WALMART The case solution
The collaboration between Walmart and its suppliers is important for supply chain efficiency. Walmarts purchase its major suppliers based on company size and product sales because Walmart requires suppliers' collaboration to deliver products on customers' demand at low cost. However, as we know that Walmart's slogan is everyday low price, it is clear that their profit margin is low, so it is difficult to maintain the balance between different suppliers (Nguyen Thi Thu Ha, 2017). Due to this low-profit margin between different parties, it impacts the performance of supply chain efficiency,
Alternatives
- Estimate consumer demand
- Maintain good relationship with suppliers and monitor the suppliers regularly
- Walmart should follow the industry trends to solve the restocking issues.
- Walmart should start employee retention program to improve employee retention rate.
Criteria
The criteria to make decision is very easy in this situation because if the strategy help company to resolve the issues in supply chain and the satisfaction level of employees. Because these are two main issues that need solution. Employee satisfaction level and supply chain effectiveness can show implicit effect on the business. In many cases, it's no coincidence that all types of suppliers state that Wal-Mart is particularly beneficial in doing business. Wal-Mart's rulebook for suppliers is said to be 46 pages. Wal-Mart has a supplier scorecard with 100 questions, and sustainability is also in the scorecard category. Wal-Mart, unlike other retailers, tells the supplier exactly what is expected and monitors the supplier's progress. Wal-Mart supports the suppliers to the best possible. Each supplier can see weekly sales and the number of items that Wal-Mart uses to assess the profitability. Buyers, on the other hand, can observe supplier trends by comparing similar suppliers. Wal-Mart offers a 3-hour webinar training course every few weeks, where suppliers learn about scorecard features, how numbers are interpreted, and the key factors that influence results.
The strategic Profit Model is used for supplier performance analysis. The following figure shows the components of the strategic profit model (return on total assets = rate of return x rate of return). This allows companies of different sizes to be compared with different strategies to better assess performance (Bettis, 1981). The elements of return on investment are net profit margin and asset turnover. This allows you to investigate the profit per dollar of the company's sales and the efficiency with which it can use its assets to grow the sales. Break down the net profit margin and asset turnover into finer ratios such as gross profit margin and inventory turnover to examine a company's pricing power and efficiency in inventory management. As Evans (2005) states, the various components of the strategic profit model provide information regarding the corporate strategy.
Analysis
The supply chain conflicts should be positive or negative both depending upon the situation. Supply chain conflicts arise due to the following reasons: uncoordinated business processes, goals, and objectives within your organization, which ultimately leads towards profit generation. Conflicts in supply chain management are not uncommon. Constant resolution strategies resolve the conflicts and turn them into facilities for increasing productivity, reducing the costs, increasing customer satisfaction and building better teams.Maintaining good relationship with suppliers will help to maintain the stock in warehouse according to the consumer demand. This will resolve the restocking issues for the company.........................
This is just a sample partial case solution. Please place the order on the website to order your own originally done case solution.
