Free Research Paper About Supply Chain Management Of Walmart Inc.
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The National Retail Federation (NRF) in the year 2014, ranked Walmart Inc. as the globe’s position one retailer based on international sales, because it has a developed supplier collaboration procedure supported by technology (Leeman, 2010). The company employs its enormous purchasing power in shaping behavior of vendors that also helps in driving costs down (Leeman, 2010). The development of Walmart’s Inc. supply chain involves three elements: technology, operating its fleet of trucks, and distribution practices. Advantages of the company supply chain efficiency lead to cost-efficiency inventory control, time-savings, as well as enhanced product forecasting (Leeman, 2010).
Walmart began operating directly with producers in the 1980s, offering suppliers the task of controlling inventory within its warehouses (Ray, 2010). It resulted in vendor managed inventory, which smoothed malpractices of inventory flow and assisted in ensuring products were constantly on stores shelves. Vendor inventory management (VIM) entailed collaboration and cooperation with suppliers who produced efficient supply chain and technology connecting everything (Ray, 2010). Currently, inventory management funnels information or data from stores like warehouse inventory, real-time sales, and point-of-sale information to one database. Suppliers who understand when to ship additional products can access the information (Ray, 2010).
Supply chain management of Walmart is not dependent entirely on technology. Walmart has an extensive network of approximately one hundred and sixty distribution locations. In addition, the retailer instituted or developed cross-docking in its warehouses, a strategy that transfers inventory directly from departing or arriving trucks. The strategy allows products to be moved from arriving trucks to trucks heading to store without long storage within the warehouse (Ray, 2010). The result is reduced transportation, less time spent on transiting products, and lower costs/expenditure for inventory storage. Besides, the company utilizes its trucking drivers and fleet, sustaining high minimum standards for many drivers (Ray, 2010).
Strategies Walmart uses to Distribute Products Globally
Walmart’s overall strategy of SCM differs from the primary components of SCM: purchasing, operations, integration, and distribution. Nevertheless, the company has refined the strategies. Walmart’s supply chain starts with purchasing manager responsible for determining products to be sold, locating vendors, as well as arranging products’ deals. Supply chain ensures products are moved from manufacturing plants or warehouses to stores and finally to customers. Supply chain integration guarantees linkage of workflow as well as information about all links within SCM to maximize efficiencies (Leeman, 2010).
How Walmart addresses risk in Supply Chain Management
The company has instituted measures, for example, increasing factory audits, setting stricter suppliers’ standards, lengthening the penalty duration for approved industrial units to a year from ninety days, and expanding certification program to many countries. In addition, agents or suppliers choosing to subcontract must inform management of Walmart. Besides, the company has fire safety codes, which is written or documented into contracts with suppliers.
How Walmart meet Business Demands
The operation department of the company's supply chain concentrates on demand planning, inventory, and forecasting management. Forecasts approximate customer demands dependent on historical information, external drivers like promotions, competition, sales, and changes in trends. Demand planning is employed to establish precise forecasts, a significant move towards successful inventory management. Comparison between forecasts and inventory levels are done to guarantee warehouses have adequate inventory to satisfy or meet demand (Radhakrishnan, 2011).
Leeman, J. J. (2010). Supply Chain Management: Fast, Flexible Supply Chains in Manufacturing and Retailing. Norderstedt: Books on Demand.
Radhakrishnan, P. (2001). Proceedings of the 1st international conference on logistics and supply chain management. Allied Publishers.
Ray, R. (2010). Supply chain management for retailing. New Delhi: Tata McGraw-Hill Education.
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