OPERATIONS

MANAGEMENT 2
Batch 2022-24 Term-3

Submitted To Submitted By
~ Professor PRS Sarma Arpita Sonawane (2210156)
Contents

About the Company............................................................................................................................3

Supply Chain Management at Walmart............................................................................................3
Lean Management at Walmart..........................................................................................................5
Quality Management at Walmart......................................................................................................7
Conclusion............................................................................................................................................8
References............................................................................................................................................9
About the Company

Walmart is an American multinational retail corporation that operates a chain of discount

department stores, grocery stores, and hypermarkets. It was founded in 1962 by Sam Walton
in Rogers, Arkansas, and has since grown to become one of the largest retailers in the world,
with over 11,000 stores in 27 countries as of 2021.

Walmart's business model is based on offering a wide range of products at low prices to
attract a large customer base. The company is known for its "Everyday Low Prices"
campaign and has a reputation for being one of the most affordable retailers in the market.

Walmart offers a variety of products, including groceries, clothing, electronics, home goods,
and more. In recent years, the company has also made significant investments in e-commerce,
with the acquisition of several online retailers and the development of its own online
marketplace.

Supply Chain Management at Walmart

Walmart's supply chain strategy focuses on long-term relationships with manufacturers,

distributors, and ecommerce businesses. The company has invested in technology and
implemented omnichannel capabilities, resulting in streamlined fulfillment and reduced costs.
Walmart has also implemented a vendor management inventory (VMI) system, allowing
suppliers to manage their own inventory in Walmart's warehouses. Walmart seeks passionate
supply chain professionals who can adapt quickly to change, with featured roles including
Project Managers, Industrial Engineers, Data Scientists, Replenishment, and Planning.
Despite Walmart's efficient supply chain management, the company faces challenges related
to the size and scale of its operations, sourcing goods from various suppliers, and managing
inventory levels effectively. To remain competitive, Walmart must continuously innovate and
stay ahead of its competitors in the highly competitive retail industry.

Key Components of Walmart's Supply Chain Management:

 Distribution Centers:
Walmart has a vast network of distribution centers (DCs) that serve as the company's
central hubs for receiving, sorting, and shipping products. These DCs are strategically
 located near major population centers and transportation hubs, allowing Walmart to
quickly and efficiently move products from suppliers to stores.

 Transportation:
Walmart's transportation network is another critical component of its SCM system.
The company owns a fleet of trucks and maintains relationships with third-party
carriers to ensure that products are delivered to stores on time and in the most cost-
effective manner. Walmart also uses innovative technologies, such as GPS tracking
and route optimization software, to enhance its transportation operations.

 Inventory Management:
Effective inventory management is essential to Walmart's SCM system, as the
company operates on a low-cost model that requires tight control over inventory
levels. Walmart uses sophisticated inventory management software to track inventory
levels and anticipate demand, allowing the company to quickly adjust its supply chain
to changes in consumer demand.

 Supplier Relationships:
Walmart has developed strong relationships with suppliers, leveraging its enormous
buying power to negotiate lower prices and better terms. The company also works
closely with suppliers to ensure that products are delivered on time and meet
Walmart's stringent quality standards.
 Reference: https://www.researchgate.net

Challenges Faced by Walmart's Supply Chain Management:

 Complex Network:
Walmart's vast network of suppliers, distribution centers, and stores presents a
significant logistical challenge, requiring careful coordination and management to
ensure that products are delivered efficiently and on time.

 Cost Pressures:
As a low-cost retailer, Walmart must continuously seek to reduce costs throughout its
supply chain. This requires the company to innovate and adopt new technologies to
enhance efficiency and reduce waste.

 Supply Chain Disruptions:

Natural disasters, geopolitical events, and other unforeseen disruptions can have a
significant impact on Walmart's supply chain. The company has developed
 contingency plans to mitigate the impact of these disruptions, but they remain a
significant challenge.

Successes of Walmart's Supply Chain Management:

 Efficient Operations:
Walmart's SCM system is renowned for its efficiency, allowing the company to
deliver products to stores quickly and at a low cost.

 Innovative Technologies:
Walmart has invested heavily in innovative technologies, such as RFID tagging and
automated inventory management, to enhance its SCM operations.

 Environmental Sustainability:
Walmart has made a commitment to environmental sustainability and has
implemented numerous initiatives to reduce its carbon footprint, including optimizing
transportation routes and using energy-efficient lighting in stores and distribution
centers.

Lean Management at Walmart

In Lean management is a methodology that aims to streamline processes, eliminate waste,

and optimize efficiency. Walmart, as a leading retailer, has implemented lean management
practices to enhance its operations and remain competitive in the retail industry.

Key Principles of Walmart's Lean Management:

 Focus on the Customer:

Walmart places a strong emphasis on understanding and meeting the needs of its
customers. The company uses customer feedback to identify areas for improvement
and drive continuous improvement throughout its operations.

 Continuous Improvement:
 Continuous improvement is a core principle of lean management, and Walmart has
embraced this philosophy throughout its operations. The company uses tools such as
Kaizen, which involves making small, incremental improvements to processes over
time, to enhance its operations and eliminate waste.

 Employee Empowerment:
Walmart places a strong emphasis on empowering its employees to identify and solve
problems. The company encourages its employees to suggest improvements and
provides training and support to help them implement changes.

 Value Stream Mapping:

Value stream mapping is a key tool used in lean management to identify areas of
waste and inefficiency in processes. Walmart uses value stream mapping to identify
opportunities for improvement and eliminate waste throughout its operations.

Key Tools of Walmart's Lean Management:

 Six Sigma:
Six Sigma is a data-driven approach to quality control that aims to reduce defects and
variability in processes. Walmart has adopted Six Sigma principles throughout its
operations, using data and analysis to drive continuous improvement and enhance the
customer experience.

 Just-In-Time (JIT) Inventory:

JIT inventory is a strategy that involves maintaining low inventory levels and only
ordering products as they are needed. Walmart has embraced this approach, using
advanced inventory management systems and close relationships with suppliers to
minimize inventory levels and reduce waste.

 Kanban:
Kanban is a tool used to manage inventory levels and ensure that products are
available when needed. Walmart uses Kanban systems throughout its supply chain to
optimize inventory levels and improve efficiency.
Successes of Walmart's Lean Management:

 Improved Efficiency:
Walmart's lean management approach has resulted in significant improvements in
efficiency and productivity throughout its operations. The company has streamlined
processes, eliminated waste, and optimized its supply chain to reduce costs and
enhance the customer experience.

 Enhanced Customer Experience:

By placing a strong emphasis on customer feedback and continuous improvement,
Walmart has enhanced the customer experience and strengthened its brand reputation.
The company has improved store layouts, increased product availability, and reduced
checkout times to make the shopping experience more convenient and enjoyable for
customers.

 Increased Sustainability:
Walmart's lean management approach has also contributed to its sustainability efforts.
By reducing waste and optimizing its operations, the company has reduced its
environmental impact and increased its energy efficiency.

Quality Management at Walmart

Walmart, as a leading retailer, has implemented Walmart is committed to providing high-

quality products and services to its customers. The company has implemented several quality
management practices to ensure that its products meet or exceed customer expectations. Here
are some of the ways Walmart manages quality:

 Supplier quality management:

Walmart has a rigorous supplier selection process that includes evaluating suppliers
based on their quality management systems. The company works with its suppliers to
establish quality standards and monitors their compliance through regular audits.

 Product testing:
 Walmart performs rigorous testing on its products to ensure they meet safety and
quality standards. This includes conducting product testing in-house and partnering
with third-party labs.

 Continuous improvement:
Walmart is committed to continuous improvement in all areas of its operations,
including quality management. The company regularly reviews its processes and
procedures to identify areas for improvement and implements changes to improve
product quality and customer satisfaction.

 Employee training:
Walmart provides extensive training to its employees on quality management best
practices. This includes training on product testing, quality control, and safety
standards.

 Customer feedback:
Walmart actively solicits feedback from its customers through surveys and other
means. The company uses this feedback to identify areas for improvement and make
changes to its products and services.

Conclusion

Walmart's supply chain management strategy has contributed significantly to the company's
success. The company's long-term relationships with suppliers, investment in technology, and
inventory management practices have enabled it to operate efficiently and cost-effectively.
Walmart's supply chain management team is comprised of skilled professionals who operate
in a fast-paced environment and make strategic decisions quickly. However, the company
faces challenges related to the size and scale of its operations, sourcing goods from multiple
suppliers, and managing inventory levels effectively. To remain competitive, Walmart must
continue to innovate and stay ahead of its competitors in the highly competitive retail
industry.

Walmart's lean management approach has been a significant factor in the company's success
as a leading retailer. By focusing on the customer, empowering employees, and continuously
improving its operations, Walmart has enhanced efficiency, reduced waste, and improved the
customer experience. The company's adoption of lean management principles and tools,
including Six Sigma, JIT inventory, and Kanban, has enabled it to remain competitive in the
retail industry and serve as a model for other companies seeking to optimize their operations.
References

 https://www.shipbob.com/blog/walmart-supply-chain/
 https://careers.walmart.com/corporate/supply-chain-and-logistics
 https://datahawk.co/blog/walmart-supply-chain-solutions
 Walmart Corporate. Walmart's Supply Chain. Retrieved from
https://corporate.walmart.com/sustainability-timeline/sustainability-timeline-2005
 Supply Chain Dive. Walmart's Supply Chain: 4 Key Challenges. Retrieved from
https://www.supplychaindive.com/news/walmart-supply-chain-challenges/442301/
 https://www.researchgate.net