SM C101 Chapter 1 Page 29 Internet Questions
1. Visit the websites of companies like Wal-Mart, Dell and Home Depot, and see if you can find discussions of their supply chain management activities. List information you can find on purchasing/supplier issues, logistics, information systems, quality and customer service. Purchasing/supplier issues: Wal-Mart always emphasized the need to reduce its purchasing costs and offer the best price to its customers. The company procured goods directly from manufacturers, bypassing all intermediaries. Wal-Mart was a tough negotiator on prices and finalized a purchase deal only when it was fully confident that the products being bought were not available elsewhere at a lower price. Wal-Mart spent a significant amount of time meeting vendors and understanding their cost structure. By making the process transparent, the retailer could be certain that the manufacturers were doing their best to cut down costs. Once satisfied, Wal-Mart believed in establishing a long-term relationship with the vendor. In its attempt to drive hard bargains, Wal-Mart did not even spare big manufacturers like Procter & Gamble. However, the company, generally, preferred local and regional vendors and suppliers. Logistics: An important feature of Wal-Mart’s logistics infrastructure was its fast and responsive transportation system. Wal-Mart maintained a strict vigil over its drivers by keeping a record of their activities through the “Private Fleet Driver Handbook”. The purpose of the book was to educate the drivers with regard to the code of conduct. Non-compliance to the hand book would result in the termination of the driver. To make its distribution process more efficient, Wal-Mart also made use of a logistics technique known as ‘cross docking’. In this system, the finished goods were directly supplied to the customers. The system reduced the handling and storage of finished goods, virtually eliminating the role of the distribution centers and stores. Information Systems: Wal-Mart invested heavily in IT and communications systems to effectively track sales and merchandise inventories in stores across the country. With the rapid expansion of Wal-Mart stores in the US, it was essential to have a good communication system. Wal-Mart set up its own satellite communication system in 1983. They were able to reduce unproductive inventory by allowing stores to manage their own stocks, reducing pack sizes across many product categories, and timely price markdowns. Instead of cutting inventory across the board, Wal-Mart made full use of its IT capabilities to make more inventories available in the case of items that customers wanted most, while reducing the overall inventory levels. The order management and store replenishment of goods were entirely executed with the help of computers through the Point-of –Sales (POS) system. Through this system it was possible to monitor and track the sales and merchandise stock levels on the store shelves. Quality and Customer Service: When Sam Walton started Wal-Mart in 1962, he felt that each Wal-Mart needed to reflect the vision of the community and the values of each customer. This way of doing business became the Wal-Mart organizational culture. Organizational culture is what a company values and this value reflects on how companies conduct their business. According to Time magazine's website, Sam Walton believed that if you work toward excellence and show passion with your work, you will gain a loyal customer base. Wal-Mart trains employees on how to problem solve and develops each employee to focus on pleasing the customer. The slogan of "satisfaction guaranteed" is something that Wal-Mart says it takes seriously. Wal-Mart says it trains employees to ask customers if they need assistance or tutorials on how a particular product functions. Another function of Wal-Mart customer strategies is having greeters at the door of every store. Wal-Mart management feel that if...
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