Question

Walmart: Pioneer in Supply Chain Management

Walmart dominates the retailing industry in terms of its sales revenues, its tremendous customer base, and its ability to drive down costs and deliver value to customers. Walmart 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.

Supply chain management refers to a set of approaches and techniques firms use to streamline the flow of merchandise. Firms with a supply chain management focus strive to efficiently and effectively integrate their suppliers, manufacturers, warehouses, stores, and transportation intermediaries into a seamless value chain in which merchandise is produced and distributed in the right quantities, to the right locations, and at the right time. Supply chain management also focuses on minimizing systemwide costs while satisfying the service levels customers require.

Read the case below and answer the questions that follow.

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 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.

Tight inventory management is legendary at Walmart through its just-in-time techniques that allow the firm to boast one of the best supply chains in the world. Walmart has not only transformed its own supply chain, but influenced how vendors throughout the world operate because the company has the economic clout to request changes from its vendor partners and to receive them. Recognized for its ability to obtain merchandise from global sources, Walmart also pioneered the strategy of achieving high levels of growth and profitability through its precision control of manufacturing, inventory, and distribution. Although the company is not unique in this regard, it is by far the most successful and most influential corporation of its kind and has put into practice various innovative techniques.

When Walmart does something, it does it on a massive scale. Walmart’s computer system, for example, is second only to that of the Pentagon in storage capacity. Its information systems analyze more than 10 million daily transactions from point-of-sale data and distribute their analysis in real time both internally to its managers and externally via a satellite network to Walmart’s many suppliers, who use the information for their production planning and order shipment.

Much of the popularity of supply chain management has been attributed to the success of Walmart’s partnership with Procter & Gamble (P&G). During the 1980s, the two collaborated in building one of the first CPFR systems, a software system that linked P&G to Walmart’s distribution centers, taking advantage of advances in the world’s telecommunications infrastructure. When a Walmart store sold a particular P&G item, the information flowed directly to P&G’s planning and control systems. When the inventory level of P&G’s products at Walmart’s distribution center got to the point where it needed to reorder, the system automatically alerted P&G to ship more products. This information helped P&G plan its production. Walmart was also able to track when a P&G shipment arrived at one of its distribution warehouses, which enabled it to coordinate its own outbound shipments to stores. Both Walmart and P&G realized savings from the better inventory management and order processing, savings that in turn were passed on to Walmart’s consumers through its everyday low prices.

A history of success does not mean Walmart executives can rest. Changes in social values, economic fluctuations, technology advances, and other marketplace factors demand that Walmart continue its search for innovative ways to keep consumer prices down.

One of the ways that Walmart has been able to reduce the prices of its products, and add value to its customers, is by its continuing focus on streamlining all its _____ functions.

Multiple Choice

• supply chain management

• RFID

• marketing

• sales

• production management

Walmart probably has the most ____ in its supply chain relationships because of its size, negotiating power, and its commitment to improvement in its supply chain performance.

Multiple Choice

• weakness

• power

• franchises

• justice

• solidarity

By combining their resources and developing shared goals, Procter & Gamble and Walmart were able to increase the value to the final consumer. Their relationship is considered

Multiple Choice

• balanced.

• strategic.

• conflicting.

• combined.

• contentious.

Walmart and Procter & Gamble effectively implemented ________, which allowed for information to flow directly from Walmart's store to Procter & Gamble's production facilities. This streamlined production as well as distribution, thus reducing costs and getting products to Walmart’s customers sooner.

Multiple Choice

• electronic data interchange

• a new franchise

• horizontal channel conflict

• a corporate vertical marketing system

• ticketing and marking

The strategic relationship between Walmart and Procter & Gamble is based on __________ because both firms realize that investments in supply chain management will create savings for consumers.

Multiple Choice

• logistics

• independence

• interdependence

• conflict

• channel management

Answer 1

1. Supply chain management

Walmart has been able to reduce the price of its product and increase the customer service by focusing on supply chain management as it has in flow of goods and services and maximise customer value.

2. Power

Walmart has good negotiation power and its size is also good they have various branches which focuses on the improvement of customer services, they have lots of power in its supply chain relationships.

3. strategic

this is known as strategic relationship when the organisation focuses on increase the final consumer values and provide them good resources and develop their share goals.

4. electronic data interchange

the implement the electronic data exchange which helps the organisation to flow the information directly from Walmart store to their production facilities. It is an effective way to helps the organisation.

5. interdependence

hair the relationship between them is empty pendency as there is independency between the investment in supply chain that will create saving for the consumers

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