Wal Mart Supply Chain Management analysis

Wal-Mart, a transnational retail corporation is considered to be one of the fastest turning corporations in the supply concatenation and retail direction. Its presence in America and Latin America is immense. The ere have been legion surveies refering Wal-Mart and its operation, the schemes and all facets of its directions, given the fact that Wal-Mart as a corporation is considered to be a leader in the retail section of the industry in America and worldwide.

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In order to run into the planetary demands of their presence, Wal-Mart requires conveying into force effectual supply concatenation direction and its thought is the call of the hr. We assume that Wal-Mart schemes are resilient plenty in that respect. This study besides presents some important determination of Wal-Mart supply concatenation direction schemes, which is a innovator for the industry.

Table of Contentss

Introduction

Supply concatenation direction is a complex procedure affecting the elaboratenesss of top of the terminal direction patterns. As we are cognizant with the world, the universe today in the background of globalisation and its impact is interlinked. Sing concern fabrication or retails units every bit good, it is rather obvious that corporation demands effectual coordination and cooperation with providers as a agency to guarantee that merchandises and services reaches the market without any hiccoughs, which further enable such corporation to function their client better.

It is prudent to choose a company with an international presence to analyse the constituents of supply concatenation thought and its direction facets. For that ground, the company selected for the intent of this survey is Wal-Mart, a market leader in the planetary retail industry. The nonsubjective behind this study is to place the tendencies and schemes adopted by Wal-Mart in the background of globalisation and its impact, plus the consequence of competitions on their stock list direction patterns every bit good as the technological displacement that the company have integrated for streamlined procedures in their supply concatenation direction processes overall, which is discussed below.

Tendencies AND CHARACTERISTICS IN RETAIL INDUSTRY

In the retail industry, the most of import tendencies and its features are defined by their dependance on consumer disbursement wonts. This is what we by and large seen happens in most instances, whether during the good times or likewise. Retails industry serves it client through their retail shops, such as food market stores and departmental shops, which is the commonest illustration we can come with refering the features in retail industry.

CHARACTERISTICS IN RETAIL INDUSTRY

Global retail industry and “ its scope is considered to be rather immense in nature of their being, ” ( RetailDirectory ) which is true and factual. In term of the industry trends in the current strategies of things, retail industry in considered to be amongst the frontrunner for the top topographic point in the planetary ranking. That is to state, retail industry is speculated to be the 2nd largest industry on a planetary graduated table ” ( RetailDirectory ) in term of gross coevalss and gross revenues embracing their concerns and its features.

Tendencies IN CURRENT RETAIL INDUSTRY Spending

The tendencies that is fast catching up today in the retail industry are in the signifiers of “ e-commerce, for gross revenues shops or discounted shops to be precise, rise of the mall civilization and departmental shops, which are a few to call here. ” ( RetailDirectory )

The tendencies are altering all about. In US and UK, retail is a immense industry per comparing. However, after “ the recession in the early portion of 2009, there has been a crisp diminution in retail, ” ( Ystats ) although large retail merchant in the industry still have their major portion of the market.

GLOBAL RETAIL CHAINS MARKET SHARES

Above mentioned treatment gives a glance of the tendencies and features in planetary retail industry. Four major retail companies are Wal-Mart, Home Depot, Kroger and Tesco.

The Following is the Tabular Datas: –

Table 1.1

Gross saless Figures. ( Net Gross saless )

2000 ( in Million Dollars )

2001 ( in Million Dollars )

2002 ( in Million Dollars )

Wal-Mart

US $ 165,013

US $ 191,329

US $ 217,799

Home Depot

US $ 45,738

US $ 53,553

US $ 58,247

Kroger

US $ 45,352

US $ 49,000

US $ 51,760

Tesco

US $ 28,438

US $ 31,810

US $ 35,835

Beginnings: – 2002 Annual Gross saless Report, ( Wal-Mart, Home Depot, Kroger, Tesco )

WAL-MART KEY SUPPLY CHAIN STRATEGY

Wal-Mart is a planetary leader in the retail industry, based in US. The company since its initiation yearss has come far and broad to command a topographic point for itself in the industry today. What has been the important alteration of tide in favour of Wal-Mart can be emphasized to its supply ironss scheme. Wal-Mart today is “ considered to be a market leader in term of employment in the private sector. It ‘s been asserted by industry expert that Wal-Mart achieved the position of leader in the retail industry because of its effectual supply concatenation direction scheme. ” ( P Mohan Chandran )

Wal-Mart supply concatenation scheme is really successfully because it adapts to alter and demand of the market. “ The company committedness to better operations, take downing the cost factor and edifice relationship with client in the best possible manner is dome of the strategic mentality that is reliant to the company rule and its visions. ” ( Anonymous )

The supply concatenation direction adopted by Wal-Mart are strategically effectual, which reflect the points that “ abundant concentration is given toward ‘procurement and distribution ‘ of its merchandises, services and everything in the retail cleavages that are aligned to one individual units. With over 40 distribution Centre, Wal-Mart presence across the Earth in context of its procurance and distribution is immense and influential factor. ( P Mohan Chandran ) Besides, the company besides is really specific to run into the strategic preparation in the best possible ways, wherein its operations in the logistic section, its distribution every bit good as transit and integrating of engineering follows the best industrial patterns. ( Anonymous ) These four constituents are what define the cardinal strategic key of Wal-Mart.

Specific inside informations to Wal-Mart logistic direction can be emphasized to the constituents “ embracing fast, dependable and antiphonal transit installations. Most significantly distribution Centre of Wal-Mart besides are serviced by company owned conveyance vehicle and trucks to ease a fast, dependable and effectual logistics from one Centre to another. ” ( P Mohan Chandran ) This is one of the biggest strategic strength that Wal-Mart self-praises of every bit far as logistic cleavage goes in its concern operational expertness.

Therefore, when we look to these characteristics as inside informations, we feel that Wal-Mart cardinal supply concatenation scheme and its acceptance is the strength accumulated in four cleavage of its concern, viz. logistic direction, procurance and distribution, stock list direction and most significantly technological integratings. These four factor in the supply concatenation direction scheme of Wal-Mart in the retail industry are the streamliner of its concern operation and considered to be a strategic tools adopted by Wal-Mart, which have helped improved its concern operation to a great extent.

Industry Comparison: Supply CHAIN STRATEGY

As we have defined above, Wal-Mart supply concatenation scheme and its strength are composed into four factor, they are the integrating of engineering, procurance and distribution, stock list direction and effectual logistics constituents. In that regard, the other factor that comprised the strength of Wal-Mart in supply concatenation direction besides is their accent and greater force that is “ concentrated in constructing a lasting and furthering relationship with clients, its employees, and providers, ” ( P Mohan Chandran ) who the company overall comprised the stakeholder in the company in make up one’s minding its destiny in the market.

Sing these facts, the major difference in Wal-Mart supply concatenation direction to that of other corporations in the retail industry in US and elsewhere are the factor of “ its cross docking operational expertness adopted by the company in run intoing its supply concatenation direction processes. ” ( P Mohan Chandran ) As the instance is, Wal-Mart “ in recent clip since 2000 have invested to a great extent in cross moorage, which is its alone factor that besides defines its stock list mechanism, frequently regard by analysts as a major factor. The chief factors that have helped Wal-Mart through its alone cross docking stock list mechanism are its benefits derived in context of economic of graduated table and cost of gross revenues that are reduced dramatically through such procedures. ” ( Echeat.com )

Besides, Wal-Mart and its direction besides spent a “ important sum of clip in run intoing their sellers, providers, distributers as a factor to understand what goes into the cost in selling and procurance, etc which is an illustration of an effectual dialogue procedure that goes into the devising of it. ” ( P Mohan Chandran )

Industry COMPARISON

As we have detailed in Table 1.1, there is a clear indicant that get downing from the twelvemonth 2000 to the terminal of the financial twelvemonth 2002 Wal-Mart was a market leader. In the current phase every bit good, Wal-Mart grosser is immense. Their direction of the supply concatenation is genuinely an industry illustration of the effectual mechanism taking forms, and easing the procedure through the integrating of engineering, human apprehension, edifice relationship and most significantly go toing to the demands and wants of consumer, which is one success factor in basic economic sense and is understanding.

Impact OF GLOBALIZATION ON WAL-MART SUPPLY CHAIN STRATEGIES

Globalization has had both the negative and positive impact on Wal-Mart supply concatenation scheme and its direction. However, on a greater note, we feel that Wal-Mart supply concatenation scheme have benefitted greatly from globalisation. One illustration of it can be said in context of the company retail ironss and its presence across national boundaries, be it in Mexico, Latin America and major portion of US and Canada. Add to it, “ with around 7000 stored across the Earth, and 120 major distribution units globally, with an operation that span across 15 national economic systems, ( Anonymous ) is one good illustration to ground the factor attached to Wal-Mart and the impact globalisation have on it.

Some case of globalisation and impact on Wal-Mart supply ironss direction can be seen in context of ‘improved stock list procedure, engineering, distribution channels and cross moorage every bit good as gross revenues tracking systems that are rapid in procedure preparation and information transportations. ” ( Anonymous )

WAL-MART INVENTORY MANAGEMENT PRACTICES

In the stock list section as we have detailed, Wal-Mart adopt a streamlined step in that respect, so as to maintain a low degree of stock list. In that regard “ the investing made by the company in context its cross moorage mechanism and its stock list. In another word, Wal-Mart cross docking stock list “ and its integrating have enabled the company the easiness and convenience of complexnesss involved in the procedure of stock list direction. ” ( Echeat.com )

Besides Wal-Mart “ acceptance of the fast transit installations that are serviced and backup by the company owned truck and supply vehicles that defines the effectual transit installations overall saves a enormous sum of clip, which is frequently loss in dealing or transportation, which besides reduces the cost in that respect. ” ( P Mohan Chandran ) This is the benchmark of Wal-Mart stock list patterns and a theoretical account for emulation in the planetary retail industry.

TECHNOLOGICAL TRENDS AND ITS INFLUENCE IN WAL-MART

Technology as in any other industry has it influence. The same is with Wal-Mart and their integrating of engineering in furthering an effectual operational procedure in is supply concatenation direction. It is “ speculated that Wal-Mart has one of the largest Information technology system within its corporation construction, where technological integrating and its influence is enormously immense ” ( Anonymous ) and play a important portion in Wal-Mart supply concatenation.

The chief engineerings adopted by Wal-Mart in its supply concatenation direction are viz. the followers: –

Universal Bar Code: This is the first of its sort “ engineering introduced by Wal-Mart in the retail industry. The primary aim of this cosmopolitan saloon codification adopted by Wal-Mart is to convey about a alteration in retail industry saloon cryptography system for common labeling. This is slightly a great engineering adopted by Wal-Mart that enhanced its concern procedure, given that it generates all sorts of information required which is specific. ” ( Wilbert )

Radio Frequency Identification Technology ( RFIT ) : This engineering used by Wal-Mart “ integrates the promotion of wireless frequence to go through on informations and any relevant stored informations within the company intranet and extranet system. ” ( Wilbert )

Charming Wand: This is a manus held device used by Wal-Mart in its stored around the universe. This manus held device are chiefly executed by the aid of computing machines and do usage of the point of sale ( POS ) system and its integrating, which help tracking gross revenues of merchandise and tracking the ware in shops accurately. ( P Mohan Chandran )

Sing these three technological promotion, we feel that Wal-Mart integrating of engineering in its supply concatenation direction is immense and influential.

Decision: Company PERFORMANCE

Supply concatenation has ever been in the procedure of being. But in the current scenario, supply concatenation thought and its direction characteristics have undergone enormous alteration and transmutation, given the rise of transnational companies ( MNC ) .

Wal-Mart instance is besides no different. Wal-Mart supply concatenation procedure in the current scenario is aimed at heightening operational expertness. This has been a world, and the gross revenues figures that have increased since 2000 till the current old ages shows the alteration in company standing. Besides being the universe 2nd largest retail merchant in term of gross revenues says a batch about Wal-Mart public presentation in term of gross revenues, scheme, and success factor and trade name image.

Surprisingly, retail and its market cap in Asia have risen dramatically in recent times. Research carried out by planetary research company, Ystats.com came to the cardinal findings that “ retail disbursement in major market where retail bid a topographic point on the planetary graduated table have declined, that is in UK and US market. The tendencies therefore have shifted to Asiatic market, such as China, India and Japan in the current clip. ” ( Ystats )

Recommendation

It is recommended that in the current clip Wal-Mart should take more attack towards: –

Enhancing their associates and edifice relationship, so that it helps the company to farther expand.

Given the tendency in Asiatic retail growing in the current, it ‘s a good thought for Wal-Mart to spread out their retail concatenation in Asians market, be it in India, and China.

Improvement of their procedure ever calls needfully.

Continuous betterments and larning ‘s.

Stressing on diverseness plans.

Employee ‘s committednesss and their concentration on employees with particular demands.