Supply chain management at Wal-Mart Essay Example | Topics and Well Written Essays - 500 words

Supply chain management at Wal-Mart - Essay Example The paper "Supply chain management at Wal-Mart" discovers supply chain management at Wal-Mart. Wal-Mart’s core strategy was to provide quality merchandise at everyday low prices which necessitated substantial cost management practices which would make the strategy sustainable. This was attained primarily through having effective innovations for purchase, distribution and retail management strategies. The purchasing strategy operated through Wal-Mart’s gradual development of an exclusive group of suppliers which partially if not wholly was devoted entirely to supplying to Wal-Mart. The central strategy in its purchasing behavior was to eradicate the middlemen from the transactions and establish direct relations with the producers. Wal-Mart’s largest suppliers began to devote entire offices to handling supplying to Wal-Mart stores in bulk. The scale economies reaped thus allowed a significant lowering of purchase prices. Additionally, through sourcing products glob ally and directly from producers, Wal-Mart was able to become the sole buyer which therefore had huge control over prices. This led to development of private label, low priced alternatives to various branded merchandise which appealed to people and contributed significantly to enhanced sales. Wal-Mart’s distribution strategy has also been one of the core areas that have contributed substantially to its competitive advantage. The location of new stores has strategically been chosen so that each distribution centre can cater to a clout of outlets.