Half a Century of Supply Chain Management at

WalmartSubmitted By – Jay Sharma

A-11

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.

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.

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

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.

Thank you !