This paper will discuss the supply chain of the global business Wal-mart. It will also discuss the potential problem that can occur with the type of supply chain they use.
Wal-mart is a discount retailer that over the past ten years has become the world’s largest and most powerful retailer by bringing in the highest sales per square foot, inventory turnover, and operating profit. They have been able to accomplish this and transition from a regional retailer to global retailer by the effective management and changes to their supply chain (“Wal-mart’s keys to”, n.d.).
The main components of the supply chain are purchasing, operations, distribution, and integration. In the purchasing component purchasing managers or buyers are responsible for deciding which products the company is going to sell, which suppliers they are going to use to purchase these products from and purchasing these products from vendors at a price that will allow the company to make a profit as well (“Wal-mart’s keys to”, n.d.). In the component of operations the focus is on demand planning, forecasting and inventory management. Forecasts estimate the customer demand for each product at a specific time based on past sales, any upcoming sales or promotions and any changes in trends or competition. These forecasts are then compared to inventory levels to ensure that the locations have enough but not too much of the product to meet the demands. This allows inventory costs to drop but still allowing the company to meet the customers needs (“Wal-mart’s keys to”, n.d.). The distribution component of the supply chain consists of moving the products from warehouses or manufacturing plants to stores and then to the customer. If this is not done in a timely manner and correctly the customer will not be able to purchase the desired product and the company losing money and business (“Wal-mart’s keys to”, n.d.). The integration component is the practice of...