Supply-Chain and Inventory
Global Supply Chain Management
Wal-Mart is a complex organization with many different types of stores. Through understanding the different kinds of stores that the company offers its customers you can begin to understand the company. To deliver goods to the thousands of stores that Wal-Mart has needs to be understood as well. This paper states a brief overview of how Wal-Mart’s supply-chain works. Then we dive into some of in stock issues that Wal-Mart is having. After this the paper goes into some its sustainable practices within its supply-chain.
Wal-Mart is a $466 billion dollar ...view middle of the document...
S. They are about 36,00 square feet (Annual Report, 2010).
Wal-Mart Express: These are small format stores about the size of a Wal-Greens. It is a small grocery store with some general merchandise and it also includes a pharmacy. These stores focus on rural and urban centers.
Part 1: Overview of Wal-Mart’s Supply Chain
Procurement: Being a low cost retailer Wal-Mart takes its time to meet with vendors and learn about their cost structure. Wal-Mart has been known to fight with vendors to get the lowest price possible out of them. Buyers bring vendors to the Wal-Mart Headquarters for their meetings. They sit in little rooms with very cheap plastic chairs and tables. I have seen these rooms and it is hard to believe that million dollar deals are made there.
Distribution: Each Wal-Mart distribution center is divided in to different sections based on the quantity of goods that it receives. The distribution centers have a very sophisticated bar code system that keeps track of goods that come and go from the centers. The employees of the center also verify that the right good is matched with the right barcode.
Logistics Management: It has been said that Wal-Mart’s logistics is only second to the U.S. Military. They have a well-oiled strategy in place to get goods to the right place, in the right quantities, at the right time. Wal-Mart’s goods are mostly moved on trucks from a Wal-Mart distribution center to a store. Wal-Mart drivers then report their hours to a coordinator. The coordinator is the one that schedules the deliveries. To make the distribution process more efficient Wal-Mart uses a technique called cross docking. “In this system, the finished goods are directly picked up from the manufacturing plant of a supplier, sorted out and then directly supplied to the customer (p.5 Chandran, 2005).” “To gain maximum efficiently out of cross-docking, Wal-Mart had to make fundamental changes in its approach. Traditionally, decisions about merchandising, pricing and promotions had been highly centralized. The system shifted the focus from “supply chain to the “demand chain (p.6 Chandran, 2005).” This meant more of a pull system. Basically this meant that there had to be a lot of cooperation between stores, distribution, and suppliers.
Inventory Management: IT and communications are things Wal-Mart has spent a lot of money on to keep track of its inventory. One major investment was in its own satellite communication system in 1983. Sam Walton explained the benefits of the system, ”I can walk in the satellite room, where our technicians sit in front of the computer screens talking on the phone to any stores that might be having a problem with the system and just looking over their shoulders for a minute or two will tell me a lot about how a particular day is going. On the screen, I can see the total of the day’s bank credit sales adding up as they occur (p.6Chandran 2005).”
Another major innovation made by...