CASE STUDY ANALYSIS - WAL-MART

Case Study Analysis - Walmart

Case Study Analysis - Wal-Mart

Introduction

Wal-Mart has been able to build a total of forty three distribution centers nationwide. These include nine grocery distribution centers and two import distribution centers. The vast number of items and the need to frequently order perishable items at its stores makes it necessary to have its distribution operations highly automated. Wal-Mart uses computers to directly link to all its venders for faster delivery time (Walt, 2009).They also have their own company owned trucks and trailers that enable them to have goods delivered to any of its stores within thirty eight to forty hours after orders are placed. One of the ways that Wal-Mart has successfully been able to cut costs is to have these trucks pick up goods from nearby manufactures on their way back to the distribution centers. This is one of the trends that many trucking companies have found to save on costs.

Suppliers and Operations

One of Wal-Mart's suppliers includes McLane, the nation's largest distributor of food and merchandise to convenience stores. They sell merchandise to Wal-Mart as a wholesale distributor. They offer a wide variety of grocery and non grocery products (McClenahen, 2009).

Operations at Wal-Mart are built on the premise that they can offer every day low prices. This has been the main competitive area that Wal-Mart has been able to have success where many retailers usually find difficult to execute. Wal-Mart has been able to build consumer trust by delivering the promise of low price day in and day out (Lindeman, 2008). They have built success into their business strategy by driving down costs in all aspects of their business. This all encompassing goal as the low cost provider in the market has many operational advantages comes from more accurate data forecasting due to POS data sharing with their suppliers. This ultimately helps to develop inventory efficiencies throughout the supply chain between Wal-Mart and their suppliers.

Internal & External Analysis of the Organization

Wal-Mart's development of its retail link expands on the productivity loop that has proven to be highly successful. They are working with global suppliers to implement their retail link systems that they hope to completely implement in the near future. One of the successful stories behind the retail link is the introduction of pampers disposable diapers. Wal-Mart turned an item that had a turnover rate of 25 times per year to 125 times per year. This success translated into dramatically lower inventory productivity costs for Wal-Mart and its suppliers (Walt, 2009). The retail link works because it is built on just in time concepts and methods that have enabled Wal-Mart to work directly with its suppliers. Key to the retail link is working directly with suppliers. Success in inventory control has helped to further increase the gap between Wal-Mart and its competitors.

Saving on advertising another cost advantage of every day low prices is that it does not depend on the kind of advertising that most retailers find hard to ...