The SCM of Wal-Mart

Wal-Mart is one the largest retailing companies in the world. Due to its proficient supply chain management practices, Wal-Mart has been recognized by analysts for its ability to achieve leadership-status. Its supply chain management is backed by the need to meet the demands of customers while reducing costs. The company's success is its ability "to offer a vast range of products at the lowest costs in the shortest possible time. It was all made possible due to Wal-Mart's highly automated distribution centers, which significantly reduced shipping cost and time, and its computerized inventory system, which speeded up the checking out time and recording of transactions (ICFAI 2004)."

Wal-Mart was able to achieve a leadership status in the retail industry because of its efficient supply chain management practices. 5 areas where Wal-Mart manages the supply chain:

Procurement & Distribution

Wal-Mart procured goods directly from manufacturers, bypassing all intermediaries. It was a tough price negotiator which will only purchased when it was fully assure that the products bought were not available elsewhere at a lower price. Wal-Mart also spent time meeting vendors and understanding their cost structure. By making the process transparent, it would know which manufacturers were doing their best to cut down costs and then it will establish long term relationship with that vendor. Besides, Wal-Mart had over 40 distribution centers at various locations in the US to ensure steady and consistent flow of products to support the supply function. To manage center easier and more economical, it used sophisticated barcode technology and hand-held computer systems to enable the packaging department to get accurate information about the products to be packed so as to save time on unnecessary paperwork. It also allowed the center supervisors to monitor