QUESTION
Assignment Record Form
Student Name: ????? ???? ??
University of Derby Index Number: ??????
Learning Centre:
Course: MBA
Term: 2012 T2
Module Title: Strategic Logistics & Supply Chain Management
Module Leader:
Assignment Submission Due Date:
Status:
I confirm that I have read and understood the University regulations with regard to referencing and plagiarism. YES NO
Module Leader’s Comments:
Word Count: ???? 4500 (+/-10%)
Module Leader’s Comments on Citing & Referencing
EXECUTIVE SUMMARY ( 300-350 Words )
Guidelines:
o ES is the summary of the whole assignment. It should be written after you have completed your assignment
o About 300-350 words ( Or About 1 page in length )
o ES should be written on a separate page
o Generally, there is no page number for ES unless you want to use “Roman Numbering” such as I, II, III etc. The first page should start from Introduction.
o ES should be arranged before the “Table Of Contents”
o ES should be written in “Past Tense”
o ES should be written in paragraph P1, P2, P3, & P4 etc.
P1: …………………………………………………………………………………………
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P2: …………………………………………………………………………………………
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P3: …………………………………………………………………………………………
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P4: …………………………………………………………………………………………
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TABLE OF CONTENTS
PAGE
1.0 INTRODUCTION 00
2.0 COMPANY BACKGROUND
2.1 Background Information 00
2.2 Main Products & Customers Or Business Activities 00
2.3 Current Situation 00
3.0 OVERVIEW OF SUPPLY-CHAIN OPERATIONS REFERNCE
(SCOR) MODEL
3.1 SCOR Model Level 1 00
3.2 SCOR Model Level 2 00
3.3 SCOR Model Level 3 00
3.4 SCOR Model Level 4 00
4.0 APPLICATION OF THE SCOR MODEL METHODOLOGY
Three steps to applying SCOR Model for supply chain performance and improvement are described as follows:
4.1 Process Modelling 00
4.2 Performance Measurements 00
4.3 Best Practice Implementation 00
5.0 APPLICATION OF NEW TECHNOLOGIES 00
5.1 Bar Coding & Scanning 00
5.2 Radio Frequency Identification (RFID) 00
5.3 Radio Frequency Tags (RFTs) 00
5.4 Electronic Data Interchange (EDI) 00
5.5 Electronic Commerce (E-Commerce) 00
5.6 Internet 00
5.7 Enterprise Resource Planning (ERP) 00
6.0 CONCLUSIONS 00
7.0 RECOMMENDATIONS 00
8.0 REFERENCES 00
9.0 APPENDICES 00
YOUR ASSIGNMENT SHOULD START FROM HERE !!!!!!
1.0 INTRODUCTION
P1: Describe the Supply Chain Management
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P2: Describe briefly the SCOR Model
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P3: Describe briefly the Integration of the Supply Chain
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P4: What is the purpose of this assignment?
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2.0 COMPANY BACKGROUND
2.1 Background Information
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2.2 Main Products & Customers
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2.3 Current Situation
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3.0 OVERVIEW OF SUPPLY-CHAIN OPERATIONS REFERNCE (SCOR) MODEL
Source 1 : ???????????????????
Source 2: SCOR Model (SCOR Overview Version 9.0)
3.1 SCOR Model Level 1
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3.2 SCOR Model Level 2
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3.3 SCOR Model Level 3
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3.4 SCOR Model Level 4
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4.0 APPLICATION OF THE SCOR MODEL METHODOLOGY
Three steps to applying SCOR Model for supply chain performance and improvement are described as follows:
4.1 Process Modelling
Refer to Chapter 2 : The SCOR Model (P.90-93)
>>The Process Modelling Pillar
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4.2 Performance Measurements
Refer to Chapter 2 : The SCOR Model (P.93-94)
>>The Performance Measurements Pillar
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4.3 Best Practice Implementation
Refer to Chapter 2 : The SCOR Model (P.94-95)
>>The Best Practice Pillar
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5.0 APPLICATION OF NEW TECHNOLOGIES
5.1 Bar Coding & Scanning
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5.2 Radio Frequency Identification (RFID)
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5.3 Radio Frequency Tags (RFTs)
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5.4 Electronic Data Interchange (EDI)
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5.5 Electronic Commerce (E-Commerce)
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5.6 Internet
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5.7 Enterprise Resource Planning (ERP)
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o Vendor Managed Inventory (VMI) is the system of demand management & replenishment. (Refer to Christopher p.203)
6.0 CONCLUSIONS
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7.0 RECOMMENDATIONS
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8.0 REFERENCES
Guideline 1: Follow the Harvard Referencing
Guideline 2: All the references must be arranged in “Alphabetical Order”.
9.0 APPENDICES
ADDITIONAL USEFUL INFORMATION
Assignment Question
Supply Chains and Value Chains have been around for many years and Logistics has
served as glue to bind the different members. But in the current era of globalization new
problems are surfacing in the supply chains (e.g. politics, and terrorism).
Critically evaluate the new Logistics, Supply Chain and Supply Chain Management issues suggest how Strategic Management can help to bring a supply chain to a new maturity level, say from the current level to one level higher, say from level 3 to Level 4.
The SCOR Model and the application of new technologies (hard and soft) offer an
opportunity to bring a supply chain to a new level of performance. How could a supply chain capitalize on the application of the SCOR Model Methodology to minimize the total supply chain Inventory in the Order fulfilment Value Stream and yet raise the service level to the final customer?
Craft a practical strategic plan for minimizing total supply chain inventory in the Order fulfilments Value Stream for your selected supply chain.
Note for Student
The selected supply chain should preferably a real supply chain in your country. Its
description should be included in the Appendix. In your written assignment you need not
describe the SCOR Model.
SOLUTION
EXECUTIVE SUMMARY
Wal-Mart being the largest retail store across the globe has been chosen for studying the strategic Logistics and Supply Chain Management. The tiniest change on the store layout is being sensed at Wal-Mart and several merchandising techniques are used by Wal-Mart to provide value to the customers and improve the performance. Wal-Mart has always been reaping the benefits of being effecting in Supply chain management and Logistics. It also enjoyed the benefits of low transportation costs because it has its own transportation system which helps in delivering the goods within 48 hours.
The Supply Chain Management system of Wal-Mart is efficient as it reduces the lead time which helps in faster inventory turnover. Using the SCOR Model which has four levels that is the Top Level, the Configuration Level, The Process Level and the Implementation Level Wal-Mart has made its supply chain management very effectual. It can plan, make, source and deliver all the products by channelizing the whole supply chain management system.
The effectual supply chain management practices along with the three pillars supporting the SCOR Model of the company that is the Process Modelling, Performance Management and Best practice Implementation have helped it to rise above its competitors in the market.
The usage of the latest technology and implementation of that technology like the bar coding and Scanning, RFID implementation, Radio Frequency tags, Enterprise Resource Planning, E-commerce website development , Electronic Data Integration and Internet presence have added to the success of Wal-Mart. They have helped in reducing the inventory cost and replenishment of products on shelves on time and closely connecting with the customers. That is why Wal-Mart has been considered the topmost retailer which is always ready to offer the lowest price to their customers and stay ahead.
Table of Contents
EXECUTIVE SUMMARY.. 2
1.0 INTRODUCTION.. 4
SCOR MODEL. 5
Integration of Supply Chain. 5
Purpose of this assignment 6
2.0 COMPANY BACKGROUND.. 7
2.1 Background Information of company. 7
2.2 Main products and Consumer 8
2.3 Current Situation. 10
3.0 OVERVIEW OF SUPPLY CHAIN OPERATIONS REFERENCE SCOR MODEL. 11
3.1 SCOR Model Level 1. 11
3.2 SCOR Model Level2. 12
3.3 SCOR Model Level3. 13
3.4 SCOR Model Level 4. 13
4.0 APPLICATIPON OF SCOR MODEL METHODOLOGY.. 14
4.1 Process Modelling. 14
4.2 Performance Measurement 14
4.3 Best Practice Implementation. 15
5.0 APPLICATION OF NEW TECHNOLOGIES. 15
5.1 Bar Coding & Scanning. 15
5.2 Radio Frequency Identification (RFID) (Moorman, 2005) 15
5.3 Radio Frequency Tags (RFT’s) 16
5.4 Electronic Data Interchange (EDI) 16
5.5 Electronic Commerce (e-commerce) 17
5.6 Internet 17
5.7 Enterprise Resource Planning (ERP) 17
6.0 CONCLUSIONS. 18
7.0RECOMMENDATIONS. 19
8.0 REFERENCES. 20
Bibliography. 20
9.0 APPENDICES. 22
Appendix 1: 22
APPENDIX 2. 23
Appendix 3. 24
1.0 INTRODUCTION
During the last two decades Supply Chain Management (SCM) has emerged as a management concept and at present many international companies have adopted as well as implemented this new concept in their organisation for e.g. Zara, Procter & Gamble, DELL Computers, Nike, CISCO, Nokia, and Gillette etc. The reason being the competitiveness of the organisations depends highly on their capability to deliver customised products timely and as quickly as possible all across the globe (Jespersen and Skjott-Larsen, 2005). That is why SCM has become a vital management tool and an important parameter for being competitive for the companies.
All the major activities and organisations which are related with the flow and conversion of goods from the stage of just being raw materials, through to the end users, along with the various associated information flows are called Supply Chain (Handfield and Nichols, 2002). IN any supply chain both, material and information’s flow upwards and downwards. Supply Chain Management is the perfect integrating and management of supply chain organisation and their activities by developing co-operational relationships between organisation, Effectual business processes and information sharing at very high levels in order to form high-performing value systems which give the member organisations a competitive advantage to sustain in the market (Handfield and Nichols, 2002).
The management of upstream as well as downstream relationships with not just suppliers but also with customers so that superior customer value could be delivered at a much lesser cost to the supply chain on the whole is referred to as SCM . The figure below depicts a simple supply chain model:
SCOR MODEL
The innovative tool for cross-company optimization done for supply chains which is helpful in describing the fundamental functionality of any supply china which is competitive sis called Supply Chain Operations Reference (SCOR) Model. It facilitates the following three tasks :
- Evaluation of performance of supply chains and comparison with the benchmarks.
- Suitable orientation and suggestions through interfering, for the usage of software and the functionality existing in the supply chain should be found.
- Design of the supply chains should be thoroughly integrated
SCOR Model is basically set-up in hierarchical manner and contains four different levels:
- Top Level
- Configuration Level
- The Process Element Level
- The Implementation Level
Step by step the degree and level of concretisation increases in the model and all the levels of SCOR model follow separate objectives to be fulfilled .The complete supply chain and all the strategic tasks related to it are taken care of under the Top Level and the Configuration Level of the SCOR Model. Whereas the Process Element level and the Implementation Level take care and bring into attention all the different processes of supply chain .
All the interactions of the customers starting form orders to the payments are being contained in the SCOR Model along with the all physical material flows and the corresponding information flows .
Integration of Supply Chain
Integration has been defined as the quality of state of collaboration which should exist between various departments of the organisation which are needed to accomplish the unity of efforts through the factors of demands of environments (Lawrence and Lorsch, 1967). There are four stages of organisational integration in supply chain organisations which are defined below:
- Stage I: Fragmented operations within a company which is fragmented.
- Stage II: Focus on limited amount of integration between the adjacent functions of organisation like material controls and purchasing etc.
- Stage III: Internal integration of end-to-end planning in company which is individual.
- Stage IV: Depicts True supply chain integration as it covers the upstream integration with suppliers and downstream integration with the customers.
The typical three dimensions of supply chain integration are (Lee, 2004):
- Information Integration
- Resource Sharing and Coordination
- Organizational Relationship linkage
Sharing information and knowledge between the supply chain members which includes production plans, promotion plans, inventory status, and sales forecasts etc is called Information Integration (Skjott-Larsen et al., 2007). Realignment of results or conclusions and supply chain responsibilities fall under Resource Sharing and Coordination. Performance measurements, sharing the same objectives and visions and effectual communication between members are included in the Organizational Relationship Linkages (Skjott-Larsen, 2007). Thus supply chain integration is a combination of organizational and information integration.
Purpose of this assignment
The phenomenal growth of Wal-Mart is being accredited to the continuous focus on the needs of their customers and effective cost-reduction which is possible all because of efficient and effectual Supply Chain Management Practices followed by Wal-Mart. Supply chains as well as Value Chains have always been part of SCM in Wal-Mart for past so many years. Logistics has effectively worked in binding all the different members of organization as glue. But in the current era of globalisation, there are new problems which are being faced by supply chains system if Wal-Mart, or any other organization.
The problems and issues like politics and terrorism etc. have been surfacing now and then and through this report we will try to find out how all these issues or problems can be tackled through effectual Strategic Management .By creating new and refined Logistics, Supply chains and Supply Chain Management systems which can be brought to a new maturity level, these issues related to supply chains can be handled. Application of new technologies in Wal-Mart and SCROR Model will definitely help in bringing supply chain at Wal-Mart to a new and higher level of performance. Right way of applying the SCOR Model Methodology will help in capitalizing and minimising the total supply chain inventory at the Wal-Mart. This will help in reducing the supply chain inventory in the Order Fulfilment Value Stream, which will automatically raise the service level provided to the final customer by Wal-Mart.
With the help of SCOR Model a strategic plan can be drafted which will help in minimising the total supply chain inventory in the organization by applying it to the Order Fulfilment Value Stream of Wal-Mart.
2.0 COMPANY BACKGROUND
2.1 Background Information of company
Wal-Mart has been ranked the world’s largest retail company and ranked at the top amongst all the retail companies in the year 2002 as can be seen from Appendix 1. The founder of Wal-Mart Sam Walton was born in 1918 at Kingfisher, Oklahoma in U.S. After displaying good qualities of a salesman in his first job at J C Penny, he realised the importance of developing customer loyalty and close relationship with the employees. In mid-1940’s he gave up his job and decided to set up a retail store owned by him and purchased a store franchise from Ben Franklin located in Arkansas, Newport. From here he learnt his first lessons of retailing that is giving significant discounts on several products in order to increase the profits and to expand the volumes of products sold.
By 1969, Walton had expanded the Wal-Mart stores to 18 with an annual sales reported to be $44millions. IN 1980’s the store kept on growing multi-folds due to huge customer demands in small towns where the Wal-Mart stories were located in abundance. Most of the Wal-Mart stores were located in huge warehouse-type structured buildings which were situated at very convenient and approachable place. Walton’s aim was to target all the customers who buy merchandise in bulk. That is why by 1984, the number of wall-Mart stores expanded to 640 in U.S. with a sales of around $4.5 billion and accruing profits of more than $200 millions. By the year 2000 Wal-Mart became the largest company in terms of revenue and the credit for this phenomenal growth goes to incessant focus on the customer needs and cost reduction of the products due to efficient and effectual supply chain management system and best practices followed at Wal-Mart.
The huge range of products offered by Wal-Mart in shortest possible time and that too at the lowest cost was possible because of only two reasons:
- Highly automated Distribution Centres of Wal-Mart which helped in reducing the shipping time as well as the costs.
- Computerised Inventory System at Wal-Mart which helped in quickening the check-out time of inventory and faster recording of the transactions too.
2.2 Main products and Consumer
The total range of products offered by Wal-Mart is huge and has been categorised in to various sections as listed below (WALMART, 2012):
- Electronics & Offices
- Movies, Music and Books
- Auto & Home Improvement
- Home , Furniture & Patio
- Photo
- Apparel , Shoes & jewellery
- Gifts, Craft and Party Supplies
- Baby & Kids
- Toys & video games
- Pharmacy , Health & Beauty
- Sports, Fitness & Outdoors
- Grocery & pets
Under all these products categories Wal-Mart has to offer Store Brands/ Generic Brands/ House Brands which are simple low cost alternatives for famous brands. However Wal-Mart does have private labels too of various companies too. Some of the major brand products which are offered by Wal-Mart are (List of Walmart Brands, 2012):
- Great Value
- Mainstays
- Special Kitty
- White Stag
- Dr. Thunder
- Sam’s Choice
- Equate
- Ol’ Roy
- Parent’s Choice
- George
The core-customer base of Wal-Mart is the low income households, who want to spend every cent in buying the product with value and this is what Wal-Mart has to offer. Wal-Mart has been revolutionising the lives’ of its consumers in small towns and lower income groups by providing them quality and efficient products at low prices (Wiederman, 2012). This is how it has been successful in aerating a flourishing retail empire not just in U.S. but all across the globe. But recently the consumers of Wal-Mart’s products have shifted their buying pattern to various other retailers and Amazon is one such competitor which is taking away many customers of Wal-Mart (Wiederman, 2012). Moreover the biggest competitor which is eating away Wal-Mart’s share is Costco which is a member-only warehouse chain and is targeting Wal-Mart’s customers.
2.3 Current Situation
Technology is something inevitable in this era and this is the strategy which runs in Wal-Mart too. The above given description of Wal-Mart and its ever expanding business shows that how much diversified Wal-Mart is and the massive volumes of cargo it might be handling every minute to run its business smoothly is something beyond imagination without technology. Traditionally Wal-Mart adopted technology by simply computerising its stores individually and small machines were installed in every store for computerised billing. This helped in centralised billing system development for Wal-Mart and for maintaining billing database too. But now with the business growing enormously Wal-Mart need smart technology to maintain the huge databases related to records and information (Angrish et al., 2005).
Technology has been traditionally helping in billing and storage systems at Wal-Mart for quite some time, but now the need is to apply technology in the areas of logistics and inventory management or SCM to reduce the expenses incurred by Wal-Mart (Angrish et al., 2005). The gigantic empire of Wal-Mart needs to keep track of not just men but also the materials all across the stores worldwide along with maintain the warehouses in different countries in the world, so bar-code was chosen as the effectual technology to help in SCM and logistics.
Currently Wal-Mart has been leading the industry with Radio Frequency Identification Tags (RFID) implementation amongst all the suppliers on all the products supplied to the company. Moreover a step ahead Wal-Mart has created a software system which links the Wal-Mart distribution centres with Procter & Gamble. This system monitor the lower levels of product supply in the store and then automatic alerts are sent to the supplier for the shipment. This SCM software is being implemented in every store of Wal-Mart. The real-time monitoring of the shelves through satellite links which scans the P&G products sends inventory messages and it makes SCM more efficient.
3.0 OVERVIEW OF SUPPLY CHAIN OPERATIONS REFERENCE SCOR MODEL
The leadership status which Wal-Mart enjoys in the retail industry is all because of its effectual SCM practices which it does in best manner. Wal-Mart also practices the most popular method for integrating the supply chains and measuring the adding partners performance by applying the Supply Chain Operations Reference (SCOR) Model which was developed in 1996 (Wisner, 2011). The whole SCOR Model can be seen from the figure attached in appendix 3.
3.1 SCOR Model Level 1
The Top Level of SCOR Model defines the content and the extent of supply chain and therefore the fundamental segmentation of supply chain is being done. Supply chain strategies are also formulated in this stage by specifying the four core processes or Meta processes which are (Overbeck, 2009) :
- Plan
- Source
- Make
- Deliver
Figure 1: Bundles of Activities in Top Level of SCOR Model
3.2 SCOR Model Level2
The second level is the Configuration level which is being divided into 17 standard processes which represent the whole supply chain. The processes are divided into three types: (Overbeck, 2009)
- Planning (Activities are defined which help in matching supply and demand)
- Execution ( helps in transformation of activities which are categorised during planning)
- Infrastructure ( involves activities which help in generating the needed resources for planning and execution)
The main aim of configuration level is to search for specific solutions for problems and organizations can do evaluation by matching configuration with supply chain. It is beneficial in representing the supply chain with just few resources.
3.3 SCOR Model Level3
The Process Element level is the one where the bundles of activities are further divided into smaller elements of process. The input-output relation for each process element is found. Benchmarks are set for every element so that any backlog when comapr4ed to best practices could be identified (Overbeck, 2009). Performance measures are determined for e.g. capital lockup, freight charges or cycle times etc.
3.4 SCOR Model Level 4
The last level is the Implementation Level where the process elements are further divided into smaller tasks which are again divided into activities. This level does not have general references, as it cannot be examined separately without consulting the other branches. That is why the Supply chain Council does not related Implementation level directly to the SCOR Model (Overbeck, 2009)
4.0 APPLICATIPON OF SCOR MODEL METHODOLOGY
The SCOR Model is based on very vital factors which are:
- Process Modelling
- Performance Measurement
- Best Practices Implementation
It is on these three pillars the whole SCOR Model rests and according to the supply chain management approaches the Rough Cut Methods are the best for the development of inventory control policies and carrying several echelons together. That is why the Multi-echelon Theory is very successful in the logistics and supply management (Harrison and Ganeshan, 1995). The three steps to applying SCOR model for supply chain performance and improvement are described as follows:
4.1 Process Modelling
The Process Modelling Pillar is the pillar which helps in easing out the main building blocks of any business which are very complex like the business processes and their functionalities. The business model of SCOR contains five major business processes that are: Plan, Source, make, Deliver and Return. The process modelling standardises every process. It deals with important business related factor that is customer interaction and all the products and transactions related to them (Inc., 2007).
4.2 Performance Measurement
The performance Measurements Pillars act as the main feeders which deliver information after evaluation and give the feedback in the end. This pillar deals with lot of data which sib useful in assessing the business model adopted. The data is being disintegrated and various performance metrics are used to measure them at different levels in SCM. These metrics can only be used in the Performance Measurement Model (Inc., 2007).
4.3 Best Practice Implementation
The Best Practice Pillar is the important pillar as it helps in analysing the gaps after evaluating and understanding the performance of different processes. After finding the gaps in the performance the fillers are found which can bring 100% success and this is done by Best Practice Sharing. It has all the accumulated information regarding what works best with particular business and it is applicable to all the businesses and not just a particular business (Inc., 2007).
5.0 APPLICATION OF NEW TECHNOLOGIES
5.1 Bar Coding & Scanning
The Wal-Mart’s strategy has always been to catch-up the point-of-sale system which helps in identification of every system sold and carets the right receipt of sales for customer. This helps in storing sales information item-by-item which can be used in analysing the recording of inventory or sales. This helps in avoiding overstocking by Wal-Mart. The technical basis of point-of-sale is bar code scanner (Wal-Mart: attaining competitive advantage from information technology, 1999). The bar code scanner scans the bar code on every item during sale and the data is stored at the back end. This helps in knowing which item is selling well and which one needs reordering, thus better or lesser inventory cost. It also allows automatic reordering and coordination with the suppliers (Koselka, 1992).
5.2 Radio Frequency Identification (RFID) (Moorman, 2005)
The very useful RFID technology was implemented in Wal-Mart in June, 2003, so it brought more efficiency in supply chain using RFID because the core of success of the retail chain store is supply chain implementation. The RFID technology was being tapped by Wal-Mart to improve the efficiency and transparency of the supply chain system. The implementation of RFID has helped in finding that there are 10 items left on the shelf, their age, expiration date, lot number and warehouse origin too. In an article it is mentioned that implementation of RFID at Wal-Mart in the inventory has increased the sales as now the shelves are stocked in better manner. The out-of-stock merchandise at the stores have reduced by 16% because the RFID tagged items can be stocked three times faster than the non-RFID tagged items on the shelves (Angrish et al., 2005).
5.3 Radio Frequency Tags (RFT’s)
Wal-Mart has taken a step ahead by rolling out the sophisticated electronic Radio Frequency tags (RFT’s) in order to track every individual item sold at the store which will be helpful in controlling the inventory in better manner. These RFT’s or ‘smart tags’ can be read by hand-held scanner, thus the worker at the store will be able to find very quickly that amongst the pair of Wrangler jeans the medium size is missing without, this will ensure that the shelves are stocked all the time and the inventory will be more closely watched at the same time (Bustillo, 2010)
5.4 Electronic Data Interchange (EDI)
Wal-Mart started sharing their sales data with the suppliers using EDI, so that the supplier knows whets selling at the stores. Using the Point-of-sales information gathered at Wal-Mart store the supplier gets to know the sales trend and is able to recommend Wal-Mart that which orders should be placed. EDI helps in conducting the business in most effective and efficient manner as the critical business information is exchanged between two organizations like the purchase orders, shipping information, sales forecast information, item information, invoices etc. This way Wal-Mart can enhance its customer services, increase the productivity and lower the expenses at the same time (Wal-Mart’s Focus on EDI, 2005)
5.5 Electronic Commerce (e-commerce)
The world leader in retailing followed just the ‘brick and mortar’ models for its stores and supermarkets has now ventured into the e-commerce sector too by consolidating its e-commerce activities around the globe through its Global ecommerce division in 2010 . But by then many loyal customers of Wal-Mart shifted to the online retailer Amazon.com because of the big discounts offered by them at the comfort of their home (Welch, 2012). Now Wal-Mart has started offering ecommerce sales using dedicated online platforms across eh seven countries and the most significant platform is the walmart.com for the U.S. customers (Investing in global eCommerce to reach more customers, 2011).
5.6 Internet
Investment in the online business has been phenomenally increased by Wal-Mart to handle the competitors like Amazon.com and many more. It is also trying to develop a program which will allow its loyal customers to purchase without credit cards or bank accounts. They are developing an app for their new customers who can compare the price by scanning the bar code on the items and after comparing the prices they can make the best deal by buying it from Wal-Mart as they offer lowest prices. The tech team is also developing a program called ‘ Endless Aisle’ which would allow the comfort driven shoppers to immediately order any item on Walmart.com using Smartphone just in case the item is out of stock (Welch, 2012).
5.7 Enterprise Resource Planning (ERP)
Vendor managed Inventory is a mutually beneficial relationship where both the organizations are able to control the supply and availability of goods in more accurate and smooth manner (Frahm, 2003). That is why in 1987 P&G and Wal-Mart started the Continuous Replenishment program (CRP). Using this program P&G monitors the inventory of Wal-Mart both physically as well as electronically through ERP implementation. This CRP between P&G and Wal-Mart is the best managed ERP program which is also called the Vendor –Managed Inventory Program. This ERP installation was a kind of win-win situation for both P&G as well as Wal-Mart because it helped Wal-Mart in finding the items which were getting sold very fast from the stores, and it can now monitor its stock levels regularly in the stores. P&G got benefitted as a result of better coordination it could lower the costs of the products and pass on those cost savings to Wal-Mart (Chandran, 2003).
6.0 CONCLUSIONS
Wal-Mart had a strong belief in its employees, customers and suppliers which made it the best retailer in the industry. All the cost saving opportunities were utilised by the company and the benefits were simultaneously passed onto the customers. But although it has implemented the best strategies for logistics and supply chain management there are still few areas which need to be handled by them they are:
- There is no single Global RFID standard which the multinational like Wal-Mart will have to handle.
- Technological problems with RFID tags exist like signal distortion. Tag transmission capabilities and reader speed and accuracy problems which create technical limitations.
- Damaged and defective RFID tags have been supplied many a times.
- Using RFID or RFT’s results in huge data accumulation and managing this huge database is another concern for the organisation.
- Being late entrant in e-commerce has made it lose some share of customers and online competitors like Amazon.com, eBay .com etc have taken their market share.
7.0RECOMMENDATIONS
- Wal-Mart can tackle the issue of multiple global RFOID standards by implementing varied RFID technologies and standards all across their organisations globally.
- The limited information on the tags like just the serial number is listed. But this number can reveal a lot of information from the internet connected databases.
- The best alternative which Wal-Mart can find for RFID tags are the RFT’s which are much better and much efficient too.
- Wal-Mart has effectual Information Management System which handles all the huge data collection as well as technical problems also arising.
- It has taken over the competitors by launching e-commerce website and developing a program where the 20% customers who do not have credit cards or bank accounts can also shop with Wal-Mart.
- It has also developed apps which can be used on Smartphone’s by the customers to place the order and the latest program ‘Endless Aisle’ will allow them to even place order for out-of-stock items using this app of Wal-Mart.
8.0 REFERENCES
Bibliography
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