Supply Chain Management at Wal-Mart

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SUPPLY CHAIN MANAGEMENT AT WALMART
ABSTRACT
In many large organizations, different functions get different financial responsibilities. Usually product development and marketing are expected to drive top line growth while procurement and operations drive bottom line. However, Wal-Mart is an example of a company in which procurement has played a bigger role in driving innovation and impacting top line. Wal-Mart has perfected the art of managing one of the most complex supply chains by building business model around procurement and supply chain.
When one drops by any Walmart store, he or she is likely to get astounded by thousands of products arranged on shelves. According to Supply Chain Digest, the retail giant stocks products made in more than 70 countries and at a given time, operates more than 11,000 stores in 27 countries around the world, and manages an average of $32 billion in inventory (Lu, 2014). Walmart is known for its low cost business model and to be able to provide lowest cost to customers, Walmart continuously seeks ways of improvement in supply chain. Given the scale of the organization, it is imperative for Walmart to have an effective and efficient supply chain management strategy. In this document it could be found that in order to actually give "Everyday Low Prices to Customers" Wal-Mart implements highly automated supply chain which utilizes technologies like cross docking to reduce operating costs and pass the savings to customers in the form of low-priced products. Walmart also adopts direct sourcing of products from manufacturers in order to get lowest prices from them and further benefit customers by providing low products. The paper will also discuss different supply chain management techniques which have taken Wal-Mart on a path to success. In addition to growing organically, Wal-Mart has acquired several businesses that have helped the giant retailer grow its expertise and build best-in-class eCommerce technologies.
INTRODUCTION
Company Profile
Walmart is the world's largest retailer which operates under the name of Wal-Mart and is traded in the New York Stock Exchange market under the symbol WMT. The products sold by Walmart are varied and include groceries, apparel, household appliances, home furnishing, hardware, health and wellness (including pharmacy), hardlines (stationery, auto spares, and accessories) and entertainment related products. Amongst these grocery remains the largest selling category and accounts for 56% of sales followed by Entertainment at 11% and Health and Wellness at 10%. "According to USDA (U.S. Department of Agriculture), Walmart was the largest seller of grocery items in the US in 2013. It was followed by Kroger (KR), Safeway (SWY), and Publix Super Markets" (Soni, 2015).
Operations of Wal-Mart stores comprise three business segments: Walmart U.S., Walmart International and Sam's Club. The Walmart U.S. segment operates retail stores in all 50 states. Walmart International consists of company's operations in 26 countries outside the United States. Sam's Club consists of warehouse membership clubs and operates in 48 states in the U.S. as well as online operations, samsclub.com.
The company earns trust of customers every day by providing a broad assortment of quality merchandise and services at everyday low prices ("EDLP"), while fostering a culture that rewards and embraces mutual respect, integrity and diversity (Form 10-K, 2014).
Employees
At the end of fiscal year 2014, the company employed 2.2 million employees, called "associates" worldwide. Of these, 1.4 million are employed in the US while 0.8 million are employed internationally. There are different programs designed to facilitate exchange and transfer of diverse knowledge, experience and perspectives among associates, build and foster a sense of community, and drive diversity in the business, increase mentoring of associates.
Competition
The Walmart US segment faces competition from variety of local, national and global chains in the supermarket, discount, grocery, department, dollar, drug, variety, specialty stores, supercenter-type stores, hypermarkets, internet-based retailers, and catalog businesses (Form 10-K, 2014). Some of the major competitors in the US are Target Corporation, Costco Wholesale Corp., Dollar Tree Stores Inc.
SUPPLY CHAIN STRATEGY
Supply chain of Walmart is regarded as one of the most technologically advanced and efficient. Walmart is pioneer in getting detailed product information which can be sent to the database and lead to better inventory management. Walmart also adopted another strategy of transferring the responsibility of managing inventory in its warehouses from Walmart to suppliers. It gives suppliers more clarity on replenishment time and quantity and there is a smoother flow of inventory. It has helped Walmart in ensuring that products would be available whenever customer looks for them on shelves ...