Premium Essay

Walmart Supply Chain Management

In: Business and Management

Submitted By rajanagaiah
Words 2069
Pages 9
Supply Chain Management
Chapter – 5
Level-3 Project
Course: BADM 425 – Production and Operations Management
Instructor: Professor Tom Martin
Report Written by: Raja Vinjamuri (7291237)

Firm chosen: Walmart
Person Interviewed: Mr. Clay Peltier (Assistant Manager)
Report: Before, we discuss about the Supply chain management of Walmart, I would like to clarify their business philosophy, which is to keep prices as low as possible. Even if their margins weren't higher than competitors and in fact very less, they could make up for that in volume. Various factors like Technology combined with flawless Supply chain management, enables them to maintain such low costs. Now let’s see various elements of their supply chain management. The relationships of the firms in Supply chain: Normally any supply chain has a suppliers, manufacturers, distributors, wholesalers and retailers. Though walmart is technically considered as a retailer, in the words of one of its assistant manager of operations, “it is actually a wholesaler with a huge number of its own retail outlets”. Because Walmart supply chain has so many suppliers, as they sell a wide range of products they tend to do a lot of “Vertical integration” which is to own a major part of supply chain. Actually, based on types of integration of supply chain, they have various types of stores such as Walmart store U.S, Walmart Discount Stores, Walmart Supercenter, Sam's Club etc. So a supply chain integration connects the flow of work and information among all links in the supply chain to maximize efficiencies He also informed me that, “Walmart’s Supply chain begins with purchasing managers who determine which products will sell, and then forecasts estimate consumer demand for a product based on historical data, external drivers such as sales and promotions and changes in trends or competition”....

Similar Documents

Premium Essay

Role of the Counselor in Emergency Management Teams

...Supply Chain Innovations by Walmart By Institution Supply Chain Innovations by Walmart It is without a doubt that Walmart has achieved the greatest operational and logistical triumphs in history. According to Supply Chain Digest, Walmart operates more than 10,000 stores in 27 countries around the globe, stocks products manufactured in more than 70 countries and managed over $32 billion in inventory (Lu, 2015). With such kind of numbers, there is a need to have an efficient and effective supply chain management. Walmart has been able to achieve this through technology. Technology forms the foundation of its supply chain as it owns the biggest information technology infrastructure of all private companies in the world. Its State-of –the-art network design has allowed Walmart to precisely forecast demand, predict inventory levels, and manage service response logistics and customer relationships For example, Walmart becomes the first retailer to make use of the Universal Product Code bar codes that allowed for immediate collection and analysis of store level information. It went further to devise Retail Link, an enormous Bentonville database (Lu, 2015). With the help of a global satellite system, this database is linked to analysts who forecast demands of suppliers to the supplier network. This displays real-time sales information from cash registers to Walmart distribution centers. Manufacturers and suppliers within the supply chain bring together their demand......

Words: 689 - Pages: 3

Premium Essay


...Management Information Systems 13e KENNETH C. LAUDON AND JANE P. LAUDON CHAPTER 2 GLOBAL E-BUSINESS: HOW BUSINESSES USE INFORMATION SYSTEMS Walmart’s Retail Link Supply Chain CASE 1 VIDEO CASE Systems SUMMARY An introduction to Walmart’s Retail Link system, one of the largest B2B supply-chain systems in the world. Retail Link connects consumer purchase data to the Walmart purchasing system and to vendor supply systems. Retail Link plays a key role in Walmart’s corporate strategy to become the dominant low-cost provider of retail goods. L=7:13. URL CASE Walmart is a well-known leader in the application of network technology to coordinate its supply chain. Walmart’s supply chain is the secret sauce behind its claim of offering the lowest prices everyday. It’s able to make this promise because it has possibly the most efficient B2B supply chain in the world. It doesn’t hurt to also be the largest purchaser of consumer goods in the world. With sales of more than $443 billion for the fiscal year ending January 31, 2012, Walmart has been able to use information technology to achieve a decisive cost advantage over competitors. As you might imagine, the world’s largest retailer also has the world’s largest supply chain, with more than 60,000 suppliers worldwide. In the next five years, the company plans to expand from around 5,000 retail stores in the United States (including Sam’s......

Words: 927 - Pages: 4

Premium Essay

Wal Mart Case Study

...[;’p// Walmart Case Study: Half a Century of Supply Chain Management SCM 607 Dr. John Wu March 15, 2014 Table of Contents INTRODUCTION 4 BACKGROUND OF THE COMPANY 4 GOALS AND OBJECTIVES 5 KEY ISSUES 6 EXTERNAL ANALYSIS 7 Economy 8 Customer Behavior 8 Technology 8 Politics & Legal Aspects 8 INTERNAL ANALYSIS 9 Company Culture 9 Operations 9 Purchasing & Suppliers 10 Inventory 10 Logistics 10 SWOT ANALYSIS 11 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 Chain 15 New Initiatives and a Reorganization 15 Threats 16 Human Resources 16 DECISIONS 17 CONCLUSION 18 EXHIBIT 3 19 EXHIBIT 3 (continued) 20 EXHIBIT 3 (continued) 21 EXHIBIT 5 22 REFERENCES 23 Walmart Case Study: Half a Century of Supply Chain Management INTRODUCTION Walmart dominates the retailing industry in terms of its sales revenue, its customer base, and its ability to drive down costs and deliver good value to its customers. After all, the world’s largest corporation, employing 1.8 million associates worldwide, takes pride in having received numerous accolades for its ability to continuously improve efficiency in the supply chain while meeting its corporate mandate of offering customers everyday low prices. Walmart demonstrates how a physical product......

Words: 4242 - Pages: 17

Premium Essay


...To begin with, Walmart (the American multinational retailer corporation that runs chains of large discount department stores), has earned its reputation as the largest retailing company in the world. The man behind who started everything and laid down the basic principles and philosophy to be emulated by Wal-Mart people is Sam Walton, who found the company in 1962. Last year, Wal-Mart's annual sales were $350 billion and it had more than 8,500 stores in 15 countries and with over two million employees. It was in the early eighties that, in order to follow their business model based on a low price strategy, Wal-Mart placed heavy emphasis on developing and implementing tight supply chain solutions which has catapulted them not only to the top of the retail channel but into the history books. The four core principles that engulfs the overwhelming success of Walmart are; the focus on the improvement of sales, constantly reducing costs such that they will be able to capitalize on cost saving opportunities to be passed on the customers, the adoption of efficient distribution and logistics management systems to ensure the constant flow of the goods and the use of highly advantageous innovative information technology (IT) tools that makes the operating processes even faster, efficient and up to date. The key for the phenomenal growth of Walmart rely on the emphasis being placed in the customer needs and the reduction of cost through efficient supply management practices as......

Words: 1299 - Pages: 6

Premium Essay


...Walmart’s Supply Chain Management In the fiscal year of January 2015, Walmart had grosses of 486$ billion. That income came from more than its 4,500 stores in the U.S. They were able to jump from the 14th to the 13th position in research and analysis company Gartner’s annual ranking. That jump was mainly due to their well functioning and innovating supply chain. As Walmart stocks products made in more than 70 countries and at any moment, operates more than 11,000 stores in 27 countries around the world, having an effective and efficient supply chain management is imperative for the survival of the Walmart brand. Walmart’s has around 160 distribution centers of almost 120 million square feet and all within 130 miles of the stores it supplies. Sam Walton opened the first Walmart in 1962, and even in the first years the management of their supply chain was impressive. In the 1980’s Walmart began working directly with the manufactures in order to reduce costs. They introduced what they called the Vendor Managed Inventory (VMI), each manufacturer was responsible for their own products in Walmart’s warehouse. Furthermore, in order to reduce even further their costs, Walmart pursued strategic partnerships with most of its vendors, who where promised long term and high volume purchase in exchange of low costs. They also benefit from economies of scales; the volume purchased each year is so immense, that it gives huge bargaining power with its suppliers. They......

Words: 682 - Pages: 3

Premium Essay

Walmart Case Study

...5) Wal-Mart has implemented a Supply Chain Management System that serves middle level managers. The classification for this system is Management Information System. Supply Chain Management (SCM) - The main elements of a supply chain include purchasing, operations, distribution, and integration. Walmart’s Method of Managing the Supply Chain Walmart has been able to assume market leadership position primarily due to its efficient integration of suppliers, manufacturing, warehousing, and distribution to stores. Its supply chain strategy has four key components: vendor partnerships, cross docking and distribution management, technology, and integration. Walmart’s supply chain begins with strategic sourcing to find products at the best price from suppliers who are in a position to ensure they can meet demand. Suppliers then ship product to Walmart’s distribution centers where the product is cross docked and then delivered to Walmart stores. Cross docking, distribution management, and transportation management keep inventory and transportation costs down, reducing transportation time and eliminating inefficiencies. Technology plays a key role in Walmart’s supply chain, serving as the foundation of their supply chain. Walmart has the largest information technology infrastructure of any private company in the world “Massively Parallel Processor (MPP)”. Its state-of-the-art technology and network design allow Walmart to accurately forecast demand, track and predict inventory......

Words: 334 - Pages: 2

Premium Essay

Analysis of Green Supply Chain Management in the Retail Industry industrial development should be addressed throughout the supply chain. This had led to the emergence of the concept suggested to as Green Supply Chain Management (GSCM). This research provided a concise background and challenges of green supply chain through applying qualitative analysis on potential implementation in existing literature. This research was use secondary data to analyze a single case study, which is a case study of Walmart GSCM. Data was collected through a quality source by process of evaluating the information sources. The research analysis have shown seven strategies that used at Walmart: Identifying goals, metrics, and new technologies, Providing network partner assistance to suppliers, Certifying environmentally sustainable products, Incentive for green products, Consolidating direct suppliers, Developing a sustainable standard, and Zero waste. In a conclusion, it was possible to understand that GSCM is one of the emerging approaches for retail industry. This approach had help the company differentiates from its competition and made its supply chain more efficient. This paper was useful in providing suggestions to the retail industry and other industries to either modify the GSCM strategy adopted within organization in order to achieve the required target, or identify the most suitable GSCM strategy to be implemented. Keywords: Supply Chain Management, Retail industry, Green Supply Chain Chapter 1: Introduction The world is warming. The......

Words: 8726 - Pages: 35

Premium Essay

Supply Chain in Retail

...7-May-2013 1) Bullwhip effect defines as; It is a tendency of customer of material or product in short supply to buy more than they need in an immediate future (Bullwhip effect, 2010). There are several factors involved to cause bullwhip effect; overreaction to backlogs, neglecting to order in an attempt to reduce inventory, communication gap in supply chain, in-accurate demand forecasting etc. In order to deal with bullwhip effect, there are certain countermeasures to overcome the effect; proportional rationing schemes that encountered by assigning unit based on past sales. Vendor Managed Inventory (VMI) can overcome exaggerated demand forecast. Special purchase contracts that can be implemented in order to specify ordering at regular intervals to better synchronize delivery and purchase (Bullwhip effect, 2010). 2) The sales department of Volvo offered special deals which caused the increase in demand of green cars. The manufacturing department was not aware of the promotion and believed that consumers had started to like green cars (Michael Bean, 2006) 3) The bullwhip effect can be reduced by keeping prices low and keeping demand steady. This reduces periodic high inventory levels and the need to discount products (Ivey, 2011). VMI (vendor-managed inventory) is a model in which an accord is reached between the customer and the retailer based on customer demand. The customer to an extent decides the prices of the products in this model. Large amount of......

Words: 1683 - Pages: 7

Premium Essay

Walmart Supply Chain

...How should Wal-Mart rationalize its seafood supply chain to reduce costs and promote sustainability? Walmart has a large retail seafood business and it is always a challenge to reduce cost and promote sustainability. With upward trend for the demand of sea-food, depletion of the seafood supply is inevitable unless Walmart have a deep engagement of their supply chain. One strategy that Walmart wants to promote to their suppliers is for all of them to take up the Marine Stewardship Council’s certification program. This process will be time consuming, expensive and complex. The depletion of some fish poses a threat to Walmart and its seafood supply chain. Many challenges exists that will lead to indirect or direct increases in the cost of the supply chain. Because of the lengthy supply chain, with the fish travelling through many parties who are involved in catching, packaging, forwarding, and labeling, cost increases drastically. Wal-Mart’s customers are uneducated about the MSC Eco Label. Therefore, it will be costly to invest in certifying their fish with this standard while it may not boost their sales. While seafood supply can be sustainable by establishing fishing farms, there is always the concern for retaining the same quality as wild-caught fish. Therefore, Walmart needs solutions for the continuous supply of wild-caught fish while retaining its sustainability. In an effort to promote its sustainability, Walmart started to carry MSC certified Chilean Sea......

Words: 1018 - Pages: 5

Premium Essay

Walmart- Information Technology

...Walmart - Information Technology Rachel Thorne Fundamentals of Supply Chain Management BUS 3022 Gordon Flanders Walmart Information Management System (IMS) Walmart is a retail giant. Just about everyone in America has purchased something from them. It is a one stop shop for anything that a person could ever need. Walmart stores can be found just about anywhere, in fact most people are less than an hour drive away from a Walmart store. Walmart’s success has put many companies out of business. The chains success is primarily from low prices and using an information technology system to meet customer demands giving them a competitive advantage. Walmart’s first major use of information technology came in 1975 when the company leased an IBM computer system to track inventory in warehouses and distribution centers. (Wailgum, 2007) Computers have come a very long way since this time and are used almost everywhere. But in 1975 this was cutting edge technology and gave Walmart the competitive advantage over other retailers. Another thing that Walmart used to be revolutionary in their supply chain was the use of scanning barcodes in 1983. (Wailgum, 2007) Before barcodes objects had to be read by a skilled cashier. With barcodes all that was needed was a quick scan and the computer would do all the work. This greatly sped up checkout time and made tracking inventory and data collection much faster and easier for both customers and the employees. Since this time it...

Words: 1106 - Pages: 5

Premium Essay

Walmart Amazon Supply Chain

...MGMT90026 Supply Chain Management Group Assignment Dr. Vikram Bhakoo Class: Tuesday 6:15-9:15 MGMT90026 Supply Chain Management Group Assignment Dr. Vikram Bhakoo Class: Tuesday 6:15-9:15 By: Widad Alharthi 822694 Di Cao Wasinee Phornnarit Yang Chan By: Widad Alharthi 822694 Di Cao Wasinee Phornnarit Yang Chan Table of Contents Introduction: 2 1. Supply Chain Management Practices 4 1.1 Walmart 4 1.1.1 Strategic allignemnt 4 1.1.2 procurement and distribution 5 1.1.3 Logistic and distribution management 5 1.1.4 Inventory management 6 1.2 Amazon 8 2. Strategic Alliances 9 2.1 Walmart 9 2.2 Amazon 10 3. Technologies employed in the SC Network 11 3.1 Walmart 11 3.2 amazon 13 4. Challenges and risks 14 4.1 Walmart 14 4.2 Amazon 15 5. Comparison of sustainable strategies in Supply Chains 16 conclusion 17 References: 18 Appendices: 19 Section A: 19 Section B: 19 Section C: 20 Introduction: Executive summary: This report provides an analysis and evaluation of the current supply chain strategies employed by two leading retail corporates, Walmart and Amazon. The report draws attention to the following aspects; supply chain management practices, strategic alliances, Information Technology, challenges and risks,finally sustainability in the supply chain. Method of the analysis includes reviewing a collection academic journals from different databases, analysing company’s...

Words: 3354 - Pages: 14

Premium Essay

How Walmart Uses E-Commerce in Its Supply Chain

...How Walmart Uses E-commerce in Its Supply Chain In 2011, Walmart’s sales amounted to $419 billion and were ranked first in Fortune 500’s list of world’s largest companies by revenue. (Walmart 2011). What contributed to Walmart’s success? With heavy investment into their supply chain management system it has enable them to reduce overall costs, minimize inventory levels, and optimize logistics and distribution thus making them more successful. Analysis will be made as to why Walmart is concentrating on supply chain projects, why some suppliers are not in compliance with mandatory RFID tags, and how e-commerce improves transaction processing. Why Walmart is Concentrating on Supply Chain Projects Walmart is investing heavily in projects to constantly improve their supply chain which will allow them to lower overall costs and increases profit margin. An illustration of this is that prior to the efforts on supply chain management in 2002, on sales of $218B, they generated a return of 3%. In 2011, their profit margin increased to 6.1% while doubling revenue. By constantly upgrading the management of product through the various distribution channels and the process in which consumers receive products, time and money can be saved by Walmart which in turn benefits the consumer. In order for Walmart to remain successful on a global level, being competitive is the key. To be competitive in the “front of the house”, they must remain competitive in the “back of the house”. ...

Words: 1850 - Pages: 8

Premium Essay


...ON WALMART'S SUPPLY CHAIN POLICIES Name College ABSTRACT: Walmart is an internationally known corporation with locations throughout the world. From its very humble beginnings, this firm has made significant strides in the creation and maintenance of a healthy and thriving supply chain. Nevertheless, all businesses have areas that present challenges, and Walmart is no different. This report will evaluate six areas of Walmart's supply chain, as well as the potential problems associated with each component. Walmart would not be nearly as successful as it is today without having plans for when parts of its program breakdown, and these are examined here, too. Finally, we discuss the value of a quality and reliable supply chain for overall viability in the market. Information on Walmart's Supply Chain Policies I have chosen to write my essay on the universally known and internationally successful firm, Walmart. Regarding background data, Walmart began in the late 1960s. Amazingly, Walmart grew rapidly throughout the 1970s, expanding to over 275 stores by the end of 1970. The domination continued, with Walmart adding additional features and brands to its already huge corporation, ultimately creating one of the world's most well known retail stories. Although there are many unique points that make up Walmart's retail success, one of the most important includes the capitalization of Walmart's retail chain. Walmart......

Words: 1175 - Pages: 5

Premium Essay

Supply Chain Management

...Walmart: Supply Chain Management Walmart was founded in 1962 by Sam Walton and is considered one of the global giants in supply chain management. The company has become the world’s biggest retailer with the largest amount of sales per square foot, the highest inventory turnover rates, and net operating profit of any of its major competitors. This powerhouse manages approximately $32 billion in inventory and stocks products manufactured in more than 70 countries worldwide. With these kinds of numbers, it is vital that Walmart is able to continue to effectively and efficiently run its supply chain. The organization is dedicated to a business strategy that drives out costs and enables consumers to save money and live well. The way in which Walmart conducts business is distinctly different from its rival, Amazon, who also dominates the North American and global retail environment. Walmart has found continued success by working with fewer links in its supply chain, expanding strategic vendor partnerships, utilizing cross docking to replenish inventory, and embracing technology to track and restock inventory. Additionally, the company has made great strides in developing a highly structured and advanced supply chain by meeting customer demands and achieving cost structures that allows them to provide low everyday pricing on products. As with any company, Walmart has faced many challenges within its supply chain and continues to execute strategies to overcome such challenges.......

Words: 2674 - Pages: 11

Premium Essay

Japan and Walmart

...Walmart in Japan I. Problem identification phase Introduction Walmart is an American international retail company that is headquartered in Bentonville, Arkansas. The company began operations in 1962 after being founded by Sam Walton and incorporated in 1969. The present brand name—Walmart—came about in 2008 and before that it was referred to as Wal-Mart. The company is famous for operating chains of large discount departmental stores and warehouse stores. Presently, the company is the 18th public corporation in terms of size and the biggest in terms of revenue, private employment, and retailer (Walmart 2011 Annual report). Furthermore, the largest shareholders are the Walton’s with 48% shares; hence they control the company. The company has approximately 9000 stores in over 15 countries all operating under different names. For instance, in Mexico it is called Walmex, in UK Asda, and in Japan Seiyu. This article analyses Walmart in Japan through three phases. The three phases are: problem identification, analysis, and solution phases. Background Walmart bought 6.2% of Seiyu in May 2002 (Holstein 73). The shares of the company increased over time and in 2005 December, Walmart was the majority shareholder of 50.9%. In 2008, Seiyu was entirely owned by Walmart whose headquarters are in Tokyo. The company has 419 retail units that are inclusive of: Seiyu Hypermarket, Seiyu Supermarket, Wakana, and Seiyu General Merchendise. Setting operations in Japan was not an easy......

Words: 2606 - Pages: 11