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INDEX
S.NO 1. 2. 3. 4. 5. 6. 7. 8. 9. DESCRIPTION PAGE NUMBER 3 4-5 6 7-8 9 10 11 12 INTRODUCTION TO SUPPLY CHAIN MANAGEMENT LEVELS OF SUPPLY CHAIN MANAGEMENT HISTORY-WALMART WAL-MART INTRODUCTION AND ITS BUSINESS PROCESSES SUPPLY CHAIN MANGEMENT AT WAL-MART PROCUREMENT AND DISTRIBUTION LOGISTICS MANAGEMENT INVENTORY MANAGEMENT COMPETITIVE ADVANTAGE AND BUSINESS MODELS USED AT WAL-MART 10. 11. 12. 13. RFID IN WAL-MART EFFICENCY IN SUPPLY CHAIN WITH RFID CONCLUSION LIST OF REFERENCES 20-21 13 14 15-18 19
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Typical supply chain showing interrelations between all involved parties. [Source: Auto-ID: Managing Anything, Anywhere, Anytime in the Supply Chain, Bose and Pal, ACM August 2005] SCM subsists in both service and manufacturing environments. A typical supply chain consists of many interactions between suppliers, manufacturers, distributors, retailers, with the vital goal of providing either a service or a product to customers. This also works in reverse with the customer at the head of the process when returning a product. SCM is used as a means to assimilate planning, purchasing, manufacturing, distribution, and marketing organizations that normally do not work together to achieve a common goal. Each works toward goals specific to their own organization that accomplish narrow objectives. SCM is a way of integrating these varying functions so that they work together to make best use of the benefits for all involved.
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Three Levels of SCM [Source: Auto-ID: Managing Anything, Anywhere, Anytime in the Supply Chain, Bose and Pal, ACM August 2005] Strategic SCM covenants with future planning than looking at market evaluation, capacity issues, new products, and technology changes. This planning is addressing issues that may be factors several years out. This is accomplished at the executive management level. Tactical SCM involves a shorter planning cycle. It is more concerned demand planning, inventory planning, and supply planning. This is determined at a less senior level than Strategic SCM. Operational SCM is current planning activities measured in at most weeks. Operational SCM involves the mainstream of the operations. It includes demand fulfillment, scheduling, production, transport, and monitoring. There are many decisions that are made while looking at SCM. They follow the categories as discussed above. Strategic decisions are made over longer periods of time and linked to a corporations strategy. Operational decisions are more or less short term in nature and look after day to day activities. Mainly Four major decisions are considered. They include decisions on location, production, inventory, and transportation. A geographically strategic placement of the production facilities is key to creating a successful supply chain. Decisions on what products to be produced have to be made wisely and strategically. Also, where these products (which locations) will be manufactured is very important to SCM. Inventory decisions and management is critical. Some inventories are necessary to hedge against uncertainty, but this comes with a cost. Managing these inventories proficiently will be of benefit to the corporation. Transportation decisions include cost versus benefit. Air transportation is costly, but fast and reliable. Other modes of transportation may be cheaper, but the sacrifice has to hold inventories due to delays that may occur. If the above
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Logistics Management This involves fast & responsive transportation system. More than 7000 company owned trucks services the distribution centers. These dedicated truck fleets enables shipping of goods from distribution centers to the stores within 2 days and replenish the store shelves twice a week. The drivers hired are all very experienced & their activities are tracked regularly through Private Fleet Driver handbook. This allows the drivers to be aware of the terms & conditions for safe exchange of Wal-Mart property, along with the general code of conduct.
For more efficiency, Wal-Mart uses a logistics technique called Cross Docking. In this system, finished goods are directly picked up from the manufacturing site of supplier, sorted out and directly supplied to the customers. This system reduces handling & storage of finished goods, virtually eliminating role of distribution centers & stores. Because of cross-docking the system shifted from supply chain to demand chain which meant, instead of retailers pushing the products into the system, the customers could pull the products, when & where they required.
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Competitive Advantage Wal-Mart has been an undisputed leader in offering the markets lowest prices to consumers. It has always given a price match guarantee, and has challenged other stores to offer lesser prices and has agrees to reimburse the difference, the difference of price if any. No other store could meet this and Wal-Mart has been leading the pack for years. Market Opportunity Wal-Mart employs a combination of two Business Models viz. B2B Single firm network Business Model SAMS CLUB segment of Wal-Mart supports small businesses. Its main focus in this segment is to create its own network of trusted partners to coordinate supply chains and provide exceptional value on brand-name merchandise at Members Only prices. B2C E-Tailor Business Model Wal-Mart uses clicks and bricks methodology to provide millions of its customers online version of its retail store, where customers can shop at any hour of the day or night without leaving their home or office. Wal-Mart employs Sales revenue model as it is mainly involved in sale of goods and services. These two models help Wal-Mart in achieving its business perspectives related to its firms organizational needs and the second helps in its interaction with the customer and manages goods and services offered by Wal-Mart to the end users.
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