Supply chain comprises of people, resources, activities, and organizations involved in moving a product or service from the supplier to the customer. The management of a business strategically places the supply chain elements of the supply chain to effectively transform raw materials, natural resources, and components into ready-to-consume products (Lebreton, 2007). The supply chain for Wal-Mart Stores is successful, although the company faces some challenges among the elements of the chain. The decisions of the supply chain are crucial in securing Wal-Mart’s competitive advantage.
Agility is the mainstay for Wal-Mart Inc. The company has the ability to rapidly respond to dramatic changes in the supply demand. The company achieves agility with buffers such as excess capacity, proper management information systems, and inventory to allow for an effective supply chain that is more responsive to customers. Wal-Mart depends on manufacturers’ supplies; hence, sometimes inefficiencies in the producer sections have adverse effects on the company (Fishman, 2006). Wal-Mart portrays adaptability strategies in the supply chain through its willingness and capacity to reshape the supply chains when need arises. The main requirement of adaptability is that the business should create a single supply for a customer in order to minimize costs. Adaptability, however, is not always a solution to value chain since different customers may require different products with differing urgency (Lebreton, 2007). Additionally, some elements of the supply chain are not be adaptable, thus supply chain issues span to Wal-Mart. The third strategy of Wal-Mart’s supply chain is alignment, which refers to creating consistency in the interests of the supply chain elements. Wal-Mart achieves this by carefully maintaining a collaborative forecasting with suppliers and customers (Fishman, 2006). The company also writes incentives into contracts in order to maintain its alignment strategy. Sometimes Wal-Mart finds it impossible to remain consistency due to lack of the spirit of collaboration among the supply chain elements.
The supply chain decisions are vital in maintaining Wal-Mart’s competitive advantage (Fishman, 2006). Wal-Mart announced that it would require its suppliers to do an evaluation of the full environmental costs of their products and disclose the findings in a formal report. The Green Business Champions supported this initiative. The media coverage of this decision has enhanced the company’s public image.
Wal-Mart has adopted agility, adaptability and alignment strategies in its supply chain. These strategies have enhanced the company’s competitive advantage. Factors contributing to failure of the company’s supply chain strategies include inefficiencies with the producers, customers having varying demands in different times and possibility of lack of collaboration among the supply chain elements.
References
Whewell, R. (2010). Supply chain in the pharmaceutical industry: Strategic influences and supply chain responses. Farnham, Lnd: Gower.
Fishman, C. (2006). The Wal-Mart effect: How the world's most powerful company really works and how it's transforming the American economy. New York: Penguin Press.
Lebreton, B. (2007). Strategic closed-loop supply chain management. Berlin: Springer.
