Supply Chain Management at Walmart

Transportation Economics and ERP Implementation
A Brief Summary of the Organization
Wal-Mart is an American public corporation established in 1962. The company runs a chain of warehouse stores and discount stores located across the globe. Today, Wal-Mart is the leading grocery chain internationally. The company offers a wide selection of products in their over 8000 stores worldwide (Sehgal, 2011).
The Role of Transportation Economics in Wal-Mart’s Transportation Decisions
Transportation is one of the most critical economic activities for Wal-Mart. By shifting goods from where they are sourced to locations where the demand is high, transportation is an essential logistic function that links Wal-Mart to its customers and suppliers. This activity supports the company’s economic utilities of time and place. By place, the customers must always find the goods at any given place they demand it. Time utility means that Wal-Mart must ensure that customers can access the goods whenever they need it (Sehgal, 2011).
At times, transportation can be blamed for Wal-Mart’s inability to serve its customers properly. For instance, the company occasionally experiences late deliveries, which in turn cause complaints and service problems. Moreover, the company has previously incurred product damages during transit, or the employees might load the wrong products for shipping. Normally these are referred to as over, short, or damaged (OS&D) shipments (Sehgal, 2011). They can lead to customer frustration and dissatisfaction hence influence the decision to purchase from rival companies.
However, Wal-Mart has adopted the latest technology to help perform on time with undamaged and complete deliveries. The strategy has promoted customer satisfaction and confidence besides gaining more business for the firm. By instilling confidence in service performance, Wal-Mart has successfully made customers more reluctant to succumb to competitors offers via reduced prices and clever promotions (Sehgal, 2011).
Wal-Mart’s Supply Chain Contributions to Customer Service Levels
The company’s supply chain has been instrumental in connecting customers with e-commerce orders. The company has implemented “click and connect” system and concentrates on creating more pick up spots for goods ordered on the internet (Roberts & Zahay, 2012). Moreover, the retailer guarantees convenience and choice through dynamic points of distribution like stores and home deliveries. This supply chain strategy allows customers to specify pick up time, drive to the pickup location, issue the order number and collect the goods orders. This strategy helps Wal-Mart to maintain an unrivaled customer service level in the industry. Customers become satisfied when the goods that they order meet their specifications especially in the delivery times, proper packaging, and handling. However, the efficient management of the supply chain will ensure that this is realized and the company can capitalize on the benefits associated with the strategy.
Inventory Control Practice and Uses of technology at Wal-Mart (ERP)
Wal-Mart’s inventory control is a key contributor to the company’s success. Looking at the mammoth size of Wal-Mart, efficient and effective inventory control practices is of crucial significance to the business. Wal-Mart has adopted the most recent technologies for its inventory management element. In fact, it is an example of companies enjoying the benefits of innovation and advanced technologies through optimizing inventory management performance. Though other factors have also contributed to Wal-Mart’s success, advanced inventory management rests at the heart of Wal-Mart’s leadership.
The business has achieved massive success regarding inventory management partly courtesy of their effective implementation of ERP system. The company’s decision to adopt ERP serves as evidence that their technology strategy has shifted in favor of packaged applications. The aim of implementing ERP was to support its global expansion and the need to effectively respond to changes in the regulatory and business landscape (Brady et al. 2011). The ERP solution has replaced some of the legacy systems in the retail sector while incorporating with other internal systems of Wal-Mart. Probably, this system gives the company more scalability and flexibility to its growing business.
However, critics within the retail sector contend that Wal-Mart is losing its technological edge because of its heavy reliance on homegrown solutions. The purchase of packaged software solutions will enable the company to fend off competition and emphasize its industry dominance. In fact, recently, the company bought HP’s price optimization software and Neoview business intelligence tools.
Nonetheless, according to Retail Systems Research, SAP’s ERP is a good move for Wal-Mart because the solution easily handles the company’s financial needs. Moreover, besides being easy to integrate the system with other existing internal systems, it is the right scope, and scale of what Wal-Mart is doing (Brady et al. 2011). Therefore, using technology to drive profits is a clear indicator that Wal-Mart has found its way to success in the highly competitive business world.
How Transportation Economics Strategy Positions Wal-Mart Maximize Shareholder Value
The rise of the shareholder value demand has made Wal-Mart implement the value-based management strategy. This strategy allows the company to generate real value with a precise focus on the shareholders. The company creates real value by not only compensating its investors for the investment costs but also providing a premium that compensates for the extra risks incurred (Roberts & Zahay, 2012). Its transportation economics entail virtually all the operations of the company. As the company investigates growth opportunities, the transportation economics gives it the blueprint of how supply chain operations and decisions boost shareholder value and drive the financial picture. Wal-Mart achieves this increased shareholder value through attaining top-line revenue gains and achieving bottom-line operational excellence. However, tax-effective supply chain management is one factor that derails Wal-Mart from maximizing shareholder value. Economic experts point out the significance of incorporating tax planning into the company’s overall supply chain management. Reasonably, it would increase the company’s competitiveness and profitability.
Recommendations for Benchmarking in This Industry
There are many diverse options that the company can use in benchmarking its processes in the industry. For instance, by using analytics, these companies can improve their operations, improve their customer experience and earn better customer conversation rates.
Area-specific store plans. Companies operating in this industry can create area-specific store plans as per the community demographics. They must understand that customers are different and so they also have different needs and demands. As such, these companies may design various store plans and build one that works best for each location based on the demographic makeup (ethnicity, gender, and age) of that particular community.
Target marketing rewards is another benchmarking strategy, which can be used in this industry. Companies can offer rewards club for its loyal customers. Retail customers tend to look at rewards clubs as a way to earn points, receive free goodies, gain discounts and special offers (Roberts & Zahay, 2012). From the perspective of a retailer, this will be a way of collecting information. The rewards card can allow these companies to track customers’ purchasing patterns and link this to customer-specific data that was acquired when applying for the rewards club. Later, the companies can combine information from all their rewards club members to target specific segments of their rewards members with customized product offers and marketing campaigns.
Market basket analysis is also an invaluable strategy to the company (Roberts & Zahay, 2012). The companies can also use data by applying market basket analysis. When a customer makes a purchase, the retailer can track the items, which are purchased in a single order. The company can do this regardless of whether the customer is a member of the rewards club or not. Later, the company can use this information to put products near those that are frequently bought together in the stores. This will increase the sales of the secondary product because the customer will always be reminded about the product. Moreover, it will enable stores to recommend products to consumers through coupons and discounts.


References
Brady, J. A., Monk, E. F., & Wagner, B. J. (2011). Concepts in enterprise resource planning. Boston, MA: Course Technology.
Roberts, M. L., & Zahay, D. L. (2012). Internet marketing: Integrating online and offline strategies. Mason, OH: South-Western Cengage Learning.
Sehgal, V. (2011). Supply chain as a strategic asset: The key to reaching business goals. Hoboken, NJ: Wiley.