Walt - Mart Supply Chain

Topics: Supply chain management, Wal-Mart, Supply chain Pages: 5 (1432 words) Published: September 20, 2010

Due Date December 1, 2009

Orlando, FL 32816


2. Introduction

3. Supply Chain at Walt-Mart Inc

4. Importance of the supply chain the strategic

5. Identification of the supply chain strategies

a. Negotiation with many supplier

b. Long Term partnering

c. Vertical Integration

d. Keiretsu Network

e. Suppliers on an as need basis

6. Issues in Wal-Mart supply chain

7. Opportunities in Wal-Mart supply chain

8. Data Analysis

9. Conclusion

10. Recommendations


Wal-Mart Stores, Inc. (Wal-Mart) was the largest retailer. Wal-Mart was able to achieve a leadership status in the retail industry because of its efficient supply management practices. This supply chain, a key enabler of its growth from its beginnings in rural Arkansas, was long considered by many to be a major source of competitive advantage for the company.

Wal-Mart developed a supply chain base on pricing, where they started sourcing products globally. Wal-Mart was thought to have around 90,000 suppliers. Those suppliers have several dozen employees working full-time to support the Wal-Mart business. Wal-Mart always emphases the need to reduce its purchase cost and offers the best price to its costumers. Distribution is another characteristic of the Wal-Mart supply chain developed. The company procured god directly from manufactures, avoiding intermediaries. This negotiation let then to offer lower prices in their product. In addition, Wal-Mart invested in a central database, store-level point-of-sale systems, and a satellite network to support this inventory management effort, supplier analysts worked closely with Wal-Mart’s supply chain personnel to co-ordinate the flow of products from suppliers’ factories and resolved any supply chain issues, receiving and transmitting point-of-sale data, also provided senior management with the ability to broadcast video messages to the stores

Centralization was apply by Wal-Mart. They believed that it had numerous benefits, such as, lower costs and improved communications between different divisions. Another key to Wal-Mart’s ability to enjoy low operating costs was the fact that it was non-union. Without difficult to handle labor agreements, management could take advantage of technology to drive labor costs down and make operational changes quickly and efficiently.

In 2006 Wal-Mart made two supply chain improvement initiatives included “Remix” , reduce the percentage of out-of-stock merchandise at stores by redesigning its network of distribution centers, and RFID (radio frequency identification tags), increase stock visibility as stock moved in trucks, through the distribution centers and on to the stores. Wal-Mart would be able to track promotion effectiveness within the stores while cutting out-of-stock sales losses and overstock expenses. In 2006, Wal-Mart continued to seek improvements to its supply chain. Although the company publicly declined to outline its targets for inventory reduction 3. SUPPLY CHAIN AT WAL-MART

Sam Walton owned a successful chain of stores under the Ben Franklin Stores banner, a franchisor of variety stores in the United States. He was able to selectively purchase merchandise in bulk from new suppliers and then transport these goods to his stores directly. When Walton realized that a new trend, discount retailing — based on driving high volumes of product through low-cost retail outlets — was sweeping the nation, he decided to open up large, warehouse-style stores in order to compete. To stock his new warehouse-style stores, initially named “Wal-Mart Discount City,” Walton needed to step up his merchandise procurement efforts. As none of the suppliers were willing to send their trucks to his stores, which were located in rural Arkansas, self-distribution was necessary.

Wal-Mart is committed to improving...
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