WALMART CASE

By Group 2 : Basma Wafaa Marjory Ahlam Mouad Harris - Ilias

1- Walmart has been able to achieve respectable leadership in retail industry
because of its focus on supply chain management. Discuss in detail the
distribution and logistics system adopted by Walmart.
The logistics system adopted by Walmart is based on reducing costs ; good
economies of scale and great bargaining power
Distribution System :

Buy goods from direct manufactures.

Pick up goods from suppliers by own trucks

Establish long term relationship with local and regional suppliers.

Logistics System :

Walmart had over 40 distribution centers and serviced by more than 3500
company owned trucks. (Shipping cost 3% as against 5% for competitors)

Hired experienced drivers who use a private fleet driver handbook

Supplied goods directly thanks to cross-docking

2- Explain how IT benefited Walmarts logistics and inventory management

Satellite communication system

o

Expansion of Walmart stores in the US

Managing and communicating with Stores in real time

Automated Reordering System

o

Making a partnership with P&G (IT that make a link between P&G, all
computers, stores and distribution channels)

Maintaining the availability of goods in stores

Radio frequency system

o

Helping in keeping track of the inventory in stores(easy order packing

and physical counting of the inventories).

Algorithm system to forecast exact quantities

o

Centralizing inventory data system

Developing algorithm system, that forecast the exact quantities of

each items to be delivered, based on the inventories in each store.

3- What were the supply chain management process adopted by Walmart and
how far were they effective?
Walmart has adopted an effective management process of the supply chain
management by managing various components including procurement, distribution,
logistics, inventory management and using innovative IT tools has helped the
company in improving the efficiency of supply chain.
Indeed, they gave service with 3,500 company owned trucks in order to develop the
fastest logistics infrastructure, which is their strength.
They have hired only real professionals, so people who are experienced drivers to
maintain the quality of their supply chain, avoiding accidents or traffic violation. All
informations about tracking are recorded and organized by computerized system
that guarantees a better traceability in order to avoid lack of information and
improve communication.
Moreover, the supply chain management adopted other processes by monitoring
the trip of the driver and having clear informations about the drivers activities, for
example the importance to know the time of transportation between the distribution
center and the retailer store , and that by using the private fleet driver Handbook.
More than that Wal-mart used logistic technique named: "cross docking" in order to
reduce the handling and store of finished goods so that its distribution process
become efficient
, the delivering of the goods become faster and all the
transportation system become responsive.

4- What was the nature of benefited derived by Walmart from the efficient
supply chain management practice and how far it has contributed to its
sustainable competitive advantage?
Having several supply chain partnership and a rigorous supply chain, walmart was
able to provide a wide range of products, with a low cost due to an important
reduce in the transportation cost and a fast inventory turn over and an increased
warehouse space. Adding to this a better working capital utilisation, eliminating old
stock and maintaning quality of goods.
In fact Walmart was able to reach a level of econimies scales by mastering its
process. As well as short and interesting delevery deadlines. The digital Policy of
sharing data sales contributed also to the efficiency of its supply chain.