The Differentiation strategy is defined as offering a product or service that is perceived as unique in the marketplace. Overall Cost Leadership is defined as offering the same or better quality product or service at a price that is less than what any of the competition is able to do. In achieving this goal it relies on a Supply Chain Management, that ensures products are available to the customers when they it. Services would be that they offer home goods, beauty supplies and seasonal items.
A collection of resources and commentary providing an introduction to supply chain management and related systems for students, practitioners, and anyone else interested in learning more about how to design, manufacture, transport, store, deliver, and manage products.
They saved billions of dollars by consolidating their global procurement functions and reducing the use of intermediaries in their sourcing process.
Also the mode of operation was highly decentralized across all the 15 countries where it has its stores.
Also he planned to make the global sourcing process more centralized. The elimination of the markup introduced by the middlemen, helped reduce the cost leading to billions of dollars of savings for Walmart. To start with, this strategy was implemented for merchandising.
They centralized the process by setting up four global merchandising centers for general goods and clothing. Following this they started purchasing fruits and vegetables on a global scale and eliminated the import companies and the agents.
Asda had expertise in direct sourcing and Walmart leveraged this expertise across the globe. This strategy of direct sourcing not only helped Walmart reduce the cost, but also helped in other supply chain activities by improving the efficiency throughout the process.
They could now better manage and consolidate the incoming shipments and also gained a better visibility through the entire product lifecycle. Some of the sourcing strategies that worked for Walmart: Strategic Vendor Partnerships Walmart selected the suppliers, who could meet the demand and at the same time offer them the best price for the goods.
They then developed strategic relationships with these vendors, by offering them long term and high volume purchases in exchange for lowest possible prices. Furthermore, Walmart constructed communication and relationship networks with their suppliers to improve the material flow.
Collaboration was the key to their success. It transfers products directly from inbound trucks to outbound trucks. This saves the storage costs. This process of cross docking lowers the inventory transportation costs and eliminates inefficiencies.
This results in savings for the company which are then passed on to the customers in the form of competitive prices. Technology Walmart embraced technology to track its inventory and restock the shelves. It helps them accurately forecast demand, track inventory and manage customer relationships and service response logistics.
They were the first ones to implement the bar codes through which store level information was collected and analyzed easily. As seen above, Walmart has proved to be a leader in strategizing its global sourcing. But the question that arises over here is, does centralizing the procurement process globally, help indeed or does it introduce hidden overheads in the process as a whole?Walmart’s supply chain management strategy has provided the company with several sustainable competitive advantages, including lower product costs, reduced inventory carrying costs, improved in-store variety and selection, .
By Matt Smith, Walmart Corporate Affairs Having the products and services you want, when you want them is a key part of any shopping experience.
What are the 6 Core Purchasing Strategies? - How to use these procurement strategies to minimize costs and maximize quality? Walmart Brings Its eProcurement Strategy Back Home. By that enables small stores to do their procurement through last week that Wal-Mart Stores Inc.
is partnering with Thomas Publishing to. Free 2-day shipping. Buy The Procurement Game Plan: Winning Strategies and Techniques for Supply Management Professionals at timberdesignmag.com It provides an easy to follow game plan and strategies for procurement and supply management professionals to improve supplier relationships, secure measurable cost reductions, achieve operational effectiveness and efficiency, and positively impact margins and competitiveness for their organizations.