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Walmart: Supply Chain Management – Case Solution

The Walmart: Supply Chain Management case study discusses the cost-saving strategy of the company and its supply chain management strategy. It focuses on how the company manages its supply chain in comparison with its competitors.

​P. Fraser Johnson and Ken Mark Harvard Business Review ( W19317-PDF-ENG ) July 08, 2019

Case questions answered:

• Analyze the Walmart supply chain. Do you think their capabilities are a competitive advantage for Walmart? Why yes or why not?
• How is Walmart managing its supply chain? Compared it with its competitors?
• What are the most important business challenges Walmart faces and what implications do they have have for its supply chain?
• If you were Doug McMillon, president, and CEO of Walmart, what would be your strategic plan to improve Walmart’s supply chain and why?
• Where are the greatest opportunities to improve efficiency?
• How do you think this plan would help Walmart to compete against Amazon?

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Walmart: Supply Chain Management Case Answers

1. analyze the walmart supply chain. do you think their capabilities are a competitive advantage for walmart why yes or why not.

According to Barnes (2001), capabilities can be understood as a certain set of business developments that are being understood strategically. Every firm delivers value to its customers through these business developments. Stalk et al. (2015) dispute that a firm’s business processes can be used to achieve a competitive advantage, provided that they are being seen as strategic capabilities. As such, Walmart’s supply chain practices assist in attaining multiple competitive advantages, such as cost-saving strategies and better client service and solutions delivery procedures.

Walmart implemented an ¨everyday low-price¨ (EDLP) strategy as its business model to reduce the costs and investments related to its operations.

Thus, Walmart’s supply chain plays a major role in maintaining this “good-deal” strategy. This strategy consists of the following key practices:

The primary and fundamental reason behind Walmart’s successful competitive advantage relates to the intensive involvement of customers, partners, suppliers, and management.

For instance, Walmart has an excellent and long-term affiliation with its suppliers due to two reasons. Walmart offers suppliers large orders and commits to them for a relatively long time. by using Electronic Data Interchange with its suppliers (EDI).

EDI is a standard format used for exchanging firm documents and making up communication and translation (8th and Walton, 2013). Thanks to this, Walmart creates coordination between suppliers tightly in product delivery schedules, thus minimizing potential risks involved.

Walmart’s second strategy involves utilizing global merchandising centers to acquire merchandise in bulk for lower prices. The company adopts the cross-docking strategy, in which the company avoids the storage of goods during the transportation process.

Instead, the company transfers the products between trucks. Right before the products reach these trucks, the packaging is changed. The tags are being attached to save on the inventory costs and the transportation itself and save on transportation time. This strategy allows Walmart to send unsold products (Black hauls) back to its suppliers, a cost-saving method (Lu, 2018).

Finally, Walmart is the first company to incorporate UPCs (Universal Product Codes) for their transactions to enhance the quality of inventory and supply chain.

The codes will be transferred into a collection of data connected to the global satellite system. Lu (2018) believes that this data collection provides multiple benefits in forecasting the demand and telling the real-time sales from the registers in the stores.

Moreover, thanks to the invention of the RFID (Radio Frequency Identification) tags in shelves, docks, recycled areas, and docks, Walmart managed to save $500 million a year on average. This inventory reduction has made the communication process easier at the same time.

Applying and managing the inventory with the newest technology in distribution methods, for example, the implementation of ¨shelf-scanning¨ robots, etc., will result in a highly efficient supply chain process and a low rate of the ¨bullwhip effect¨.

This occurs when a lack of communication between the supply links causes the inventory to pile up as a reaction to demand ¨spikes¨.

Clayton M. Christensen (2001) provides some insights regarding Walmart’s Supply Chain in his book, ¨The Past and Future of Competitive Advantage¨. He states that ¨competitive advantage is a concept that often inspires in strategists a form of idol worship – a desire to imitate the strategies that make the most successful companies successful¨.

The fact that Walmart was one of the first companies to (successfully) implement data-based decisions regarding their operations processes led to a ¨copycat¨ trigger in other comparable companies, according to Ken Mark (2019). The latter confirms that the capabilities of Walmart are indeed a competitive advantage for the company.

2. How is Walmart managing its supply chain? And compared with their competitors?

Walmart believes in selling merchandise to customers at discounted prices or below standard to gain profit, using developed structure and advanced supply chain management strategies as a competitive strategy. Thus, Walmart has become one of the market leaders and has maintained its status for a long period.

The company applies…

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Walmart Supply Chain: Building a Successful Integrated Supply Chain for Sustainable Competitive Advantage

• Case Studies

Introduction

The global business landscape has witnessed an increasingly fierce competition, pushing companies to seek effective strategies to maintain and enhance their competitiveness. Among these strategies, the role of supply chain capability stands out as a key factor in driving success. A well-optimized supply chain not only ensures efficient delivery and cost-effectiveness but also provides companies with a competitive advantage in the market. In this context, Walmart, the world’s largest retailer, has demonstrated a highly successful and integrated Walmart supply chain, propelling its growth and dominance in the retail industry.

This case study aims to delve into the significance of supply chain capability for enhancing a company’s competitiveness and how it serves as a competitive advantage for companies. Additionally, we will explore the imperative need for supply chain redesign in the global economy to adapt to the challenges of the modern era of globalization. Focusing on Walmart’s exemplary supply chain practices, the purpose of this case study is to analyze the features of its successful integrated supply chain while identifying relevant issues in the context of the current globalized market.

[Read More: Rivian: Navigating Supply Chain and Operational Challenges and Embracing Growth ]

Walmart’s Supply Chain: Integrated Supply Chain Success

Data-driven success factors.

In the realm of modern supply chain management, data-driven strategies play a pivotal role in enhancing a company’s competitiveness. Walmart’s remarkable success as the world’s largest retailer can be attributed to its astute utilization of data analysis and advanced technologies within its integrated supply chain. This section delves into the key data-driven success factors that have propelled Walmart’s supply chain to the forefront of the retail industry.

[Read More: ERP Master Data: A Guide to Improve Quality & Governance ]

Role of Data Analysis through Barcode Scanning and Point-of-Sale Systems

Data analysis is at the core of Walmart’s supply chain prowess. The company has implemented sophisticated barcode scanning and point-of-sale systems to collect real-time data from its stores. By employing these technologies, Walmart gains valuable insights into customer buying behavior, sales trends, and inventory levels. The ability to analyze this data enables the retail giant to make informed decisions on product procurement, inventory management, and demand forecasting.

Efficient Supply Chain Practices: Automated Distribution Centers and Computerized Inventory Systems

Automation is a key component of Walmart’s efficient supply chain practices. The company has strategically invested in automated distribution centers, streamlining the flow of products from manufacturers to stores. These automated facilities not only optimize the handling and movement of goods but also enable faster order fulfillment and replenishment. Additionally, computerized inventory systems provide Walmart with accurate and up-to-date information about stock levels, allowing for precise inventory control and reducing the risk of stockouts or excess inventory.

Utilizing Walmart’s Own Trucking System and Cross-Docking Logistics

Another critical factor contributing to Walmart’s supply chain success is the utilization of its private trucking system and cross-docking logistics. By maintaining its own trucking fleet, Walmart gains greater control over transportation and delivery schedules, leading to improved efficiency and timely product replenishment. Furthermore, the adoption of cross-docking logistics techniques has enabled Walmart to minimize the need for intermediate storage, leading to reduced handling costs and faster product movement through the supply chain.

[Read More: The Ultimate Guide to Contract Logistics: What You Need to Know ]

Information Technologies Driving Efficiency

In Walmart’s journey towards becoming a global leader, information technologies have played a pivotal role in driving efficiency within the integrated Walmart supply chain. The retail giant has strategically adopted various IT initiatives to optimize its operations, enhance collaboration with suppliers, and achieve real-time inventory targeting. These technologies have contributed significantly to Walmart’s supply chain success, allowing them to maintain a competitive edge in the retail industry.

Collaborative Planning, Forecasting, and Replenishment (CPFR)

One of the key information technologies that have bolstered Walmart’s supply chain efficiency is the implementation of Collaborative Planning, Forecasting, and Replenishment (CPFR). This system facilitates seamless communication and coordination between Walmart and its supply chain partners, including suppliers and distributors. By sharing real-time sales data and demand information, CPFR enables accurate forecasting and demand planning, minimizing information distortion, and promoting synchronized inventory replenishment. The CPFR program has been instrumental in enhancing overall supply chain visibility and efficiency, allowing Walmart to respond promptly to fluctuations in demand and supply, reducing stockouts, and optimizing inventory levels.

Vendor-Managed Inventory (VMI) and Its Benefits

Walmart’s adoption of Vendor-Managed Inventory (VMI) has been another critical information technology-driven initiative. Through VMI, Walmart empowers its suppliers to take on the responsibility of managing their inventory stored in Walmart’s warehouses. By granting suppliers access to real-time inventory data and sales information, Walmart facilitates efficient inventory tracking and replenishment. This hands-on approach by suppliers results in streamlined inventory management, reduced delays in replenishment, and lower stockouts. The VMI model has proved particularly advantageous for Walmart due to its vast product range and numerous suppliers, making inventory management complex and costly if managed solely by the retailer.

[Read More: Vendor Managed Inventory: A Comprehensive Guide ]

Leveraging RFID Technology for Real-Time Inventory Targeting

RFID (Radio Frequency Identification) technology has been a game-changer in Walmart’s pursuit of real-time inventory targeting and enhanced supply chain visibility. By employing RFID tags on products, Walmart can track the movement of inventory throughout the supply chain in real-time. RFID enables accurate and automated inventory tracking, reducing the need for manual counting and minimizing errors in inventory management. The technology also provides crucial details, such as production time, location, and expiry dates of goods, allowing for efficient inventory targeting and better control over inventory turnover. RFID technology has been instrumental in Walmart’s cost reduction efforts, ensuring optimal stock levels while avoiding overstocking and unnecessary inventory holding costs.

Achieving Competitive Advantage through Strategy

Walmart’s competitive strategy: “everyday low prices” (edlp).

Walmart’s competitive advantage is deeply rooted in its strategic focus on offering “Everyday Low Prices” (EDLP) to its customers. The EDLP strategy revolves around providing high-quality products and services at the lowest possible prices, ensuring that customers can benefit from affordable prices every day. This approach sets Walmart apart from its competitors and has been instrumental in establishing the company as a dominant force in the retail industry.

Implementing the “Everyday Low Costs” (EDLC) Policy through Direct Procurement

To support its EDLP strategy, Walmart follows an “Everyday Low Costs” (EDLC) policy in its supply chain management. One of the key elements of the EDLC policy is the direct procurement of items from suppliers, eliminating intermediaries in the process. By procuring directly from manufacturers, Walmart can negotiate and understand their cost structure, enabling them to make informed purchasing decisions and obtain the best prices for their products.

Walmart’s emphasis on direct procurement is further bolstered by the use of technology and information systems. The company has implemented a central database, store-level point-of-sale systems, and a satellite network, along with barcodes and RFID technology as previously mentioned. These technologies allow Walmart to gather and analyze real-time store-level information, including sales data and external factors like weather forecasts, to enhance the accuracy of purchasing predictions. This integration of information technology helps Walmart optimize its procurement process and maintain low costs throughout the supply chain.

Utilizing Information Systems for Better Inventory Management

Effective inventory management is critical for Walmart to sustain its competitive advantage through the EDLP strategy. The company relies on information systems and information technology (IT) capabilities to control inventory levels efficiently. By capturing customers’ demand information, Walmart can identify popular products and stock them adequately, leading to an overall reduction in inventory.

One notable example of Walmart’s successful utilization of information systems is its collaboration with Procter & Gamble (P&G) through the Collaborative Planning, Forecasting, and Replenishment (CPFR) program. This program links all computers of P&G to Walmart’s stores and warehouses, allowing for efficient replenishment orders based on real-time inventory needs. Additionally, Walmart’s Retail Link , developed in the early 1990s, serves as another vital IT application for storing data, sharing it with vendors, and aiding in shipment routing assignments.

Challenges and Opportunities

Supplier cooperation and collaboration.

Walmart’s supply chain success can be attributed to its strong relationships with suppliers, but achieving and maintaining supplier cooperation and collaboration is not without challenges. Let’s explore the challenges and opportunities in this area:

Challenges in Obtaining Suppliers’ Cooperation

• Supplier Resistance to Direct Procurement: Walmart follows an “Everyday Low Costs” (EDLC) policy by directly procuring items from suppliers, eliminating intermediaries. However, some suppliers may be reluctant to cooperate with this approach as it can disrupt existing distribution channels and potentially reduce their bargaining power.
• Complex Supplier Networks: With thousands of suppliers across various product categories, managing diverse supplier networks can be challenging. Each supplier may have different production and delivery schedules, making coordination difficult.
• Balancing Profit Margins: As Walmart emphasizes low prices, maintaining a balance between cost savings and ensuring suppliers’ profitability can be a delicate task. Suppliers may resist pressure to reduce prices further to maintain their margins.

Opportunities for Enhanced Supplier Cooperation and Collaboration

• Establishing Transparent Communication Channels: Walmart can create transparent and open communication channels with its suppliers to foster better cooperation. Clear communication regarding demand forecasts, inventory levels, and potential disruptions can help suppliers plan their production and deliveries more efficiently.
• Supplier Incentive Programs: Introducing incentive programs that reward suppliers for meeting certain performance metrics, such as on-time delivery or cost reduction, can motivate suppliers to actively collaborate and improve their supply chain capabilities.
• Collaborative Planning, Forecasting, and Replenishment (CPFR): Walmart can leverage technology, such as CPFR, to share real-time sales data and demand forecasts with its suppliers. This collaborative approach allows suppliers to align their production and inventory management with actual market demand, reducing the bullwhip effect and optimizing the supply chain.
• Sharing Inventory Visibility: Providing suppliers with access to inventory data, including stock levels and sales information, can help them plan production and deliveries more effectively. This visibility can prevent stockouts and overstocking issues.
• Long-term Partnerships: Building long-term strategic partnerships with key suppliers can create a sense of mutual commitment and trust. By assuring consistent business over an extended period, Walmart can foster stronger relationships and supplier loyalty.

[Read More: 3 Types of Supplier Segmentation Matrix You Can Use to Classify Suppliers ]

Importance of Collaboration to Enhance Supply Chain Efficiency

• Reducing Lead Times: Effective collaboration with suppliers can help shorten lead times by streamlining production and transportation processes. Faster lead times enables Walmart to respond quickly to changes in demand, reducing the risk of stockouts.
• Efficient Inventory Management: Collaborative efforts with suppliers enable better inventory planning and management. Suppliers can adjust production based on actual demand, reducing excess inventory and associated costs.
• Supply Chain Flexibility: Collaboration fosters agility and adaptability in the supply chain. When Walmart and its suppliers work together closely, they can quickly adjust to market changes, supply disruptions, or new opportunities.
• Cost Reduction: Improved supplier collaboration can lead to cost-saving opportunities. By eliminating unnecessary intermediaries and optimizing production and transportation, overall supply chain costs can be minimized.

The Incentives Alignment Issue

In any supply chain, maintaining a balance of profit margins among different parties is essential for efficient collaboration and sustained success. However, achieving incentives alignment can be challenging, and this issue is particularly relevant in the case of Walmart supply chain. Addressing misalignment of interests between Walmart and its suppliers is crucial for optimizing the overall performance of the supply chain and ensuring long-term success. The following points highlight the incentives alignment issue faced by Walmart:

1. Balancing Profit Margins Among Different Supply Chain Parties:

Walmart’s success is attributed to its ability to offer high-quality products and services at the lowest affordable prices. To achieve this, Walmart employs various cost-cutting strategies, such as direct procurement from suppliers and streamlined distribution practices. While these strategies help Walmart maintain competitive prices, they can create challenges for suppliers who may face pressure to lower their own profit margins to meet Walmart’s demands. This misalignment of profit margins can lead to strained relationships and potentially impact the overall efficiency of the supply chain.

2. Misalignment of Interests Between Walmart and Suppliers:

Walmart’s size and market dominance can lead to power imbalances in supplier relationships. Suppliers may feel compelled to comply with Walmart’s demands to maintain access to its large customer base. However, this can lead to situations where suppliers may not have enough leverage to negotiate favorable terms, impacting their own profitability. As a result, suppliers may be less inclined to invest in innovations or improvements that would benefit the supply chain as a whole.

3. Conflict Between Inventory Growth and Sales Growth:

Walmart faced inventory growth issues in the past, with the inventory growth rate outpacing the sales growth rate. This can be indicative of conflicting incentives between Walmart and its suppliers. Suppliers may prioritize producing and delivering more inventory to ensure they meet Walmart’s demands, even if the sales growth does not keep up with the increased inventory. This misalignment can lead to excess inventory, increased carrying costs, and potential stockouts.

4. The Need for a New Triple-A Supply Chain:

Addressing the incentives alignment issue requires a fundamental shift in the supply chain strategy. Lee (2004) proposed the concept of a new Triple-A supply chain for Walmart and other companies in the 21st century. The Triple-A supply chain emphasizes agility, adaptability, and alignment to create a sustainable competitive advantage. Achieving alignment among all participating parties is crucial to optimize supply chain performance and ensure that risks and rewards are distributed fairly.

The Triple-A Supply Chain Approach

In today’s competitive business landscape, companies like Walmart recognize that a successful supply chain is not just about having a fast and cost-effective system. To maintain a sustainable competitive advantage and address the challenges of the global economy, it is essential to redesign supply chains that incorporate agility, adaptability, and alignment. This section explores the concept of the Triple-A Supply Chain Approach, which emphasizes these three key qualities that an ideal supply chain should possess: agility, adaptability, and alignment of interests among all participating parties.

The Three Qualities of an Ideal Supply Chain

Agility for quick and cost-effective responses:.

Agility refers to a supply chain’s ability to respond quickly and cost-effectively to sudden changes in demand, supply, and external disruptions. In the fast-paced business environment, companies must be able to adapt swiftly to fluctuations in customer preferences, market conditions, and unforeseen events. For Walmart, agility has been a critical factor in maintaining its leadership position in the retail industry. The company’s investments in technology and supply chain optimization strategies have allowed them to optimize inventory levels and respond rapidly to changing customer demands, ensuring the availability of products while minimizing inventory costs.

Adaptability to Handle Changes in Demand and Supply:

Supply chains should be adaptable and flexible enough to handle variations in demand and supply patterns. Demand forecasts can be uncertain, and unexpected supply chain disruptions may occur, making adaptability a vital quality. Walmart’s focus on omnichannel and various fulfillment options, such as in-store pickup and ship from store, demonstrates their commitment to adaptability. By utilizing multiple channels, Walmart can cater to diverse customer preferences, ensuring an uninterrupted flow of products to meet demand.

Alignment of Interests among All Participating Parties:

One of the significant challenges in supply chain management is ensuring alignment of interests among all parties involved, including suppliers, manufacturers, distributors, and retailers. Walmart’s scale and dominance in the retail market have allowed them to establish strong relationships with vendors, enabling strategic partnerships with vendors who can meet their high-volume demands. Additionally, Walmart’s adoption of Vendor Managed Inventory (VMI) allows suppliers to manage their own inventory stored in Walmart’s warehouses. This collaboration aligns the incentives of suppliers and Walmart, streamlining inventory management and ensuring timely replenishment.

In conclusion, Walmart’s integrated supply chain has been a crucial factor in the company’s global dominance and sustained competitive advantage. By strategically investing in technology and optimizing its supply chain, Walmart has managed to maintain its position as the world’s largest retailer with over $572 billion in revenue in 2022.

Walmart’s success serves as a compelling example of the importance of a well-integrated supply chain in achieving and sustaining competitive advantage in the global market. As businesses continue to navigate the complexities of the 21st-century economy, building and enhancing supply chain capabilities will remain a critical aspect of ensuring sustainable growth and profitability. By prioritizing agility, adaptability, and alignment, companies can follow in Walmart’s footsteps and position themselves for continued success in the dynamic and ever-evolving global marketplace.

References:

• Lee H.L. (2004): The triple A supply chain. “Harvard Business Review”, Vol. 82, No. 10, pp. 102-112. 
• Nguyen T.T.H. (2017): Wal-Mart’s successfully integrated supply chain and the necessity of establishing the Triple-A supply chain in the 21st century. “Journal of Economics and Management”, Vol. 29(3), pp. 102-117

About the Author –  Dr Muddassir Ahmed

Dr MuddassirAhmed  is the Founder & CEO of SCMDOJO. He is a  global speaker ,  vlogger  and  supply chain industry expert  with 17 years of experience in the Manufacturing Industry in the UK, Europe, the Middle East and South East Asia in various Supply Chain leadership roles.   Dr. Muddassir   has received a PhD in Management Science from Lancaster University Management School. Muddassir is a Six Sigma black belt and founded the leading supply chain platform SCMDOJO to enable supply chain professionals and teams to thrive by providing best-in-class knowledge content, tools and access to experts.

You can follow him on  LinkedIn ,  Facebook ,  Twitter  or  Instagram .

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Walmart: Supply Chain Management

By: P. Fraser Johnson, Ken Mark

This case focuses on the supply chain strategy of Walmart. Set in 2019, it provides a detailed description of the company's supply chain network and capabilities. Data in the case allows students to…

• Length: 16 page(s)
• Publication Date: Jul 8, 2019
• Discipline: Operations Management
• Product #: W19317-PDF-ENG

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This case focuses on the supply chain strategy of Walmart. Set in 2019, it provides a detailed description of the company's supply chain network and capabilities. Data in the case allows students to compare Walmart's source of competitiveness with those of other retailers-both online including Amazon.com and traditional brick-and-mortar retailers, such as Target-to develop insights into the management of a large, complex, global supply chain network. As competition between Walmart and its online and offline competitors heated up, a key challenge for the company's president and chief executive officer was deciding what changes made to Walmart's expanding supply chain would best support its strategic objectives. What supply chain capabilities would Walmart need as its business model continued to evolve?

Learning Objectives

This case can be used in an undergraduate or MBA course in supply chain management, operations management, business strategy, international business, logistics, purchasing, or marketing. It can provide an introduction to supply chain management using a company with which most students are familiar. In doing so, it allows students to learn how Walmart has built up its supply chain capabilities over the past five decades, and how the company leveraged these capabilities to become the world's largest retailer. Combining the Walmart case with the "Amazon.com: Supply Chain Management" case (W18451) in back-to-back classes provides a powerful illustration of the differences between two leading companies and demonstrates the importance of alignment of supply chain competencies with organizational strategy. After completion of this case, students will be able to: Assess Walmart's supply chain and identify its key competitive advantages. Quantify Walmart's ability to generate value from its supply chain. Identify potential opportunities and challenges for Walmart to improve its supply chain. Analyze the effects of the opportunities and challenges facing Walmart on its growth and evolution.

Jul 8, 2019 (Revised: Sep 9, 2019)

Discipline:

Operations Management

Geographies:

United States

Industries:

Retail trade

Ivey Publishing

W19317-PDF-ENG

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WALMART SUPPLY CHAIN BEST PRACTICES | MBA CASE STUDY

Let’s take a look at Walmart Supply Chain best practices. Walmart has one of the most sophisticated and efficient supply chains in the world. It has been constantly evolving since the company was founded in 1962.

In the early days, Walmart’s supply chain was relatively simple. The company would order goods from manufacturers and then ship them directly to its stores. However, as Walmart grew, its supply chain became more complex. The company began to work with more suppliers and to move goods around the world.

In the 1980s, Walmart began to invest heavily in technology to improve its supply chain. The company implemented a computer system that allowed it to track inventory levels and forecast demand. It also began to use radio frequency identification (RFID) tags to track the movement of goods.

These investments helped Walmart to improve the efficiency of its supply chain. The company was able to reduce costs, improve accuracy, and speed up the delivery of goods to its stores.

Walmart Today

Today, Walmart’s supply chain is a global network that spans over 10,500 stores in 24 countries. The company works with over 100,000 suppliers and moves billions of products each year.

Walmart’s supply chain is still evolving. The company is constantly looking for ways to improve efficiency and sustainability. It is also investing in new technologies, such as artificial intelligence and blockchain, to further streamline its operations.

Walmart’s supply chain is a major competitive advantage. It allows the company to offer low prices and a wide selection of products to its customers. It also helps Walmart to respond quickly to changes in demand.

Here are some of the key factors that have contributed to the success of Walmart’s supply chain:

• Centralization:  Walmart has centralized its supply chain operations. This has allowed the company to improve efficiency and coordination.
• Technology:  Walmart has invested heavily in technology to improve its supply chain. This includes the use of RFID tags, computer systems, and big data analytics.
• Collaboration:  Walmart works closely with its suppliers to improve the efficiency of its supply chain. This includes sharing data and working together to solve problems.
• Sustainability:  Walmart is committed to sustainability. This is reflected in its supply chain, where the company is working to reduce waste and emissions.

Walmart’s supply chain is a complex and ever-evolving system. However, the company’s commitment to efficiency, collaboration, and sustainability has helped it to create one of the most successful supply chains in the world.

Walmart and P&G Partnering

Walmart and P&G partnered to make a breakthrough in supply chain by sharing data and collaborating on new technologies.

In the late 1980s, Walmart was struggling to keep up with demand. The company was growing rapidly, and its supply chain was not able to keep pace. P&G, on the other hand, was having difficulty getting its products onto Walmart’s shelves.

The two companies decided to partner to find a solution. They began by sharing data about inventory levels and customer demand. This allowed them to better coordinate their supply chains and ensure that the right products were in the right place at the right time.

Walmart and P&G also worked together to develop new technologies to improve their supply chain efficiency. For example, they developed a system called Continuous Replenishment Program (CRP). CRP uses real-time inventory data to automatically trigger shipments of products from P&G to Walmart stores.

This partnership has been a huge success for both companies. Walmart has been able to improve its customer service and reduce costs. P&G has been able to increase sales and improve its profitability.

Here are some of the specific benefits that Walmart and P&G have gained from their partnership:

• Reduced inventory levels
• Increased sales
• Improved customer service
• Reduced costs
• Improved profitability

The partnership between Walmart and P&G is a model for how companies can work together to improve their supply chains. By sharing data and collaborating on new technologies, companies can create a more efficient and effective supply chain that benefits everyone involved.

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Wal-Mart’s Supply Chain Management Practices

January 8, 2010

Case Study Abstract

The focus of this case study is the supply chain of the world’s largest retailer, Wal-Mart. Wal-Mart in recent years has struggled with its supply chain. The big question is: Will Wal-Mart be able to revive the competitive advantage it had in the past with its efficient supply chain? This case discusses the supply chain management practices of Wal-Mart over the years. A brief of Wal-Mart’s past distribution, logistics and inventory management processes is covered. The use of innovative Information Technology (IT) practices to enable the supply chain is discussed and highlighted. The benefits or competitive advantage Wal-Mart derived over the years from its supply chain management practices is also covered.

Table of Contents

• Introduction – Can Wal-Mart sustain its Supply Chain Advantage?
• Wal-Mart in US Retail Market
• Wal-Mart – Company Background
• Wal-Mart – Timeline
• Wal-Mart: Quick Facts (Revenues, Total Employees and Stores, Competitors, Major Brands/Labels, Business/Growth Strategy)
• MANAGING THE SUPPLY CHAIN – THE WAL-MART WAY
• Pricing and Procurement Strategy
• Supply Chain Integration through Product/Process Knowledge Sharing
• Supply Chain Partnerships
• Distribution Strategy
• Logistics Management
• Cross Docking
• Inventory Management
• Store Formats
• Wal-Mart – International operating formats
• Related Reading
• Questions for discussion
• View sample pages of this case study

Case Study Keywords: Wal-Mart, Supply Chain Management, Retailing Strategy Case Study, Logistics and Distribution, IT enabled supply chain, Information Technology, Supply Chain Partnerships, supply chain integration, information sharing, inventory management, retail store formats, cross docking, pricing and procurement, Sam Walton, discount stores, walmart.com.

Case questions for discussion.

• Wal-Mart’s focus on supply chain management is responsible for its leadership in the retail industry. Discuss the distribution and logistics practices adopted by Wal-Mart. How far has Wal-Mart’s supply chain contributed to its competitive advantage? Explain.
• Companies that have significant buyer power and are very focused on exerting price pressure on their suppliers rather than seeking increased profitability through business process innovations. Support this statement with examples/best practices from your own field.
• Wal-Mart has always used innovative information technology tools to supplement its supply chain. In a few words, explain how use of IT tools/enabled processes have benefited Wal-Mart. How has IT impacted you/your department?
• What steps can Wal-Mart take in order to revive/sustain its supply chain advantage?
• Wal-Mart invited its major suppliers to develop profitable supply chain partnerships. Discuss how good/bad is sharing knowledge/critical information with vendors/suppliers or even customers?
• “It’s not a sale; it’s a great price you can count on every day to make your dollar go further at Wal-Mart.”, as quoted in the article, “Pricing Philosophy,” posted on www.walmart.com. Comment.

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• Tesco takes on US Wal-Mart

Case Updates/Snippets

• Wal-Mart’s new slogan – In September 2007, Wal-mart changed its slogan to “Save Money. Live Better.” Wal-Mart’s earlier slogan for 19 years was “Always Low Prices.”
• Benefits of shopping at Wal-Mart – According to a study by research firm Global Insight, Wal-Mart saves American families $2,500 each year. This figure rose from $2,329 in 2004 by 7.3 percent.
• Wal-Mart’s new slogan in 2011 : Wal-Mart’s latest tagline is “Low Prices. Every Day. On Everything.”
• Wal-Mart Online – Wal-Mart has 10,000 stores globally with annual revenues of more than $400 billion and 200 million weekly shoppers. According to Internet Retailer, it ranks six as in the largest Internet retailer list. Wal-Mart trails Amazon.com Inc, Staples Inc, Apple Inc, Dell Inc and Office Depot Inc. Wal-Mart does online business in United States, the UK, Canada and Brazil and does not reveal the percentage of online sales. Its digital technology unit called @WalmartLabs targets smartphones and social networking audience.

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Home » Management Case Studies » Case Study: Supply Chain Management of Walmart

Case Study: Supply Chain Management of Walmart

The world’s largest retailer Wal-Mart was founded by Sam Walton in the year 1962. He opened his first store in Rogers, Ark. On 31st October 1969, the company was incorporated as Wal-Mart Stores. Key success factor was the guidance of Sam. Presently they are operating in fifteen countries with more than 8,000 stores with 2.1 million employees (2009). Major features of Wal-Mart stores are its store area, cleanliness and its shelves which is filled with varieties of quality items that includes health care products, family apparels, electronic items, automotive products, hardware items, jewelry etc.

Wal-Mart is giving more emphasis for customer needs and tried to reduce cost through the effective usage of supply chain management system . In the year 2009, Fortune Magazine ranked Wal-Mart as first among other retailers in its survey. Sales were about 401 billion U.S dollars in the FY 2009. Sam Walton claims that Wal-Mart’s vision had always been to increase sales through lowering the costs through organized distribution system with the help of the Information Technology. It is said that Wal-Mart’s extreme success could be attributed to its effective supply chain management.

Wal-Mart’s efficiency in supply chain management was due to two key factors namely automated distribution center and the computerized inventory system. This brought in minimizing a lot of time the later not only reduced the checking out time but also recorded the transaction which is much needed to know envisage demand. Demand forecast is a constant issue which could be a threat when not handled properly. This is due to the fact that demand prediction is always inaccurate. Aggregation would be a remedy for this unpredictable demand.

Wal-Mart’s focus has always been to sell goods at a lower price to the customers. They ensured direct purchase form the companies bypassing the intermediaries. This by passing is one of the ways to reduce cost. Wal-Mart preferred small vendors to the big players however the vendor who provides the best price qualifies and gets the deal. This applies to the giants like P& G as well. Their practice these days had been choosing few vendors and they literally negotiate the best price the one that comes up with the best price qualifies. This does not blindly mean that they have been ruthless. Wal-Mart also work with the vendors for improving its supply chain efficiency.

Wal-Mart with its power distribution system made quite innovative changes like reducing paper work, reduced its lead time drastically, used bar codes to bill which recorded inventory levels and the access to the stock levels served as the valuable data for management. The movements of products are systematic and strategically aliened in a way that it reduces the most valuable time and cost and results in efficiency. Wal-Mart had a very effective rather responsive and flexible distribution system to transport goods from docks to stores. It educated the drives with the ethics and code of conduct which pictures their supply chain responsibility. Cross docking is one lethal weapon that was used by Wal-Mart in their SCM.

Cross Docking: Cross Docking is a method of handling goods. This happens when vendor and the company work together. This is the method of supplying the product in the right time and the said quantity. This cut down a lot of time. This also changed Wal-Mart’s way of looking things. This transitioned Wal-Mart from being a centralized management to almost decentralized system took a major turn in focus of pull strategy than a pull strategy.

Cross-docking is one of the techniques used by Wal-Mart. It means there is no unnecessary storage or little storage in between the loading and unloading of goods so that customer can enjoy the quality of the goods by first hand. Wal-Mart have logistics infrastructure which is very fast transportation system wherein the distribution centers are being serviced.   Wal-Mart assured that their drivers are capable of doing their jobs accordingly and do not cause unnecessary delays that can hamper the efficiency of the distribution operations.   To deliver it on time, the coordinators give information to the driver the expected time of arrival or delivery of the goods.

Point Of Sale: Information sharing is one of the most important things when it comes to SCM. P&G with its Pampers requested Wal-Mart to share its point of sale so that it could predict its demand more or less and work on the information to bring in efficiency. When Wal-Mart shared this information P&G could plan in advance and it with its efficient supply chain management could supply pampers to Wal-Mart on time.

Wal-Mart did not want to dedicate lot of space to pamper in its warehouse of shop store either. Instead the supply was taken care by P& G. This led the initiation of working with the vendors and coming out with huge efficiency by maintaining lower inventory and satisfying demand without stock outs. Thus point of sale sharing would be a key element for any company for its further scope of improvement and also when there is further scope of improvement there is a role for Supply chain management.

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Walmart China Case

Our people, your freight.

Yedaiah has a proven methodology for engaging customers using a collaborative solution development process to understand business needs., to tailor our solution to specifically deliver the objectives for our customer’s global supply chains., our core values:.

Innovative – Open and creative to customer and employee solutions.

Transparent Communication and Collaboration. We communicate openly.

Don’t fix what isn’t broken, unless it provides a road map to increased productivity.

Shared Goal & Initiative Alignment.We accomplish our goals more efficiently.

Our proactive approach to invoice consolidation and freight analysis reports.

We carry your trust.

With a global network and advanced logistics solutions, our air freight services provide., our clients, and what they say., delivered packages.

We strongly support best practice sharing across our operations around the world.

Countries Covered

As one of the world’s leading supply chain management companies.

Satisfied Clients

Provide best-in-class services across its integrated worldwide network.

Tons of Goods

Sustainability helps us reduce waste and share the benefits with our customers.

What makes us different?

What make us different.

"They have great service, quality products and we trust them. We value a local relationship and the impact it has on our community."      — Jason Manson

“It is a company we can count on. They are responsive, they bring new ideas and they care about the success of our organization. I’d recommend them to any athletic department.”      — Mr. Attkins

“We have a world-class supply chain that demands immediate response.Industriel came to us with creative, cost saving solutions related to inventory management. Last year we identified a 3% savings across one category.”      — Marcos Valtea

"Great job...thank you for getting this to us in an extremely short amount of time.hey also showed me ways to reduce costs in supply chain efficiencies. Industriel are always responsive and I know I can count on them to deliver.”      — Sandra Mitchel

"Dealing with Industriel on a day-to-day basis has proved to be very easy. We make a telephone call, look at the options available, and then let them get on with the job while we concentrate on our business.      — Robert Frost

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Case Study | Wal-Marts Supply Chain Management Practices

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Paper to be presented at conference on Global …

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Supply chain management is a key of retail enterprises survival and development. For a better understanding, we intended to illustrate this concept with the case of Wal-Mart and Carrefour in China. In this article, we focused on the Wal-Mart and Carrefour's supply chain management strategies in China, introduced the supply chain management from four parts. " Customer is the first consideration! " and " Thinking global and acting local " are also pertinent to application in the management of supply chains. Managers may identify key processes and consider the possible contributions of each to the efficiency of their own chains. Through comparisons of supply chain management between Wal-Mart and Carrefour's strategies in China to give Chinese local retail enterprises enlightenment, and should help those wishing to explore the uniqueness of the Chinese market and the challenges that will be encountered when expanding their businesses in China.

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After 18 months as the deputy managing director of the Russia subsidiary of a worldwide technology firm , a young and upcoming French executive prepared to hand over direction. The executive reflected on what he had achieved and how he considered next steps.

He desired to return to his native France, but the business requested that he go turn around another emergent market subsidiary. Should he go to India, ask for another duty, or look at other opportunities outside the firm?

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