RUNNING HEAD: Walmart's Supply Chain

INFORMATION ON WALMART'S SUPPLY CHAIN POLICIES Name College

RUNNING HEAD: Walmart's Supply Chain

ABSTRACT: Walmart is an internationally known corporation with locations throughout the world. From its very humble beginnings, this firm has made significant strides in the creation and maintenance of a healthy and thriving supply chain. Nevertheless, all businesses have areas that present challenges, and Walmart is no different. This report will evaluate six areas of Walmart's supply chain, as well as the potential problems associated with each component. Walmart would not be nearly as successful as it is today without having plans for when parts of its program breakdown, and these are examined here, too. Finally, we discuss the value of a quality and reliable supply chain for overall viability in the market.

RUNNING HEAD: Walmart's Supply Chain

Information on Walmart's Supply Chain Policies

I have chosen to write my essay on the universally known and internationally successful firm, Walmart. Regarding background data, Walmart began in the late 1960s. Amazingly, Walmart grew rapidly throughout the 1970s, expanding to over 275 stores by the end of 1970. The domination continued, with Walmart adding additional features and brands to its already huge corporation, ultimately creating one of the world's most well known retail stories. Although there are many unique points that make up Walmart's retail success, one of the most important includes the capitalization of Walmart's retail chain. Walmart consistently emphasized the need to reduce its purchasing costs and offer the best price to its customers. The company procured goods directly from manufacturers, bypassing all intermediaries. Walmart has been a tough negotiator on prices and finalized a purchase deal only when it was fully confident that the products being bought were not available elsewhere at a lower price (Chandran, 2003). Interestingly, this remains the cornerstone of Walmart's purchasing philosophy. A supply chain is comprised of all the businesses and individual contributors involved in creating a product, from raw materials to

RUNNING HEAD: Walmart's Supply Chain finished merchandise, and certainly, Walmart is not different in this respect. For example, supply chain activities include farming, refining, design, manufacturing, packaging and transportation. What Walmart does do differently is to tightly control supply chain management to better influence product quality, inventory levels, timing, and expenses. Now, as we know, Walmart is a multinational company, and so has dealings with various other countries as well as our own. In a global economy, supply chain management often includes dealings with companies and individual contributors in other countries, which requires involvement in politics, trade and tariff laws, quality control, and international relationships (Farfan, 2012). Because global supply chains are both organizationally and technologically complicated, there are now global supply chain

management specialists and firms who oversee the process for several global corporations. To clarify, one example of how U.S. retail industry companies are involved with supply chain management was demonstrated by Walmart when it announced impressive plans for developing a sustainability system for the products sold in its stores, and environmental accountability from all parties involved in its supply chain. Nevertheless, we have been charged with looking at six specific components of Walmart's supply chain and evaluate some potential

RUNNING HEAD: Walmart's Supply Chain complications or problems with each element. If we begin with the sustainability system described above, we can see that one possible issue may occur if any of Walmart's suppliers fail to document their sustainability practices, or worse yet, abandon this concept all

together. Walmart has chosen to mitigate this possibility by leveraging its extensive retail power to help ensure that all of its suppliers maintain sustainable practices. Furthermore, Walmart spent a great deal of time meeting with its vendors to confirm that all of its standards were being met. A second large factor within Walmart's supply chain is its distribution centers. It is estimated that Walmart can restock depleted items to its stores within 2 days, significantly faster than its competitors. In order to keep up this ambitious schedule, Walmart needed to rely on the efficiency of its warehouse workers or the process would be a disaster, Walmart chose to meet this need by updating its distribution process so that the experience worked seamlessly (Chandran, 2003). A third issue for Walmart is its transportation system. This network of trucks and drivers is the lifeblood of this retail organization. Part of the puzzle to successful movement of goods was to employ reliable and safe drivers for its fleet. If its staff was accident-prone or frequently became lost, again the process would break down. Walmart managed to answer this need by hiring only experienced drivers who

RUNNING HEAD: Walmart's Supply Chain

had each logged more than 300,000 accident free miles, with no major traffic violations (Chandran, 2003). Walmart also relies heavily on its IT and computer infrastructure to keep all parts of its engine running smoothly. However, any downtime within its computer networks would be disastrous. This possibility is minimized by a carefully crafted and maintained computer system, with significant coordination at multiple levels within its company. Walmart also seeks to reduce unproductive inventory by allowing stores to manage their own stocks, reducing pack sizes across many product categories, and timely price markdowns (or rollbacks). Walmart has one of the most advanced and technologically savvy computer systems in the retail landscape today. Employees are able to communicate one with the other from inside the store, and to other key members of the organization from handheld devices. This system has created a boon for the delivery of information in a reasonable manner throughout the store. While some of this technology may go down from time to time, Walmart manages to maintain its high level of communication through regular maintenance and repeat checks of devices. One last vital area of Walmart's supply chain is ease of communication among stores throughout a region. For a company as massive as Walmart, simply getting on the telephone was not

RUNNING HEAD: Walmart's Supply Chain responsive enough, so Walmart initiated its own satellite communication system in 1983. This network allows stores to speak directly to one another across town and across the globe, so the staff

members may solve problems that may arise in an amazingly efficient manner. Considering the scope of Walmart's business practices as well as the sheer number and volume of its products, it is clear that quality management and measurement are vital to overall success in the industry. Furthermore, to stay competitive in the global context, Walmart needs to constantly monitor all parts of its supply chain to ensure all the parts of the firm are running as effectively as possible. With Walmart being a multinational organization. it already takes advantage of an enterprise resource planning system to help streamline operations and achieve efficient operations throughout and across the world. In fact, it is hard to imagine Walmart being able to maintain its current status atop the business ladder without these advances already in place.

References

RUNNING HEAD: Walmart's Supply Chain Chandran, P. (2003) Supply Chain Management the Walmart Way. Supply Chain and Logistics Journal. www.infochain.org. Last accessed May 28, 2012. Farfan, B. (2012) What is Supply Chain Management and What Are Examples In the Retail Industry?

http://retailindustry.about.com/od/storeoperations/f/supply_chain_man agement_retail_frequently_asked_questions_answers.htm. Last accessed May 28, 2012.