Taking a Look at Walmarts Supply Chain Management System

1. Nature of the Business Environment Wal-Mart delivers a wide variety of goods at competitive prices to add value and low cost its costs, making it the strongest company in the retail sector. Over the years, Wal-Mart has attracted the attention of many analysts because of its huge international success and its ability to target a wide demographic of shoppers. Wal-Mart is a discount retailor founded by Sam Walton in 1962. This Company has grown to be a retail giant with over 11,000 stores worldwide from Canada, Brazil, Argentina, UK, and China. When Walton initially founded Wal-Mart, his business strategy was to make everyday products available to ordinary consumers at affordable prices. Wal-Mart’s business strategy still remains†¦show more content†¦From the hub, they were sent directly to the store giving them a competitive advantage in reducing cost because Wal-Mart effectively took advantage of economies of scale by ordering large quantities. These items would then be distributed through their own logistic infrastructure to their stores. Reducing cost was always a key organizational goal and in doing so, Wal-Mart eliminated the middleman and dealt directly with manufacturers, an unprecedented move in retail at that time. Wal-Mart also developed a system known as cross-docking, in which they would deliver goods to a consumer directly from the manufacturer, eliminating the need to bring it to a store or hold inventory. Next, they developed one of the greatest computer systems that helped to link supplier and store information systems together. This allowed the supplier direct access to their sales; therefore, they were able to monitor the system to determine when to send inventory as needed, reducing purchase order time. An important part of its logistic system was its transportation system. Human resource managers made sure they hired competent truck drivers that were required to go from the manufacturer to the store or even to the consumer. The trucks were owned by Wal-Mart a nd therefore allowed it free reign over truck usage. As the years progressed, Wal-Mart invested in IT which allowed its stores to monitor their own inventoryShow MoreRelatedCase Study : Supply Chain Management1028 Words   |  5 PagesSUPPLY CHAIN MANAGEMENT IN RETIAL INDUSTRY: CONCEPTS, STRATEGIES AND WALMART CASE STUDY Mian Wang CID: 01090728 Imperial College Business School, MSc Management ABSTRACT With the rapid increase of operation cost and fast development of E-commence in today’s retail industry, traditional operation management models are antiquated. 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