Critical Analysis of the Practice in Global Supply Chain Management at a Retailer- Case Study on Wal-Mart
Supply chain management could be viewed as that process that involves managing the goods and services’ movement from the suppliers to buyers. The processes and internal practices of a firm are optimized through interaction with suppliers and customers at the same time so as to bring forward products and services to the market in a more efficient and effective manner (Webster, 2008). When these practices are done on the international scale, such constitutes the global supply chain management. Various supply chain management practices do exist and include forecasting demand, sourcing as well as procurement, inventory management together with management of warehouses, management of logistics that involve distribution, and a host of other disciplines which in most cases are interlinked with technology and best quality practices. For firms to optimally realize the goals of efficacy and effectiveness, the supply chain management system has to be linked to an enterprise resource planning database so that the various units could cooperate (Bowersox, et al., 2010). Thus, systemization as well as optimization related to operational and strategic information together with methods within various enterprises and between one enterprise and another are required. Value addition is stressed at every point of the supply chain ranging from the suppliers to the customers considering both upstream and downstream links.
The retail industry has been in the forefront when it comes to adoption and application of the supply chain management concepts and models. One major concept seen in these practices is that of aligning the initiatives of supply chain with the overall strategy of business that an enterprise is pursuing. In his argument, Porter (1996) does differentiate between what is operational effectiveness and the business strategy and notes that the trends in recent business practices have more or less focused on the improvement of operational effectiveness, which he further alludes that encompasses performing of similar sets of activities better than what the competitors are doing. Other scholars have chosen to look at this process of performing similar activities with differentiated methodologies as being operational innovation (Webster, 2008). Global supply chain management has been coiled to reflect a significant change in the manner in which organizations conduct international business. The basic argument posed by those fronting supply chain management practices is that the central goal of an organization should be to meet the needs demanded by the final consumer through the supply of right products and services at the right place, price, as well as time (Faisal, et al., 2006).
This essay takes a critical look at supply chain management practices at a retailer and uses Wal-Mart as the case study. This is because the retail industry has been among the successful appliers of supply chain management concepts and Wal-Mart has used it strategically in gaining competitive edge against its competitors in the retail store business. It is also widely shown that cooperation among firms is encouraged and supply chains compete rather than firms competing individually. There is a win-win outcome among firms within a given supply chain.
The key components needed for a supply chain to be excellent are multifaceted. A company needs to focus and also fit the activities which would differentiate it from its competitors. In supply chain management, opportunities that encourage innovation should be exploited and improved (Webster, 2008). Supply chain management exhibits four dimensions which are distribution and selling, inventory control, information technology, and building partner relationships with reliable enterprises. The channels for distribution and selling are required to compress the time of operation as much as possible so as to meet the demands of customers and distributors who require prompt delivery (Bowersox, et al., 2010). The optimal distribution and selling leads to reduced costs of artificial connection and also cut down on the time taken to deliver information and product (Hull, 2005). Inventory control demands that supply chains be able to manage products that are in stock and also shorten the process by order, production process, delivery, as well as collection of these goods. The inventory needs to operate in a coordination manner with the movements in demand so that the turnover rate in stock could be increased and the costs which are associated with wastage or excessive stocks or even short supply should be eliminated in that course. This requires flexible control mechanisms and feedback system that is able to guarantee coordination of the supply and demand relationships as well as be in a position to regulate the process of production through optimal capacity utilization (Agarwal, et al., 2007; Mistry, 2005; Pandey & Garg, 2009).