Walmart case study

1. Half a Century of Supply
Chain Management at
Walmart
Submitted By – Jay Sharma
A-11

2. Q1: As James Neuhausen, what is your analysis of Wal-Mart’s
supply chain? Are the company’s supply chain capabilities still
a source of competitive advantage? Why or why not?
• Walmart used Global Merchandising centres for effective savings of cost.
• To get the current status of various stores around the stores, effective IT was
used.
• All stores were equipped with real time sales that was visible to company
network.
• Supplier network being integrated to the levels of in-store inventory.
• Wal-Mart have a high bargaining power on its suppliers.
• With the effective help of IT , Walmart was able to perform Just-in-Time supply
of the scarce products in any stores across.

3. Q2: How is Wal-Mart doing? How does it compare to its
competitors?
• Sales hit US$ 109 billion in fiscal year 2011.
• Greatest sales turnover as compared to its current competitors
• Highest level of net profit margin in the industry with better margins as
compared to competitors like Costco, Safeway, Kroger co, amazon.com etc.
• Positive trend in net income has effectively increased in operating expenses
rather than Net profit margins.

4. Q3: As Johnnie Dobbs, Wal-Mart’s executive vice-president
(EVP) of logistics, where would you spend your money or focus
your energy?
• Focus on 3 initiatives – Global Sourcing, Multi-channel strategy & Project one touch.
• Open avenues for Wal-Mart’s interaction with key suppliers in global markets
• Achieving better cost concessions
• “SMALLER” markets could get ignored in the long run while Wal-Mart may be focus on
catering to larger developed markets
• Co-ordination between the off-line and online operations is needed to improve sales
• Motivating the hourly sales force to promote online sales
• Encouraging growth of sales from the online channel through free delivery for online orders
• Bring down costs by approximately $2 billion and improve in-store inventory management
• Lowering labor costs in stores through unpacking merchandise from the warehouse

5. Q4: Where do you see the opportunities for Wal-Mart in
its global supply chain?
Wal-Mart’s low cost strategy and its effective supply chain management has
been a source of competitive edge over years. An integrated supply chain
which is working in collaboration with strategic supplier relationships and
Wal-Mart’s direct participation in inventory management and quality
assurance is a source of sustained competitive advantage for Wal-Mart but
the external environment still presents certain threats. For instance, the
emergence of online retailers has increased competition for Wal-Mart along
with offering a greater level of convenience to customers in contrast to an
in-store shopping experience. Furthermore, niche players like dollar stores
have managed to enter the low cost zone.

6. Thank you !