POST GRADUATE PROGRAM IN E-COMMERECE AND SUPPLY

CHAIN MANAGEMNT

SUPPLY CHAIN PROCESS MANAGEMENT ASSIGNMENT 1

--BY ANANDHA KEERTHANAN S

 1. Consider purchase of a can of soda at a retailer store.
Describe the various stages in the supply chain and the
different flows involved.
Solution:
A supply chain is an entire system of producing and delivering a
product or service, from the very beginning stage of source the
raw materials to the final delivery of customers the product or
service to end users.

Different stages involved:

Supplier Manufacturer Distributor Retailer

Consumer
Flow:

Financial flow, Material flow, Information flow.

As per given case study:

The customer intends to purchase a can of soda at a retailer

store, his or her purchase describes the end of a supply chain’s delivery
of an item and the beginning of information regarding his/her
purchase regarding their purchase flowing in the opposite direction.

When a customer order or purchase a product (can of soda) the

retailer moves the product towards the customer (material flow) and
money and information towards the retailer (information and
financial flow).

The retailer places an order from the distributor to refill stock, thereby
moving information upwards the supply chain while moving the

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product downwards the supply chain. Once the order is filled, the
retailers will move money upward the supply chain.

After that, the distributor transmits information and money to the

manufacturer who produces the product and ship it downwards the
supply chain to the wholesaler. Finally, the manufacturers moves the
orders (information) and money towards suppliers in exchange for
material flow into their production processes.

2. Answer following questions based on video:

a. What were the reasons behind poor performance of Dell’s

supply chain?
 Lack of new and innovative products.
 Customer service is poor.
 Increasing supports costs.
 Lack of retail presence.
 Limitations of direct model.

b. What was dell’s direct model and how it works?

The most remarkable feature of Dell’s supply chain
management is its direct sales model, meaning that it accepts
order directly from the customers, without any resellers
involved.
 Customer places orders on Dell’s website. In this order
customer specifies their requirements, like the
computer configuration and specifications.
 The customer requirements are forwarded to the
manufacturing department.
 The assembly of the PC begins.
 The computer or laptop is ready and shipped to the
customers.

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c. What is segmented supply chain model and how dell
implements it?
The segmented supply chain model that targeted several
groups of customers with different need and buying capacity.
The core of the brand’s success in its earlier was its
relationships with customers and ability to hear their needs ,
and the reinvention of Dell’s supply chain was focused mostly
on customers relationships.

The following solutions are:

 Global structure instead of regional structure, with three
business units- enterprise, public, and consumer/small
business.
 Standardized offers including the most frequently
purchased configurations.
 Segmented model instead of a one-size-fits-all model.
 Infrastructure that corresponds to the changing needs of
the business.
 Standard yet flexible process that leverage global
partnerships.
 Customers priorities aligned according to the speed,
choice and cost.
 VendoeReady-made in-stock system for quick delivery.
 Optimization of global structure.

d. What are the key objectives of Dell’s inventory

management strategy?
The key objective of dell’s inventory management strategy is to
minimize the inventory and optimize the production speed. As
result the company does not hold inventory for more than 6
days and avoid unnecessary carrying cost.

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 e. What steps dell made for supplier collaboration?
Vendor managed inventory is a step made by dell for supplier
in collaboration. It means the supplied components are kept on
truck only and taken as needed while the vendor manages the
inventory. Dell and its supplier communicates with each
other via an internal website called value chain. At this,
website the companies can access information about
inventory status within supply chain as well as get
demand and production data.

3. Do some online research and prepare report on walMart’s

supply chain strategy?

WalMart is a multinational retail corporation operating a chain of

grocery stores, hypermarkets, and discount department stores. This
major retail player with American origins has built a major and
successful brand but not without its challenges.

WalMart’s supply chain strategy:

According to 2020-2021 survey holding 32$ billion in inventory,
Walmart supply chain is often touted as one of the most effective
in the world. Practices that Walmart pioneered have been widely
Adopted by its competitors and other companies serving entirely
different markets.
Walmart introduced concepts that are now industry standards.
Many of these concepts come directly from the way the company
builds and operates its supply chain.

Most Intelligent concepts of wall mart:

Expanding around Distribution centers is central to the way
Walmart enters the new geographical market. The company looks
for areas that support a group of new stores, not just a single new
store. It then builds a new distribution center at a central location

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 in the area and open its store simultaneously. The distribution
center is the supply chain bridgehead into the new territory.
Its supports the opening of new more stores in the area at a very
low additional cost. These savings are passed along to the
customers.

Electronic Data Interchange- Data sharing:

Using EDI with suppliers provides the company two substantial
benefits. First all of its cuts the transaction cost associated with
ordering of the products and paying the invoices. Ordering
products and paying invoices can be made very productive and
efficient through EDI.
The second benefit is that these electronic link with suppliers
allows Walmart a high degree of control and coordination in the
scheduling and receiving the product deliveries. This helps to
ensure a steady flow of right products at the right time, delivered to
the right distribution centers by all Walmart suppliers.

Inventory data sharing:

Walmart shares inventory data with suppliers to maintain the better

stock levels. Suppliers use this data to form more accurate forecast

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prepare more effectively to meets the retails giant’s needs. The
relationship between Walmart and proctor and gamble (P&G) is a
great example of how the company has been able to leverage data-
sharing to create efficiencies.

Walmart has set up an automated re-ordering system that uses

satellite communication to tell P&G’s portfolio of companies when an
item is needed. The item is then delivered to a distribution center or
store in need.

Bargaining power:

Walmart deals directly with manufacturers without any need for

supply chain middleman. As the world’s second largest retailer, the
company wields enormous bargaining power and can demand lower
wholesale prices from suppliers. These savings are than passed onto
customer part of walmart’s Every Day Low Price guarantee.
Walmart makes up for its low prices and smaller margins with sheer
volume of sales.

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The company has strict policies in place to ensure suppliers deliver in
full on time (DIFOT), charging vendors 3% of the cost of goods, if
deliveries aren’t made as expected.

Everyday Low Price:

“Everyday low prices” are a way of doing two greatful things.

The first thing is to tell its price conscious customers they will always
get the best price; they need not look elsewhere or wait for specials
sales.

And the second thing is to accurately forecast the product sales. Sales
and other events designed to sway customer purchasing tend to make
a demand forecasting much more difficult and this affects the supply
chain planning.

By eliminating special sales and assuring customers of low prices, it

smooths out demand swing making demand more steady and
predictable. So stores are more likely to have what customers want
when they want it.

Big Box Store Format:

The big box store format allows the Walmart to combine a store and a
warehouse in single facility and get great operating efficiencies from
doing so. The big box is big enough to hold a large amounts of
inventory like a warehouse.

And since this inventory is being held at same location where

customer buys it, there is no delay or cost that would otherwise be
associated with moving products from warehouse to store. Again these
savings are passed along to the customer.

Cross docking:

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Cross docking is a logistics practice that is the centre piece of Walmart
strategy to replenish inventory efficiently. It means a direct transfer of
products from inbound or outbound truck trailers without need for
extra storage, by unloading items from an incoming semi-trailer truck
or railroad and loading these materials directly into outbound trucks,
trailers, or rail cars (and vice versa), with no storage in between.
Suppliers have been delivering products to Walmart’s distribution
centers where the product is cross-docked and then delivered to
Walmart stores. Cross-docking keeps inventory and transportation
costs down, reduces transportation time, and eliminates inefficiencies.

Advance Technology:

Walmart has a long history of leveraging technology to improves

operations. In 2015, company spend a reported $10.5 billion on
information technology and has also invested significantly in
improving their eCommerce facility. Some of the technology in recent
years includes:

 RFID tracking
 Smart tags that allows store employees to better track
inventory
 A centralized database that houses all inventory
information.
 Retail link database to improve communication with
suppliers and forecasting.
 My productivity app fer store room managers to minimize
the backroom tasks.
 Innovative patent filling including smart shopping carts,
electronic image devices that sense when inventory levels
are dropping, and in-store customer assistance drones.

Walmart Distribution Strategy

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Walmart’s distribution strategy is extensive and spans a wide range of
areas. It follows a business model of lowering or cutting down the costs
out of supply chains. The ultimate goal here is to help its consumers or
customers to save money.

Fewer Supply Chain Links

One of Walmart’s distribution strategies has to do with the creation of

fewer supply chain links. This has been effective in enhancing
efficiency while significantly lowering its distribution costs.

Right from its early days as a growing company, Walmart removed

some of its supply chain links. This meant that Walmart began
working directly with product manufacturers which in turn helped cut
costs significantly. This drastically improved the efficiency of supply
chain management.

Part of its distribution strategy was the unveiling of its Vendor

Managed Inventory (VMI) program. Under this program, rather than
Walmart managing its inventory, this responsibility is transferred to
product manufacturers. This is done in Walmart’s warehouse.

This distribution strategy has seen Walmart continuously achieve close

to 100% order fulfillment on merchandise delivery.

Streamlined Operations

Another Walmart strategy that has ensured it continues to meet and

fulfill client expectations is its streamlined operations. This is seen in
its partnerships with strategic partners (including product suppliers
and vendors).

Conclusion

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Walmart is a global giant when it comes to retail and e-commerce
among other things. This company has continued to expand its
operations into new territories.

However, we’ve also seen that such successes come with their own
challenges.

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