Supply Chain Strategy &

Processes
Wal-Mart Analysis

Submitted By
7/19/2022

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Table of Contents
Introduction............................................................................................................................. 1
Mission Statement................................................................................................................. 1
Vision Statement................................................................................................................... 1
Operational Performance Objective: Cost....................................................................................2
Supply chain management......................................................................................................... 3
Reduction in operating expenses.............................................................................................4
Innovation in Wal-Mart inventory...........................................................................................4
Wal-Mart supply chain Flow......................................................................................................5
Wal-Mart Competitor............................................................................................................6
Recommendations..................................................................................................................... 7
Conclusion............................................................................................................................... 8
References............................................................................................................................... 9

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Introduction
Sam Walton was the owner of a small franchised variety store when he founded Wal-Mart in
1962. Wal-Mart operates a diverse range of retail venues, including neighborhood markets,
big-box stores, and discount outlets. The company's stores continuously offer low pricing on
a wide range of products, including groceries, health & wellness, electronics, office supplies,
entertainment, hardlines, fashion, and home décor. The Wal-Mart US division is one of Wal-
Mart's three operating divisions. The third component is Sam's Club, which has locations in
26 countries, and the second component is Wal-Mart International. Retail sites for the
company's six product divisions, which include grocery, entertainment, health & wellness,
fashion & home, and everything in between, ranging from big supercenters to outlet malls to
little local centers and everything in between (Walton, 2012). Customers can save money by
purchasing in bulk, while the corporation can profit by selling huge numbers. Unlike other
stores, which remained unchanged when suppliers provided a discount, this was not the case
at one shop. To keep its expansion stable, maintaining low personnel expenses and avoiding
unions were among Wal-Mart's top priorities. In addition to Sam's Club and other warehouse
clubs, it owns and operates several other companies. In addition, to bill payments and check
to cash, the company offers financial services including wire transfers, money orders, and
prepaid cards (Roberts and Berg, 2012). Many different e-commerce platforms are used to
market and sell the company's products all over the world.

Mission Statement
Wal-Mart Inc.'s corporate mission is "to save people money so that they can live better,"
(Pandey et al., 2021). Wal-Mart uses price to attract the proper customers as one of its
marketing strategies. Such a selling point is seen in several of the firm's strategies. For
instance, one of Wal-Mart Inc.'s 4Ps is low prices. Other aspects of the business are impacted
by the need to lower sales prices in order to remain competitive.

Vision Statement
For Wal-Mart Inc., "Being the destination for customers to save money" applies regardless of
how they choose to make a purchase. As a result of the 2017 investor meeting, this goal was
officially stated. When the market's degree of competition and the retail sector's overall
health alter, the company's vision statement is put into effect (Moore et al., 2011).

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Operational Performance Objective: Cost
Retail services are designed with efficiency and economy in mind by the company's
operations management. Wal-Mart is known for its low prices due to its generic cost
leadership strategy (Stankevičiūtė et al., 2012). To implement this strategy, the corporation
focuses on maximizing the performance of its retail service workforce. For the Great Value
brand, Wal-Mart emphasizes low production costs in order to address the design of its items.
For example, the company's products are mass-produced in an easy-to-manufacture manner.
Wal-Mart's strategy is best understood in terms of how it allocates resources to support its
manufacturing and infrastructure operations (Found et al., 2018). As part of the company's
larger business strategy, its operational plan aims to maximize production and support
element efficiency while minimizing costs. Wal-Mart's operations strategy aims to reduce
costs by maximizing productivity as part of the company's cost leadership generic strategy.
There is a wide range of productivity metrics that can be applied to human resources and
internal business operations.
Wal-Mart's productivity metrics/criteria include, among other things: Order fulfillment time
and the revenue per unit of sales. The revenues per sales unit, sales revenues per store,
average sales revenues per store, and sales revenues per sales team are all included. Profit per
unit of sales is a goal for Wal-Mart. The stock out rate refers to the number of times a
product's inventory has previously been emptied or is in short supply. Wal-Mart's goal is to
have fewer instances of being low on inventory (Muasa, 2014). The length of the order filling
process is determined by the amount of time it takes to fulfill inventory requests from
retailers. Wal-Mart wants to minimize the time it takes to fill out a customer's order. These
goals have a direct impact on the company's ability to manage its operations. Wal-Mart is
also responsible for keeping track of its inventory. For inventory management decisions,
Wal-Mart uses vendor-managed inventory models and just-in-time cross-docking (Sarkar,
2021). Suppliers can make delivery decisions based on current inventory levels under the
vendor-managed inventory method. To avoid stockouts, the corporation employs this
strategy. But by utilizing just-in-time cross-docking, Wal-Mart can lower its inventory
amount, which helps the company save money. Methods like this help businesses maximize
their operational management decision-making performance in this area. Wal-Mart makes
use of both regular shift work and flexible scheduling. Streamlining internal business process
timelines is the focus of this operational management decision-making area. Streamlined
schedules allow the business to anticipate reduced losses due to overcapacity and its

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associated challenges. Wal-Mart's warehouse scheduling is based on current market trends
and is dynamic and flexible (Jawad, 2017). The company's inventory and supply chain
management methods, for example, allow suppliers to react swiftly to changes in inventory
levels. As a result, the bulk of Wal-Mart distribution hubs works on a more flexible timetable.
When it comes to retail operations and human resources, however, the corporation frequently
adheres to specified standard shifts. Consistent staffing is essential for maximizing the
capabilities of your employees." However, Wal-Mart only adjusts personnel and store
schedules as necessary, such as during Black Friday, and only to the extent that is required.

Supply chain management

The supply chain is a study of the process of suppliers needed to generate a certain product
for the company. The management of Wal-Mart's supply chain is viewed as taking care of
and optimizing the supply chain process, which includes goods and services. It is considered
essential to business (Tan et al., 2018). Most efficient supply chain management strategies
must be used. Over the past two decades, Wal-Mart has become the world's largest and most
powerful retailer thanks to its high sales per square foot, inventory turnover, and operating
profit. With 2 million employees in 20+ countries and an average of $30 billion in inventory,
this retail giant handles more than 11,000 sites under 50+ different corporate names,
according to Supply Chain Digest.
With these kinds of numbers in mind, it is critical to have a supply chain management
strategy and system in place. The company as a whole is committed to a business strategy
that reduces costs in supply chains in order to benefit customers financially and improve their
quality of life. Wal-Mart Inc.'s operations management employs a variety of methods that
center on inventory control, supply chain management, and sales results. The efficiency of a
company's retail operations is critical to its long-term success (SMITHSON, 2020). When
Wal-Mart first debuted, customers could get the goods they wanted whenever and wherever
they wanted. Before this, the corporation concentrated on building cost structures that
allowed them to retain low rates. To take advantage of this advantage and grab market
leadership, Wal-Mart developed a more complex and more structured supply chain
management strategy. During Wal-Mart's early years, its supply chain management was
critical to the company's growth. Some of Wal-Mart's supply chain links were torn out when
the company was just getting established. Before opening the first Wal-Mart in 1962 in
Rogers, Arkansas, founder Sam Walton owned many Ben Franklin businesses. He picked and
delivered the bulk merchandise for his retail outlets. A decade ago, Wal-Mart began engaging

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directly with manufacturers, hoping to save costs and better manage its supply chain (Natto,
2014). Vendor Managed Inventory (VMI) was Wal-Mart's supply chain initiative that gave
manufacturers control over their items in the retailer's warehouses. As a result, Wal-Mart may
anticipate fulfilling orders at a rate approaching 100 percent.
Wal-Mart was voted Retailer of the Decade in 1989, beating out competitors like Kmart and
Sears with its cheap distribution costs. Since that time, the company's supply chain has only
become better. Negotiating power with suppliers is a crucial aspect of Wal-Mart's operations
management decision-making process. Wal-Mart's use of information technology and its
bargaining stance with suppliers successfully address this component of operations
management decision-making. The company's supply chain leverages cutting-edge
information technology to the utmost degree feasible (Agrawal and Smith, 2015).
Management systems for the supply chain are integrally related to Wal-Mart's operations.

Reduction in operating expenses

Managers and suppliers may now collaborate on determining the ideal times to move certain
quantities of goods around the supply chain thanks to these new technologies. One of Wal-
Mart's operational management techniques is to make utilization of its inventory. This is how
Wal-Mart, the world's largest retailer, persuades suppliers to collaborate with it. Because of
the retailer's supply chain's considerable use of cutting-edge information technology, its
negotiating power has been boosted significantly (Natto, 2014). Retail giant Wal-Mart has
found that supply chain management information solutions have helped it save costs. Using
these tools, managers, and suppliers can collaborate on determining the best times to move
certain quantities of products through the supply chain. This disease relies on commercial
competition to get a competitive advantage. As one of the largest retailers in the world, the
corporation has considerable negotiating clout when it comes to addressing supply chain
management issues (Tan et al., 2018). But Wal-Mart manages to create a balance between the
needs of the company and the interests of its suppliers, an important group of stakeholders,
while still adhering to its stakeholder and CSR policies.

Innovation in Wal-Mart inventory

With strategic sourcing, Wal-Mart has always sought to get the greatest deals on items from
suppliers who can assure they can satisfy demand. Strategic alliances are formed with the
bulk of the company's vendors in return for low pricing in exchange for long-term, large-
volume purchases. Wal-Mart's supply chain management was simplified to increase material

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flow and minimize inventory through the development of networks of connections and
communication with its suppliers. There is a widespread belief that the global network of
suppliers, warehouses, and retail locations operates as a single entity. When it comes to
financial resources, Wal-Mart has a lot because of its global structure (Mehrjerdi, 2009). For
example, global supply networks help businesses withstand market-specific risks, such as
supply chain interruptions in local markets. To further enhance its supply chain, Wal-Mart
uses cutting-edge technology to track and manage the movement of items from suppliers to
its shops.

Wal-Mart supply chain Flow

Supply chain management at Wal-Mart uses a number of approaches based on the product,
vendor capabilities, and customer needs. Another feature included in the supply chain's
architecture is a collection of tools for facilitating product transportation, as well as tools for
product maintenance and eradication. When constructing a company's supply chain,
operational risk and performance must be taken into consideration. Wal-Mart has a well-
developed logistics system, but they still have issues that they notify frequently via a variety
of channels (Ge et al., 2019). There are satellite systems, store-level sales systems, and a
centrally managed database system that connects each chain of stores. During the
implementation of its supply chain strategy, the corporation does not participate or share
information with other parties. Wal-Mart has had a huge impact on the retail industry by
collaborating with its suppliers, distribution centers, and retail locations to share information.
Everything from the store's design to the introduction of cutting-edge technology is being
updated to ensure a seamless shopping experience and the elements necessary for growth
(Wang, 2016).

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Wal-Mart Competitor
For many years, Wal-Mart has held the title of the largest company in the United States.
Many people believe that the most essential features of present economic globalization are
global labor practices and outsourcing tactics (Brunn, 2006). Tesco is a well-known grocery
store business in the United Kingdom, with 1,878 stores around the country. It has 261
European locations and 179 Asian locations, and clients from all over the world can shop at
any of these locations. Tesco is currently one of the largest merchants in the world (Palmer,
2005). Wal-Mart's main competitor is Tesco, a food store chain located in the United
Kingdom. A supermarket in the United Kingdom Tesco's supply chain management strategy
is more collaborative and characterized by relationship-building initiatives. More than a
dozen locations in other nations utilize this strategy. Tesco, for example, has changed the
structure of its supply chain (SC) by embracing vertical integration, lean manufacturing, and
complexity management in order to capitalize on supply chain globalization and reap its
benefits. Merchants now have more control over their supply chains because of the
implementation of SCM technologies (Woods, 2008). Tesco's global expansion in sourcing
and operations has necessitated a rethink of both its domestic and foreign supply chains. To
manage suppliers, evaluate SC performance, and maintain high standards, it used a system
known as the "steering wheel."
Tesco employs a wide range of tactics to improve inventory management and delivery in a
setting that is notoriously difficult logistically. According to Thompson et alfindings, a Tesco

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store's non-food area can require up to 20,000 square feet of space. Each supplier is
responsible for ensuring that their products satisfy the set requirements, which may include
meeting rigorous deadlines and maintaining a high level of quality, for each of the product
lines. Tesco's suppliers deliver at regular intervals to ensure that the company's distribution
centers and supermarkets always have enough stock (Smith and Sparks, 2009). Customers
may expect Tesco to keep their shelves supplied by assessing the number of items needed at
each location. Systems that maintain track of inventory levels for a wide range of products
are extremely useful during the ordering process. The electronic point of sale (EPOS) is one
example of this technology, which keeps track of sales and uses that data to calculate
inventory levels. It is now much easier for Tesco to share information with its many vendors
because of a browser system. By strengthening their ability to respond quickly to shifting
demands, providers may ensure that their clients always have access to food. Tesco has a
global supply network in addition to being on the cutting edge of technology. Tesco formed
the Tesco Sustainable Dairy Group (TSDG) in 2007 to defend the interests of UK customers
while meeting quality criteria for sustainable dairy products (Sparks, 2010).
Tesco also establishes long-term strategic connections with reputable vendors as part of its
worldwide supply network management. With the Marbour group, which manufactures
basmati rice, we have collaborated for many years. Due to an arrangement between the two
firms, this supplier may provide Tesco European stores with branded rice. This strategy has
enhanced Tesco's ties with suppliers, and the company is now able to share the risks and costs
of packaging, currency fluctuations, and shipping expenses with those suppliers. Tesco has
enhanced its ability to manage its complex supply networks through the use of a number of
customer-focused operational solutions (Francis, 2004). With the application of lean
principles and technologies for complexity management, the delivery process, inventory
levels, and operating costs are all being reduced. Vertical integration within the company's
supply chain is being focused heavily to increase product quality. Tesco has implemented
several different tactics, such as supply chain analytics, graphics, and online purchasing, in
order to improve the customer experience and gain an advantage over its competitors.

Recommendations
It stands to reason that Wal-Mart's distribution network should also serve as the company's
operations hub. Every aspect of distribution is affected, from shipment tracking to the
development of sales strategy. To enhance its distribution network, Wal-Mart may need to
use a cluster or holistic approach. This is owing to the complexities of the supply chain. The

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business can analyze the major aspects of the distribution network and identify how the
components interact with one another by taking a holistic approach. Wal-Mart must develop
and implement a strategy for tackling the problems of assuring the continued viability of its
supply chain (Park and Li, 2021). Environmental and social problems, as well as the sources
of the inventory, are taken into account throughout the development of these approaches.
Open channels of communication with suppliers are essential for the operation of a healthy
supply chain.

Conclusion
To put it another way, Wal-Mart's distribution system makes perfect sense as the company's
central command post. The development of sales strategies and the tracking of shipments are
just two examples of how distribution is impacted. In order to improve its distribution
network, Wal-Mart may need to implement a cluster- or holistic-based strategy (Natto, 2014).
The supply chain's complexity is to blame for this. Using a holistic approach, the
organization can examine the main components of the distribution network and determine
how the parts work together. Wal-Mart must devise a strategy for dealing with the challenges
it faces in maintaining its supply chain's viability and then put that strategy into action. When
developing these methodologies, environmental and social concerns, as well as the sources of
the inventory, are taken into account. Maintaining open lines of communication with your
suppliers is essential to running a sustainable supply chain.

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