Positioning Statement
The paper will be presenting the management with a set of probable solution that can be used to make the supply chain more efficient and a comprehensive source of competitive advantage for the company. Wal-Mart is the largest retail network globally and the supply chain efficiency is a key in achieving sustainable success. Therefore, the company is seeking to address the issue of making the supply chain more efficient and sustaining it as a competitive advantage. In this regard the paper will present the problem along with the root causes and will analyze the situation more appropriately. Furthermore, the possible alternatives will be suggested and a solution is recommended to facilitate the management in the decision-making.
Problem Statement
Wal-Mart the global retail company is aiming to make the supply chain further efficient and is looking to improve on this aspect. The company is currently the second largest company as far as the sales is concerned globally and possesses a highly efficient supply chain. The supply chain has played an integral role in the overall success of the company and a firm integration between the retail and supply chain is created.
For the past 40 years the company has developed its supply chain quite efficiently and has been a strong component of the company’s growth. For decades supply chain has remained a strong competitive advantage for the company but the competitors are investing strong efforts in order to imitate the supply chain efforts and practices of the company, leaving very little for the company to differentiate.
Johnnie Dobbs, the executive vice president for the company is hired recently and assigned the task to improve on this regard. Therefore, Dobbs is viewing the possible options but have to consider the implementation after viewing the cost factor and the feasibility of the solution as well for the company.
Analysis
This section will analyze the situation more appropriately and will address some key areas that are important to cater while analyzing the situation. It is important to identify the root causes of the issues and the reasons to build the supply chain more efficient. This section will assess the supply chain activities of the company which are the core components of the Wal-Mart’s supply chain.
Secondly, supply chain as the source of competitive advantage will be analyzed and the information technology assimilation by the company will be assessed. Thus this section will be assessing and analyzing different initiatives of the company which will help in identifying the areas that can be leveraged by the company while selecting on the strategy for future and the areas that should be improved.
Supply Chain Components of Wal-Mart
The company has always utilized supply chain quite efficiently and the supply chain philosophy is associated with the core philosophy of the company’s founder Sam Walton. The company is aware of the fact that in order to gain control and achieve the target of everyday low pricing and making customer satisfied supply chain efficiency is essential.
It is important to analyze the distribution that has given the company a major edge and has allowed the firm to deliver on its promise of providing everyday low pricing. However, besidesdistribution the overall supply chain efficiency has been supported by the major components like the logistics, purchasing, and CPFR and the bullwhip effect.
Logistics
Logistics has always been a key component of the company’s supply chain that has helped in integrating information, packaging, transportation and other decisions related to inventory. The company has always emphasized ion building an efficient logistic channel as the company’s aim was to deliver discount pricing but the lack of transportation has been a major challenge.
The company in order to respond to these issues created a distribution center that would help in storing the fleet of trucks of the company. This decision reduced per unit cost and allowed the company to gain efficient distribution along with cost effectiveness. However, the logistics system of the company is not just efficient but also quiet strong and has some major reasons that have contributed in the overall strength of the logistic system.
The first and the most important factor is the cross docking that allowed the company to keep the inventory moving. This is an innovative system that has allowed the company to transfer the products from the distribution center to the stores through compete packaging without putting burden on the inventory system. Besides that the company has also made strong ties with the suppliers in order to make the packages or the cases standardized and follow proper labeling that made the identification and shipment easier.....................
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