strategy and practices of your chosen
organisation and the impact on the performance of the organisation..............................................5
Identify and justify a number of supply chain management practices that would enable Walmart
to improve its performance ............................................................................................................11
Applying theoretical methods, select the most appropriate set of supply chain management
practices and demonstrate why they are the most appropriate to enable the organisation to
improve its overall performance....................................................................................................13
Conclusion.....................................................................................................................................16
References......................................................................................................................................17
3 | P a g e

Introduction
Wal-Mart Inc. stands as an American transnational retail company that functions through
a chain of supermarkets, reduction unit supplies, and grocery outlets. The concern was originated
over and done with Sam Walton at the year 1962. The principal sector remained in Bentonville,
Arkansas, besides it is assimilated on 31st October 1969. It correspondingly possesses and
drives “Sam's Club trading storerooms. Since 31st January 2018, the Company holds 11,718
outlets as well as clubs within 28 republics, functioning with 59 assorted aliases. The business
works under the tag of Wal-Mart at United States plus Canada, as “Wal-Mart de México y
Centro America in Mexico besides Central America, having the name of Asda at United
Kingdom, by approach of the “Seiyu band in Japan, in addition to the label of Best Price in
India”. It devises exclusively well-kept-up procedures of business pursuits in Argentina and
Chile, alongside Brazil, as well as Canada (Christopher, 2016).
This remarkable evolution of Wal-Mart stands accredited to its sustained attention on
purchasers’ desires and decreasing cost over competent “supply chain controlling practices”.
Wal-Mart is the domain's prime establishment by means of revenue – nearly US$480 billion
conferring to the record of “Fortune Universal 500 at 2016 – other than the leading private
company in the territory by way of 2.3 million workforces. It is a widely operated family
controlled trade, owing to the monitoring of the operating zones by the members of “Walton
family”. The successors possess above 50 percent of Wal-Mart over and done with their
allotment of the business, the projects, besides their specific assets. Wal-Mart remained the
biggest U.S. grocery dealer during 2016, plus 62.3 % of Wal-Mart’s transactional value
of US$478.614 billion originating from U.S. setups and accountabilities (Corbett et al. 2012).
The corporation debuted on the Standard Exchange of stocks in New York during 1972. Through
the years at 1988, Waymart existed as the utmost viable trader in the United States., besides by
time of “October 1989”, the Company had turned out to stand as the leading light in positions of
revenue. Formerly as per geographic foundation restricted to South as well as lower Midwest
regions, through the initial period of 1990s, the establishment had supplies from the coastal parts:
Sam's Club was recognized in New Jersey by November 1989 plus the chief California store was
set up at Lancaster within July 1990 (Corporate.walmart.com, 2018). . A unit of Wal-Mart
4 | P a g e

in York, Pennsylvania got started by October 1990: as the leading main supply division across
the Northeastern areas.
The funds exterior to North America has realized diversified consequences: its functional
processes in UK, Southern America, besides China remained highly prosperous, while projects at
Germany as well as South Korea were unsuccessful (Corbett et al. 2012).
Critically evaluate the current supply chain management strategy and practices of your
chosen organisation and the impact on the performance of the organisation.
Wal-Mart has persisted as a celebrated and branded organization - as a pattern designed for 21st
century entrepreneurship. In that circles the challenge in examining the world's major retailer.
The impact of supply chain organization on the performance of Wal-Mart lies in resolutions as
regards, acquiring, manufacturing, as well as distribution of measures in and among the
corporation and its dealers plus clienteles (Coyle et al. 2016).
(Source: Chaabane et al. 2012)
5 | P a g e

Figure: Comparative records of delivering goods
(Source: Hugos, 2018).
During the primary period of 1970s, Wal-Mart befitted as unique operational division of the prominent
trading businesses in the domain to “centralize” the delivery system, revolutionize the distributing
structure of “hub-and-spoke” method. In the scheme, stuffs were centrally arranged, accumulated at a
massive storeroom, identified as ‘distribution center’ or “hub” where from these substances were shipped
to the distinct supplies (spoke). Wal-Mart highlighted the requirement to lessen purchasing prices and bid
the supreme value to the client. (Holweg, and Helo, 2014). The business openly obtained the materials
from creators, by exclusively surpassing the mediators. Wal-Mart confirms a acquisition deal merely as
soon as it remains effusively assured that the merchandises being subscribed is not accessible to another
place at a lesser expense. Wal-Mart devotes a noteworthy extent of time consulting vendors as well as
understanding their price arrangement. (Kotler, 2012).
By constructing the process in translucent manner the trader can remain convinced that the producers are
performing their preeminent functions to amend the prices. The harmonization of workstation processors
in Wal-Mart was linked to individual suppliers. EDI allowed the dealers to transfer acquisition orders
6 | P a g e

together with store-to-store evidence of involving to their retailed supplies. On unloading data as regards
the deals of several products, the workers shipped the mandatory possessions to Wal-Mart’s delivery
centers (Mansouri et al. 2012) . An imperative level of Wal-Mart’s logistics setup remained its fast as
well as approachable transportation structure.
The distribution hubs were examined by greater than 3500 business held trucks. Wal-Mart supposed that
it required drivers who stood devoted and enthusiastic to serve the clients The Corporation engaged only
knowledgeable teamsters who had focused on beyond “300,000 accident-free loads”, with no foremost
transportation damage. To brand its delivery process further well-organized, Wal-Mart likewise prepared
a logistics method termed “cross-docking.” In this arrangement, the accomplished products were
unswervingly chosen from the industrial plant, organized and then responsively provided to the patrons
(Mulnix, 2013). Wal-Mart capitalized comprehensively in IT besides communication patterns to
successfully track transactions and stock records in supplies across the nation. Through the quick
enlargement, it persisted to be indispensible to ensure a decent communication approach Therefore, Wal-
Mart built up its identifiable classification of satellite broadcasting during 1983. (Robert et al. 2010).
Wal-Mart remained competent to diminish infertile portfolio by permitting supplies to bring about their
own frameworks, decreasing pack amounts transversely through countless product groupings, and well-
timed price discounts. In its place of “cutting the catalogue” from corner to corner of the provisions, Wal-
Mart accomplished full usage of its IT skills to sort more portfolios accessible in the event of stuffs that
clienteles required maximum, even though dropping the general record levels (Luo, 2012). .
The order organization besides store replacement of possessions was completely performed with the
assistance of processors over and done with the “Point-of-Sales (POS) method”. From end to end of this
process, it was conceivable to display and trace the deals and goods of the supply altitudes on the stock
shelves. By the year 1998, Wal-Mart mounted a voice-founded order filling (VOF) organization in its
entire focuses of grocery dissemination services (Corbett et al. 2012).
Each individual liable for selection of order was delivered with a microphone or speaker earpiece, related
to the transferrable (VOF) classification which could remain worn through “waist binding”. They were
directed by the vocal sound to the sites of the elements in the delivery hubs. As the “carpet area” of every
7 | P a g e

Wal-Mart outlet marked within 40,000 - 200,000 sq. feet, effort of transferring possessions in the stock
remained an imperative share of logistics procedures (Ghiani et al. 2013) . Wal-Mart arranged
significant reserves in information technology to speedily find and refill merchandises at the stocks.
Retail Connection attached Wal-Mart’s EDI system through an extranet, reachable to Wal-Mart’s
thousands of dealers. The providers could treasure out in what way their creation was executing vis-a-vis
challengers’ merchandises in a specific product classification (Euro Supply Chain Jobs. 2018).
Wal-Mart possessed the leading and most cultivated computer coordination within the private
subdivision. The corporation employed “Massively Parallel Processor” (MPP) of the computer
arrangement to chase the measure of possessions and store levels. All evidence connected to sales as well
as catalogues was accepted over and done with a progressive satellite message classification (Coyle et al.
2016). Through the mid-1990s, Trading Link contributed into an “Internet-empowered SCM
organization whose purposes were not restricted to record management only, but moreover enclosed
collective preparation, projecting and replacing (CPFR). In CPFR, Wal-Mart functioned in organized
way with its crucial dealers on a immediate foundation by means of the networking technology to
cooperatively control product-wise request prediction. CPFR is demarcated as a commercial preparation
for trading associates to share predictions and consequences of data over and done with the procedures of
interface of Internet, with the intention of minimizing portfolio budgets despite the fact that at the
equivalent time, it aims to improving product accessibility through the supply sequence (Hugos, 2018).
However CPFR remained an encouraging supply chain creativity intended for a mutually advantageous
teamwork amid Wal-Mart and the dealers, its tangible execution needed enormous funds in time as well
as currency.
8 | P a g e

(Source: Trujillo, 2018).
A small number of dealers using the providers, Wal-Mart endeavored to device CPFR. They criticized
that a noteworthy extent of duration was consumed on developing projections and investigating sales
records. In determining to device innovative technologies to moderate prices and escalate the
productivity, within July 2003. Wal-Mart requested its highest 100 dealers to stand with RFID agreeable
compliances from 2005. Wal-Mart prearranged to substitute bar-code tools by RFID equipment. The
business supposed that this standby would decrease its supply chain organizational expenses and improve
competence. As of the application of RFID, the personnel remained no longer mandatory to physically
probe the “bar codes” of possessions incoming the provisions and delivery centres, redeeming labour
charge besides time (Supply Management, 2018). Wal-Mart predicted that RFID may decrease the
occurrences of “stock-outs” in the supplies. Even though Wal-Mart remained enthusiastic regarding the
welfares of RFID, specialists sensed that it might execute a heavy load on its dealers. To brand
themselves RFID obedient, the dealers desired to sustain a predictable value of $20 Million. On account
of this, a projected 50% was assessed to be expended on assimilating the arrangement and constructing
adjustments within the supply sequence with software (Suppliers and Jeff, 2018).
9 | P a g e

(Source: Huang and Goetschalckx, 2014).
Wal-Mart dedicated to lessen carbon footprint as of its supply series of carbon dioxide since the
period of 2015. The development team working to employ the accomplishment of objectives
proposed to produce plans concerning the reductions of discharges conferring to the information
of “Environmental Defense Fund (EDF)”.
10 | P a g e

Figure: Assortment of Product
(Source: Robert, 2016)
11 | P a g e

(Source: Supply Management, 2018)
Identify and justify a number of supply chain management practices that would enable
Walmart to improve its performance .
To place it modestly, strategic preparation and mechanism are concerned with source acquisition,
while deliberate planning as well as control effort on resource distribution, modification,
effective planning as well as managers is anxious with commercial implementation (Holweg, and
Helo, 2014). Supply chain organization has been demarcated as the "project, preparation,
implementation, regulation and observation of accomplishments concerned with supply sequence
with the independent foundation of net value, constructing a viable infrastructure, leveraging
universal logistics, harmonizing supply by means of demand as well as assessing performance
internationally.” The objective of Supply Chain Organization is to assimilate both information
12 | P a g e

and quantifiable movements effortlessly across the resource series as an operative competitive
defense (Langen, 2013).
Wal-Mart exposed manifold changes toward its on time distribution values for its dealers that
ensure the prospect to considerably influence in what way “these thousands of dealers” approach
the supply series and “logistics events with retailer”. Wal-Mart required its providers (shippers)
to come across a 2day delivery window as a substitute of its preceding “4-day window”, on top
of its obligatory compliance level from 90 -95% since February 2017 (Charles and James,
2011). For non-compliant distributions, its dealers pay a remuneration of 3 % of the price of
merchandises of entirely non-compliant provisions, which is in influence since 2010. The 3 %
“tax” likewise relates to suppliers while fewer than 95 % of merchandise circumstances are
acknowledged (Kotler, 2012).
Wal-Mart has undergone a sequence of ruthless publicity. Information of additional record
combined with unoccupied shelves has infected the retail giant's name as a perfect initiator of
supply chain administration. Wal-Mart once more gives the impression to move to a novel
scheme for replacement as well as inventory device. The “Global Replenishment System”
presents downward projecting model that is established to swap, Update, a bottom-up
arrangement technologically advanced by IBM (Technologyadvice.com. 2018). Considered to
afford an enhanced real-time assessment of portfolio, GRS similarly places additional stress on
advertising/event forecasting.
13 | P a g e

(Source: Trujillo, 2018)
Applying theoretical methods, select the most appropriate set of supply chain management
practices and demonstrate why they are the most appropriate to enable the organisation to
improve its overall performance.
The labeling of supply chains with strong theoretical demonstrations of office blocks, the ideal of
SCOR may be utilized to refer to “supply chain management” that stand very modest or
multifaceted using a mutual set of classifications. Consequently, distinct industries may be
interconnected to define the penetration and extensiveness of practically any resource chain
(Bauwens et al. 2013).
14 | P a g e
Wal-Mart has assumed that addressing functional plus supply chain openings
may be virtuous for together- the trade and the surroundings, as well as needs
affecting in advance with its approach of supply chain by selecting the
principal pollution diminishing events that may accomplish the falloffs
consistent with EDF. The requirement to be suitable, quantify and measure
the cutbacks is what engaged the project squad to produce an article of
guidance that founds “rubrics” for calculating carbon drops en route for Wal-
Mart’s “20 million metric tons objective”. Wal-Mart Stores is constructing
their supply sequence with delivery hubs premeditated to come across the
demands of “online spending”. The business assumes to open 4such
massive conveniences, since it targets to bounce threefold online transaction
throughout 2018, “to increase $35 billion as of $12 billion – the previous
year”. “The net factual price reflects issues for instance, surplus to landfill,
greenhouse discharges, financial mobility, employee safety besides
sustenance and welfare. This stand as instances of the assets of production
which may create special impact on the atmosphere, in indigenous societies,
or else on the populaces who develop and create what is retailed." “Low
charges profit the clients, but low true expenses value one and all."

15 | P a g e
• S C O R i s f o u n d e d o n s i x d i f f e r e n t m a n a g e m e n t m e t h o d s : “ P l a n , S o u r c e ,
C r e a t e o r m a k e , T r a n s p o r t o r d e l i v e r , R e t u r n , p l u s E n a b l e " .
P l a n – D e v e l o p m e n t s t h a t s t a b i l i z e c o m b i n e d d e m a n d a s w e l l a s s u p p l y t o
i m p r o v e a s e q u e n c e o f a c h i e v e m e n t s w h i c h g r e a t l y e n c o u n t e r s
p r o c u r e m e n t , c o n s t r u c t i o n , a n d d i s t r i b u t i o n o f s u p p l i e s .
S o u r c e – P r o c e d u r e s t h a t h e l p t o o b t a i n t h e p o s s e s s i o n s a n d f a c i l i t i e s t o
c o m e a c r o s s p r e a r r a n g e d o r r e a l d e m a n d .
M a k e – P r o g r e s s i o n s t h a t t r a n s m u t e a r t i f a c t t o a c o m p l e t e s t a g e t o m e e t
s t r a t e g i c o r d e f i n i t e d e m a n d ( C h a r l e s a n d J a m e s , 2 0 1 1 ) .
D e l i v e r – M e t h o d s t h a t d e l i v e r c o m p l e t e d g o o d s a s w e l l a s s e r v i c e s t o r u n
i n t o i n t e n t i o n a l o r a c t u a l r e q u e s t , c h a r a c t e r i s t i c a l l y c o u n t i n g o r d e r
s u p e r v i s i o n , s h i p p i n g m a n a g e m e n t , i n a d d i t i o n t o s u p p l y a d m i n i s t r a t i o n .
R e t u r n – M e t h o d s l i n k e d t h r o u g h r e t u r n i n g o r g e t t i n g r e v e r t e d
m e r c h a n d i s e s f o r s o m e p u r p o s e . T h e s e d e v e l o p m e n t s r a n g e t o “ p o s t -
d e l i v e r y ” c l i e n t s u s t e n a n c e ( E l l i n g e r e t a l . 2 0 1 5 ) .
E n a b l e – M e t h o d s a c c o m p a n y i n g w i t h t h e c o n t r o l l i n g o f t h e r e s o u r c e
c h a i n . T h e s e p r o c e d u r e s c o m p r i s e o r g a n i z a t i o n o f : c o r p o r a t e r u l e s ,
p r e s e n t a t i o n , f a c t s , c a p i t a l s , a m e n i t i e s , a g r e e m e n t s , s u p p l y c h a i n s e t - u p
a d m i n i s t r a t i o n , h a n d l i n g r e g u l a t o r y a c q u i e s c e n c e a n d r i s k s u p e r v i s i o n .
U s i n g a l l o r i e n t a ti o n m o d e l s , t h e r e s t a n d s a p r e c i s e p o s s i b i l i t y t h a t t h e
m o d e l s p e a k s . S C O R e m p h a s i z e s o n :
A l l t y p e s o f c l i e n t c o m m u n i c a t i o n s , f r o m o r d e r a c c e s s o v e r a n d d o n e w i t h
p a i d s t a t e m e n t .
A l l m a n u f a c t u r e d g o o d s ( p h y s i c a l s u b s t a n c e a n d p r o v i s i o n ) d e a l i n g s , a s o f
t h e “ s u p p l i e r 's s u p p l i e r ” t o w a r d s t h e p u r c h a s e r 's c l i e n t , c o u n t i n g
p a r a p h e r n a l i a , m a t e r i a l s , r e p l a c e m e n t m e a s u r e s ; b u l k a r t i f a c t , s o f t w a r e , a n d
m u c h m o r e a r e e q u i p p e d
A l l m a r k e t c o m m u n i c a t i o n s , f r o m t h e a p p r e c i a t i v e v i e w s o f c o l l e c t i v e
r e q u e s t t o t h e s a t i s f a c t i o n o f e v e r y o r d e r ( M a n s o u r i e t a l . 2 0 1 2 ) .

(Source: Technologyadvice.com.2018)
16 | P a g e

SCOR brings 3 levels of practice of supply chain administration in business. Every level of
feature contributes in describing the option (Level 1), conformation or kind of resource elements
(Level 2), particulars of components of process, counting attributes of presentation (Level 3).
Underneath level 3, businesses decompose developmental features and begin executing explicit
“supply chain organizational procedures”. At this phase businesses outline practices to
accomplish a competitive lead, and acclimatize to varying business settings (Trujillo, 2018).
Conclusion
The business’s labor dealings in positions of its individual stores and functioning circumstances
comprises in its international supply sequence, the origin and efficiency of public mobilizations
in contrast to Wal-Mart, as well as by what method Wal-Mart's progress is related to the
occurrence of buyer-driven chains of manufactured goods across the worldwide economy.
Geographic assimilation of these purposes through physical amenities situated on any or some
regions and inter-sequential amalgamation of strategic, premeditated, and effective supply chain
assessments.
17 | P a g e

References
Bauwens, J. and Verstrynge, K. (2013). Digital Technology, Virtual Worlds, and Ethical Change.
Techné: Research in Philosophy and Technology, 17(1), pp.124-143.
Chaabane, A., Ramudhin, A., and Paquet, M. (2012). Design of sustainable supply chains under
the emission trading scheme. International Journal of Production Economics, 135(1), pp 37-49.
Charles C. and James E. Hill, (2011) Advanced Supply Chain Management: How to Build a
Sustained Competition to Poirier Basics of Supply Chain Management
Christopher, M. (2016). Logistics & supply chain management. 5th Edition Pearson UK. Harlow.
Corbett, C. J., Blackburn, J. D., and Van Wassenhove, L. N. (2012). Partnerships to improve
supply chains. Sloan Management.
Corporate.walmart.com. (2018). United Kingdom. [online] Available at:
https://corporate.walmart.com/photos/united-kingdom [Accessed 10 May 2018].
Coyle, J. Langley, C. Novack, R. and Gibson, B. (2016). Supply Chain Management: A Logistics
Perspective. 10th Edition. Cengage learning. Boston.
Ellinger, A. Chen, H., Tian, Y. and Armstrong, C. (2015). International Journal of Logistics
Research and Applications. Learning orientation, integration, and supply chain risk management
in Chinese manufacturing firms, pp. 476-493.
Euro Supply Chain Jobs. (2018). Walmart’s Inventory Struggles Offer Valuable Supply Chain
Lesson - Latest Supply Chain News - Euro Supply Chain Jobs. [online] Available at:
https://www.eurosupplychainjobs.com/news/Walmarts-Inventory-Struggles-Offer%20Valuable-
Supply-Chain-Lesson-4349 [Accessed 10 May 2018].
Ghiani, G. Laporte, G. and Musmanno, R. (2013). Introduction to logistics systems management.
2nd Edition. John Wiley & Sons, Ltd. Chichester
Henfridsson, O., Mathiassen, L. and Svahn, F. (2014). Managing technological change in the
digital age: the role of architectural frames. J Inf Technol, 29(1), pp.27-43.
18 | P a g e

Holweg, M., and Helo, P. (2014). Defining value chain architectures: Linking strategic value
creation to operational supply chain design. International Journal of Production Economics, 147,
pp. 230-238.
Huang, E., and Goetschalckx, M. (2014). Strategic robust supply chain design based on the
Pareto-optimal tradeoff between efficiency and risk. European Journal of Operational
Research, 237(2), 508-518.
Hugos, M. (2018). Essentials of supply chain management. Hoboken: Wiley.
Kotler, P. (2012). Marketing management. Harlow, England: Pearson.
Langen, N. (2013). Ethics in Consumer Choice. Wiesbaden: Springer Fachmedien Wiesbaden
Gabler.
Luo, J. (2012). Soft computing in information communication technology. Berlin: Springer.
Mansouri, S. A., Gallear, D., and Askariazad, M. H. (2012). Decision support for build-to-order
supply chain management through multiobjective optimization.International Journal of
Production Economics, 135(1), pp.24-36.
Mulnix, M. W. (2013) Small Business Entrepreneurship: Utilizing Open Systems Structure to
Gain Global Market Share, Journal of Leadership and Organizational Effectiveness, 1(1), pp. 3-
49
Robert B. Handfield, Ernest L. Jr. Nichols (2010) Introduction to Supply Chain Management.
Robert Handfield, P. (2018). Walmart can't manage their inventory? | Supply Chain Resource
Cooperative | NC State University. [online] Scm.ncsu.edu. Available at:
https://scm.ncsu.edu/scm-articles/article/wal-mart-cant-manage-their-inventory [Accessed 10
May 2018].
Suppliers, W. and Jeff Berman, G. (2018). Walmart’s new on-time delivery standards may create
supply chain challenges for its suppliers. [online] Logisticsmgmt.com. Available at:
https://www.logisticsmgmt.com/article/walmarts_new_on_time_delivery_standards_may_create
_supply_chain_challenges [Accessed 10 May 2018].
19 | P a g e