Wal Mart Supply Chain
ARTICLE REVIEW ON SUCCESS STORIES OF IMPLEMENTING SUCCESSFUL SUPPLY CHAIN PRATICES IN ORGANIZATIONS (Individual Assignment) – Wal-Mart Founded by Sam Walton in 1962, Wal-Mart was ranked second in the global Fortune 500 list in 2009 (Refer Table 1). It was the largest retailing company in the world, which specializes in satisfying consumers’ durable goods product needs and offering consumers a choice multiple merchandise lines, at variable price points, in all product categories.
TABLE 1
GLOBAL FORTUNE 500 LISTS (2009) Rank | Company | Revenues (in millions) | 1 | Exxon Mobil | 442,851.0 | 2 | Wal-Mart Stores | 405,607.0 | 3 | Chevron | 263,159.0 | 4 | ConocoPhillips | 230,764.0 | 5 | General Electric | 183,207.0 |
Source: www.fortune.com
Wal-Mart was able to achieve a leadership status in the retail industry because of its efficient supply chain management practices. 3 areas where Wal-Mart manages the supply chain: Procurement & Distribution Wal-Mart procured goods directly from manufacturers, bypassing all intermediaries. It was a tough price negotiator which will only purchased when it was fully assure that the products bought were not available elsewhere at a lower price. Wal-Mart also spent time meeting vendors and understanding their cost structure. By making the process transparent, it would know which manufacturers were doing their best to cut down costs and then it will establish long term relationship with that vendor. Besides, Wal-Mart had over 40 distribution centers at various locations in the US to ensure steady and consistent flow of products to support the supply function. To manage center easier and more economical, it used sophisticated barcode technology and hand-held computer systems to enable the packaging department to get accurate information about the products to be packed so as to save time on unnecessary paperwork. It also allowed the center supervisors to monitor their employees closely which
TABLE 1
GLOBAL FORTUNE 500 LISTS (2009) Rank | Company | Revenues (in millions) | 1 | Exxon Mobil | 442,851.0 | 2 | Wal-Mart Stores | 405,607.0 | 3 | Chevron | 263,159.0 | 4 | ConocoPhillips | 230,764.0 | 5 | General Electric | 183,207.0 |
Source: www.fortune.com
Wal-Mart was able to achieve a leadership status in the retail industry because of its efficient supply chain management practices. 3 areas where Wal-Mart manages the supply chain: Procurement & Distribution Wal-Mart procured goods directly from manufacturers, bypassing all intermediaries. It was a tough price negotiator which will only purchased when it was fully assure that the products bought were not available elsewhere at a lower price. Wal-Mart also spent time meeting vendors and understanding their cost structure. By making the process transparent, it would know which manufacturers were doing their best to cut down costs and then it will establish long term relationship with that vendor. Besides, Wal-Mart had over 40 distribution centers at various locations in the US to ensure steady and consistent flow of products to support the supply function. To manage center easier and more economical, it used sophisticated barcode technology and hand-held computer systems to enable the packaging department to get accurate information about the products to be packed so as to save time on unnecessary paperwork. It also allowed the center supervisors to monitor their employees closely which
Bibliography: 1. ICFAI Center for Management Research (ICMR), Wal-Mart’s Supply Chain Management Practices, P. Mohan Chandran, 2003 http://mohanchandran.files.wordpress.com/2008/01/wal-mart.pdf 2. Wal-Mart, the Wikipedia http://en.wikipedia.org/wiki/Wal-Mart 3. FORTUNE 500 2009 http://money.cnn.com/magazines/fortune/fortune500/2009/ 4. Wal-Mart’s Supply Chain – A Business Success www.gyte.edu.tr/dersler/546/.../2-Wal-Mart%20Supply%20Chain.ppt 5. Supply Chain Management Case Studies: Why Wal-Mart’s supply chain is so success http://supply-chain-case-studies.blogspot.com/2008/06/walmart-scm-strategy-analysis.html