World-famous trade corporations that receive huge profits every day sometimes moved to their success gradually. Some of the organizations, being today large sellers with millions of buyers, were once small companies that started their sales in small quantities. One of the examples of such growth is the Wal-Mart corporation, a global network of stores, which today ranks first in popularity and profits among trading companies. Once, this organization also represented a few small shops with quite a poor assortment. Nevertheless, over time, the founder of the corporation and his employees managed to turn Wal-Mart into the largest retailer in the United States. It was primarily due to the competent organization of the supply chain management system. Therefore, according to the experience of this company, it is possible to claim that a competent approach to the organization of this system is one of the advantageous components of business development.
Wal-Mart’s Distribution and Logistics Systems
The world-famous retailer Wal-Mart has mostly earned its popularity and recognition among consumers due to its well-thought-out logistics and distribution system. As it is known, the successful planning of purchased goods consumption and fast and timely delivery are favorable modern trade factors. Logistic principles of any organization aim at the fastest possible selling of goods purchased exactly in the volume that is needed. Along the stay of costs in warehouses can lead to the fact that some products can be damaged because of expired shelf life or other reasons like improper storage or transportation.
If it is about Wal-Mart, the system of its logistics is thought out carefully enough. For example, the company has always located its stores in places that are convenient for customers and has used spacious floor plans for its network of retail centers. If warehouses are spacious and roomy, chances that some goods will be lost and forgotten in any part of a large cluster of other products are minimal. That is why the system of supplies and distribution of products in the Wal-Mart corporation is one of the most high-quality in the world as the company carefully approaches the organization of this work.
Statistical Counting and Wholesale
Also, its managers focus on timing sales so that they are suitable for buyers. Well-thought-out strategies allow completely selling out specific products that are popular among customers and, at the same time, offer the most popular items. According to the company’s principles of work, it is possible to calculate the approximate amount of how many popular products will be bought, if the time is known when most customers come to the store, for instance, after work in the afternoon. In order to do it, Wal-Mart specialists analyze statistical data and determine which products are bought most often, and at what time of the day and on which days of the week it is best to offer these or other things.
One of the advantages that allowed Wal-Mart to take the highest position in the ranking of retail companies is its approach to wholesale goods. As practice shows, this principle has become successful enough, and if the company sells a lot of products at prices that are slightly lower than those of competitors, it will surely bring profit to the selling corporation. The policy of Sam Walton, the founder of the network of stores, was based on the fact that the best approach was to offer a wide range of products with minimal costs in the shortest possible time. The procurement of goods from manufacturers, without using the services of intermediaries, also has a positive effect on the company’s success.
Benefits of Using IT
The specialists of the corporation not only developed a thriving network of stores but also equipped it with modern means of sales control. Wal-Mart became one of the first companies to use complex barcodes and hand-held computer systems. Due to their use, all employees of the company have the opportunity to get information about the exact number of products that are available. Specialists who monitor the volume of products stored in warehouses do not need to recalculate each item manually. The possibility of using computerized systems gives a chance to know the total number of products without leaving an individual workplace. At the same time, surplus goods are not stored in warehouses too long. Analysts calculate the volume of purchased and sold products, and sellers usually know how many items they have available and can be assured of their quality.
Satellite System and POS
The company’s high-tech distribution centers provide a chance to reduce the time and cost of goods delivery and accelerate the registration of transactions, which is quite a significant advantage. Investing in IT and communication programs in order to track sales provided Wal-Mart with its satellite system. This method is relatively new and modern, and not all selling companies have similar technology in their use. Its essence lies in the fact that all the activity of consumers, including purchases in large and small stores of the Wal-Mart network, is registered in the system due to satellite tracking. All purchases of goods and the approximate delivery time of specific products to specific warehouses are also displayed via satellite navigation. Due to this innovation, it is much easier to track the degree of customers’ activity and control the distribution of goods. The company’s management can have access to all available information about where and when it is necessary to make appropriate changes.
Later, the system called POS (Point-of-Sales) appeared; it helps to monitor and control the level of sales of goods even more comfortable than before. Products on the store shelves do not stay too long, which allows regularly updating the range and offer customers new products. When buyers know that they purchase fresh and quality goods, they come to shops more readily. That is why it was so crucial for the network specialists to establish a precise system of control over the storage of purchases and their distribution among consumers. Perhaps, the combination of all these innovations in the field of IT has made it possible for Wal-Mart to achieve the highest positions in the world market and gain recognition among consumers.
Effectiveness of Supply Chain Management Processes
The managers of the Wal-Mart company hire highly reliable employees who are capable of assessing the scale of work that the retailer faces daily. The staff who works for the company understands the requirements that the leadership of the corporation makes to the organization of the entire system, starting from the purchase of goods and ending with their sale in the store. It is mainly due to this structured scheme that Wal-Mart remains the leader among other world-renowned retailers and can compete successfully even in the face of ever-changing market needs. One of the conditions of successful trading is carefully selected personnel.
Methods of Management Policy
As managers of Wal-Mart believe, all the employees should understand their tasks and competently fulfill their goals. In this case, the whole system will work cohesively, and the organization will be able to achieve significant successes. For example, only experienced drivers can transport goods from suppliers directly to the sales centers. It allows avoiding any delays and, at the same time, relieves senior managers of the need to monitor each step of their subordinates. When an employee is aware of what direct duties he or she should fulfill, the whole process of work passes quickly and productively. Moreover, the experience and high qualification of workers sometimes give them an opportunity to make essential decisions independently and grow professionally. It is especially important in conditions of high market tension when the company’s success quite often depends on the speed of the work being performed.
In order to increase the effectiveness of the management and control system, the leadership of the organization strengthened some aspects of activities, for example, traditional centralized methods of merchandising and pricing. Quite a lot of attention is paid to the needs of consumers, due to which the corporation is always ready to offer the most relevant products and react instantly to changing clients’ interests. All decisions are made at the corporate level, which makes it possible to take into account the opinions of the maximum number of people and adopt the optimal strategy. The involvement of not only senior managers but also junior staff contributes to the effective discussion of current problems and sometimes helps workers gain prestige in the eyes of colleagues. If the seller shows a high interest in the success of the company and strives to improve performance indicators by making useful decisions, Wal-Mart management always appreciates It. Well-established supply chains largely depend on the organization of the whole process, and it is often employees who act as the central regulators of this work. The system of cooperation between suppliers and stores is characterized by informal conditions, and due to the lack of strict oversight and tight control, workers have more opportunities to realize their working potential.
Advantages of Supply Chain Management Practices in a Competitive Environment
The use of an efficient supply chain management system allowed Wal-Mart to achieve some benefits and take the top spot in the ranking of the most successful retailers in today’s intensely competitive market. This position is proof of an efficient and competently thought-out leadership policy and organization of the whole process of doing business. Beginning with the foundation of the company, Wal-Mart led a successful goods trade among consumers and could timely respond to changing market needs. It allowed the company to turn from a small chain of stores into the most significant world trade corporation and become a recognized leader in this field. In particular, the successful organization of the supply chain management system has provided the basis for Wal-Mart to gain some advantages in the market.
First, the company’s specialists have managed to achieve a rapid turnover of stock in warehouses and to plan the level of their expenses precisely. This, in turn, is a guarantee that the company does not have to waste additional money on the disposal of expired goods. All products are sold on time, and consumers cannot purchase goods with expired shelf life. Secondly, the introduction of such IT technologies as barcodes and radiofrequency search made it possible to track the dynamics of goods distribution and reduce the cost of storing them. There is no need to search for goods in warehouses for a long time; it is enough just to check with the database and determine how many needed products are left and whether it is time to order new products or not. Third, the use of a computerized delivery control system relieved the management of the need for time-consuming training for sales personnel and helped to avoid mistakes in the process of planning purchases. Employees are almost never mistaken as improved tracking systems help quickly and, which is more important, correctly calculate the delivery time and the time required to sell a particular product. All of these features are the undisputed merits of the corporation.
Thus, Wal-Mart’s competent organization of the supply chain management system is a useful measure to increase the profit of the company and make the whole business process as perfect as possible. A well-thought-out logistical system and the way of distributing products give a chance to avoid goods spoilage in warehouses. The implementation of IT technologies brought some advantages and allowed speeding up delivery and goods sale. Wal-Mart’s corporate policy and attention to each employee are very successful elements in the organization of the corporation and, at the same time, helps the staff to achieve career growth and colleagues’ recognition.