Business / Wal-Mart's Supply Chain

Wal-Mart's Supply Chain

Autor:  Zomby  12 February 2012
Tags: 
Words: 1527   |   Pages: 7
Views: 1016

Wal-Mart’s supply chain

Being the global leader of retail industry, the only retailer on the top of Fortune 500’s list, and largest corporation in the world does not come easily but rather with persistence to perfect and serve the customer’s needs (Walmart 2011). Wal-Mart considers itself a leading force in sustainability projects to protect the environment and the growing populations throughout the world. They also have pushed their power to the extent of causing other businesses to follow in their footsteps less it fail. One of the many systems Wal-Mart implements is a strong supply chain. The components of the supply chain are not independent of each other rather intermingle to perfect success from the point of production to the end user. Six components of Wal-Mart’s supply chain will be discussed.

Component 1: Production

Wal-Mart makes strategic decisions regularly regarding production, how it affects the customers’ needs, the impact on the demand of the market, the quality of the product, as well as the volume of goods (Wal-Mart, 2011). Problems such as the quality of raw materials, new technology, and change in customers’ preferences may certainly occur. Wal-Mart surveys its customers regularly via the internet as well as acting on their comments and complaints in store. There are marketing and merchandising departments that work only on finding the best products at the lowest price.

Component 2: Supply

One of the major components of Wal-Mart’s supply chain is the outsourcing process. It is not feasible for Wal-Mart to manufacture the vast amount of product it sells so they need to rely on other companies to do the manufacturing; outsourcing. In this part of the supply chain the focus is on the quality of product, the flexibility of pricing, and the velocity of supplies. With suppliers not always located in close proximity, the rate of delivering quality product that is fresh and undamaged requires a networked communication system (Ross, 2007). The price Wal-Mart pays for supplies is crucial to the price passed on to the customer, which is what they are known best for. To maintain ‘everyday low prices’ Wal-Mart works with other corporations like Kimberly Clark, Proctor and Gamble, General Mills, and Frito-Lay, to name a few, guaranteeing their product in the store for the exchange of lower prices than are offered to others.

Component 3: Inventory

Managing inventory flow and quantity is a key element of the supply chain to reduce the costs ...