Supply Chain Management at Wal-Mart

1. As James Neuhausen, what is your analysis of Wal-Mart’s supply chain? Are the company’s supply chain capabilities still a source of competitive advantage? Why or why not?
2. How is Wal-Mart doing? How does it compare to its competitors?

Solution

Supply Chain Management at Wal-Mart

1. Are Wal-Mart supply chain capabilities still a source of competitive advantage?

Wal-Mart has been a pioneer in supply chain efficiency for decades, resulting in its widespread growth. However, its stock performance has slowed in the past 10 years, causing investors to reconsider their investments. Recent focus on improvement shows that Wal-Mart needs to enhance its supply chain to sustain its leading position.

2. How does profitability of Wal-Mart compare with that of its competitors?   

Wal-Mart’s profitability compared to its competitors is affected by several factors, including market share erosion due to competitors copying its models, the success of online competitors like Amazon, and the popularity of smaller stores. Additionally, economic challenges have led to staff reductions and decreased supply chain efficiency, making Wal-Mart’s supply chain capabilities less of a competitive advantage (Selko, 2007).

However, Wal-Mart is still ahead of its competitors and has the potential to improve its profitability. By investing more in online sales, Wal-Mart can remain competitive and continue to be a leader in supply chain abilities. Overall, while Wal-Mart’s profitability may have been impacted by these challenges, it still holds a favorable position compared to its peers.

3. If you were Wal-Mart’s executive vice president of logistics, where would you spend money or focus your energy?

As the executive vice president of logistics at Wal-Mart, I would focus my resources on the logistics workforce. The current logistics model is non-unionized and has limited worker interaction, which can become a problem as Wal-Mart expands into unionized areas and becomes a target for politicians. Public opinion can negatively impact the efficiency of the supply chain and unionized workers may resist technological changes, leading to stagnation or decreased efficiency. Management decisions may also be slowed down by the need for consultation with the union.

To address these challenges, I would revise the terms of employment for logistics workers by offering short-term contracts and prioritizing these workers in the hiring of new employees when contracts expire. This would reduce worker commitment to forming unions, but may result in higher employee turnover rates. By focusing on the logistics workforce, I aim to maintain the efficiency and competitiveness of Wal-Mart’s supply chain.

4.  Where do you see the improvement opportunities for Wal-Mart in its global supply chain?

I believe there are significant opportunities for improvement in the company’s global supply chain. Despite recent challenges and a plateau in stock prices, Wal-Mart still has the capability to maintain its dominant position in the supply chain industry. One potential area for improvement is expanding into new markets, especially in developing nations with growing middle-class populations. This not only allows for capturing new consumers, but also provides a source of capital that can be reinvested in online retail to regain market share in the American market. It is important for Wal-Mart to continually innovate and stay ahead of its competitors in the ever-evolving global retail market.

REFERENCES

Selko, A. (2007, April 26), Can Your Company Compete Against Wal-Mart? . Retrieved from http://www.industryweek.com/companies-amp-executives/can-your-company-compete-against-wal-mart

A logistician turned CEO: interview with Lee Scott – DC Velocity. (2014, February 19). Retrieved from http://www.dcvelocity.com/articles/20140219-a-logistician-turned-ceo-interview-with-lee-scott/

Wal-Mart Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies. (2012, March 9). Retrieved from https://www.thecasesolutions.com/wal-mart-3-25881

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