Walmart Supply Chain Case Study

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I. The three decision phases in Supply Chain Management There are three categories of supply chain decision: 1. Supply chain strategy and design Wal-Mart is established by Sam Walton in 1962 and in 50 years, Wal-Mart successfully owned 10,000 retail outlets in 27 countries. Wal-Mart is designed as a discount store that applies everyday low pricing strategy. One of Wal-Mart strategic planning is open up large warehouse-style in low rent suburban area that close to major highways with the target market of blue collar shoppers. This decision also supported by rapid road infrastructure improvement. However the trade-off is none of the supplier willing to do a shipment to the store. Because of that Wal-Mart build their owned transportation…show more content…
Supply chain strategy can be categorized into two characters, which are responsiveness or efficiency. Balancing both characters is an important concern in supply chain design and management. In comparison with K-Mart, Wal-Mart has better ability in responding sudden demand and marketplace changes or uncertainties, which supported by their effective distribution strategy and inventory management. Moreover, Hi-tech information technology, such as VMI and REMIX also offer real time information all supply chain participant. (Johnson 2006). However responsiveness and efficiency could not be obtained at the same time. To gain responsiveness, Wal-Mart inventory is raised and the growth of it faster than sales growth which cause increase in the cost. More inventories means higher holding costs. In K-Mart case, lateness in technology adoption for daily supply chain operation and poor buying decision led them into incapability in facing high uncertainty. The other factor is undeveloped distribution system and information technology, where cause many front shelves empty or contained unsold merchandise. This problem cause higher holding cost and increase unresponsiveness level of
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