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Wal Mart Case Study

4311 words - 18 pages


Walmart Case Study: Half a Century of Supply Chain Management

SCM 607
Dr. John Wu
March 15, 2014

Table of Contents
Economy 8
Customer Behavior 8
Technology 8
Politics & Legal Aspects 8
Company Culture 9
Operations 9
Purchasing & Suppliers 10
Inventory 10
Logistics 10
Strengths 11
Procurement 11
Distribution 12
Store Network 12
Information Systems 13
Weaknesses 14
Procurement 14
Store Network 14
Human Resources 14
Focusing on the Supply Chain 14
Opportunities 15
Focusing on the Supply ...view middle of the document...

Walmart grew in large part by leveraging information systems to an extent never before seen in the retail industry. Technology tightly coordinates the Walmart value chain from tip to tail, while these systems also deliver a mineable data asset that is unmatched in U.S. retail. Tight inventory management is legendary at Walmart through its just-in-time techniques that allow the firm to boast one of the best supply chains in the world. Walmart has not only transformed its own supply chain, but also influenced how vendors throughout the world operate because the company has the economic clout to request changes from its vendor partners and to receive them. Recognized for its ability to obtain merchandise from global sources, Walmart also pioneered the strategy of achieving high levels of growth and profitability through its precision control of manufacturing, inventory, and distribution. Although the company is not unique in this regard, it is by far the most successful and most influential corporation of its kind and has put into practice various innovative techniques. To get a sense of the firm’s overall efficiencies, at the end of the prior decade a study found that Walmart was responsible for some 12% of the productivity gains in the entire U.S. economy.
When Walmart does something, it does it on a massive scale. Walmart’s computer system, for example, is second only to that of the Pentagon in storage capacity. Its information systems analyze more than 10 million daily transactions from point-of-sale data and distribute their analysis in real time both internally to its managers and externally via a satellite network to Walmart’s many suppliers, who use the information for their production planning and order shipment.
Much of the popularity of supply chain management has been attributed to the success of Walmart’s partnership with Procter & Gamble (P&G). During the 1980s, the two collaborated in building one of the first Collaborative Planning, Forecasting, and Replenishment (CPFR) systems, a software system that linked P&G to Walmart’s distribution centers, taking advantage of advances in the world’s telecommunications infrastructure. When a Walmart store sold a particular P&G item, the information flowed directly to P&G’s planning and control systems. When the inventory level of P&G’s products at Walmart’s distribution center got to the point where it needed to reorder, the system automatically alerted P&G to ship more products. This information helped P&G plan its production. Walmart was also able to track when a P&G shipment arrived at one of its distribution warehouses, which enabled it to coordinate its own outbound shipments to stores. Both Walmart and P&G realized savings from the better inventory management and order processing, savings that in turn were passed on to Walmart’s consumers through its everyday low prices.
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