Group B- Flattener #7

Flattener # 7- Wal-Mart- Supply Chaining

by: Laura Bross and Maggie Laskowitz

One store takes part in flattening the world with innovative and precise processes that drives them to be #1 against competition. Wal-Mart has revolutionized the way products are sold by supply chaining. Supply chaining is a method of collaborating horizontally among suppliers, retailers, and customers in order to create value. Wal-Mart has grown to be the world’s largest retailer while not making a single item. Just in one year Wal-Mart had 2.3 billion general merchandise cartons go down its supply chain and into its stores around the United States (Friedman, 2007).
One huge factor in why Wal-Mart has been so successful is due to their impeccable information transmission system. “The faster you get the information from stores about what customers are buying—what products, what models, and what colors—the faster you can get that information to your manufacturer and designers and the faster they can send back down the supply chain more red sweaters and fewer yellow ones (Friedman 2007)”. By continuing to have such an up to date information system the company can more accurately disperse merchandise throughout their stores without shipping out too many of one item.
Along with an excellent information system, Wal-Mart has forced nearly every retail store to lower their prices. They were the first to purchase the merchandise directly from the manufacturer and distribute those products from their central location. Wal-Mart saves money by becoming the middleman, buying in volume, and using their own trucks to distribute all across the US. With these savings is the reason why Wal-Mart is able to sell the merchandise at such a low price.
Most people do not go to Wal-Mart as a source of fashionable attire, however they vastly affect the fashion industry by serving as an example in innovation. Technology, like PDA’s, has become crucial in the supply chain in fashion specifically. Zara is a Spanish fashion retailer that adopted the motto that it is “more profitable to incur shortages than overstock, and then to respond to shortages with lightening speed so you are offering customers exactly what they want with much less risk of leftovers (Friedman 2007).” They use technology to transmit information on sales directly to the home office that are then able to use that information to bring product from design to the sales floor in around 30 days. Their reaction time is so fast that they have the ability to transition quickly to cater to specific events, such as providing somber black clothing directly after people do not go to Wal-Mart as a source of fashionable attire, however they vastly affect the fashion industry by serving as an example in innovation. Technology, like PDA’s, has become crucial in the supply chain in fashion specifically. Zara is a Spanish fashion retailer that adopted the motto that it is “more profitable to incur shortages than overstock, and then to respond to shortages with lightening speed so you are offering customers exactly what they want with much less risk of leftovers (Friedman 2007).” They use technology to transmit information on sales directly to the home office that are then able to use that information to bring product from design to the sales floor in around 30 days. Their reaction time is so fast that they have the ability to transition quickly to cater to specific events, such as providing somber black clothing directly after September 11th. This ability and function is called postponement, which makes Zara a fierce competitor in the retailing industry.
Wal-Mart tries to use manufacturers in the US as much as possible for the benefit of localizing job opportunities and conveniences of shipping within one country. It keeps prices low for the consumer when Wal-Mart doesn’t have to tack on prices for taxes and shipping and also enables product to be distributed faster. The stock in stores is kept fresh and full for the convenience of shopper’s needs. They cater to their customer in all ways possible with efficient processes and innovative technology. Wal-Mart knows exactly what is happening in each and every store location which enables them to better cater to the individual and regional needs, squashing competitors with convenience and low prices (Friedman 2007).

Video demonstrating Wal-Mart's quick growth

http://www.youtube.com/watch?v=GI7R37rp8xY

Video on Supply Chain Concept- Its Intense!!

http://www.youtube.com/watch?v=oMVvVrg3NWE&feature=related

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