10th October, 2013 Words count: 1643
The American based company “Wal-Mart” is the world’s biggest retailer in terms of sales. Supply chain management is one of the core focuses of the American giant. Many analysts believe that the most principal reason for Wal-Mart success is that it is considered a “best-in-class” company for its supply chain management practices (Alyea, Jimmy, 2012). Sam Walton, the founder of this successful company, provided lots of suggestions on establishing a better retailing company: hiring talented and experienced employees, offering significant discount on product prices, and locating the stores in more convenient places. The strategy was to sell high volumes of discounted products and in order to achieve this goal Wal-Mart needed to achieve high levels of efficiency in its supply chain. In this paper, we will discuss two areas: distribution and logistics system, and the benefits the IT brought to Wal-Mart’s inventory and logistics management.
PART ONE Distribution and logistics system
1. Distribution Centres
A distribution centre is a warehouse which is stocked with products to be redistributed to retailers and wholesalers, or directly to customers.
When Wal-Mart decides to enter a new area, it is first determined whether the chosen location can endure enough stores to support a distribution centre. After building a distribution centre, stores will be opened around it steadily in order to satiate the area. Within the centre, different sections are provided on the basis of the quantity of the goods received.
In order to ensure a steady and consistent physical distribution, Wal-Mart uses sophisticated barcode technology and hand-held computer systems, which will be discussed in the second question.
Wal-Mart has also adopted an integrated logistics system by establishing an alliance with its main suppliers in
References: 1. Alyea, Jimmy. (2012) ‘Analysing Wal-Mart 's Distribution and Logistics System’. Jimmy Alyea, MBA, 11 February. Available at: http://jimmyalyea.blogspot.ie/2012/02/analyzing-wal-marts-distribution-and.html (accessed 1st Oct. 2013) 2 5. Goddard, Jules. "The architecture of core competence." Business Strategy Review 8.1 (1997): 43-52. Available at: http://onlinelibrary.wiley.com/doi/10.1111/1467-8616.00006/abstract (accessed 7th Oct. 2013) 6 11. S. Ganesan et al. (2009) ‘Supply chain management and retailer performance’, Journal of Retailing 85 (1, 2009) 84–94. Available at: http://search.proquest.com.eproxy.ucd.ie/docview/228627667/fulltextPDF?accountid=14507 (accessed 8th Oct. 2013)