Multi-National_Supply_Chain

Capacity of the Firm to Plan and Manage Multinational Supply Chains Capacity of the Firm to Plan and Manage Multinational Supply Chains Wal-Mart has revolutionized the “supply chain game”. Their huge multi- national presence has allowed them to tie together several countries and thousands of manufacturers. Many of Wal-Mart’s products come directly from the manufactures and bypass the central warehouses and distributors. This massive spider web of supply is tied together with a fully automated inventory management system that rivals NASA in technology and a razor blade in efficiency. As an item is purchased from any Wal-Mart store, the item is automatically reordered within 14 seconds. This request is immediately sent to the central warehouse where their system notifies the manufacturers that a new one is needed to replenish the stock of either the central warehouse or the store itself. ” Even the raw material suppliers are notified that the manufacturer now needs a little more raw materials (plastic housing, switch, light bulb, etc), and so it goes – all the way up the supply chain”(ASA, n.d). 14 seconds, that means by the time I am walking past the greater and heading to my car every item in my cart, sometimes quite a few, has been reordered and will be shipped within 48 hours. Critical in the development of Wal-Mart’s supply chain development, is a company called Accenture. This firm completely restructured and redefined Wal-Mart’s supply chain policies. Gary Maxwell, Wal-Mart's Senior Vice President of Merchandise Replenishment, spear headed the project for several reasons, He feared there was no unified system that could bring it all together, he said” Leading practices were usually identified through trial and error. And the analytical proficiencies needed to make superior stocking decisions were often unavailable. Perhaps most important, optimal replenishment practices had not been established across stores and departments: Excellence in, say, housewares was no guarantee that similar levels of performance were achievable in, say, sporting goods” (Accenture, n.d). Accenture’s contributions to Wal-Mart allowed the retail giant to vastly improve on their supply chain fundamentals as well as forecasting and planning. The training program set forth revolutionized inventory management and the ability measure statistics, probabilities and performance metrics. Wal-Mart also recognizes that there is still fat to trim on their multi-national, multi-billion dollar supply chain. As pointed out by Jonathan Birchall, financial Times, “Wal-Mart is launching a drive this year to cut billions of dollars of costs from its supply chain by combining its store purchasing across national frontiers. The effort is part of plans by the world’s largest retailer to increase the proportion of goods that it buys directly from manufacturers, rather than through third-party procurement companies or suppliers” (Birchall, 2010). Hence, there is little doubt that Wal-Mart or their multi-national supply partners will be disappearing any time soon. Their strong foothold in developing nations like China and India further guarantee that they will continue to practice their seemingly limitless supply reach. Through automation, training and direct mass purchasing power, they will continue to grow stateside and abroad. References ASA. (n.d). Supply Chain. Retrieved from http://www.asaresearch.com/ecommerce/supplychain.htm Accenture. (n.d). Wal-Mart Pulls Further Ahead with Accenture Training Program. Retrieved from http://www.accenture.com/us-en/Pages/success-wal-mart-training-program.aspx Birchall, J. (2010). Walmart takes aim at supply chain cost. Retrieved from http://www.ft.com/cms/s/a9a934d4-f8cf-11de-beb8-00144feab49a,Authorised=false.html'_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Fa9a934d4-f8cf-11de-beb8-00144feab49a.html&_i_referer=http%3A%2F%2Fsearch.ft.com%2Fsearch%3FqueryText%3DWalmart%2Btakes%2Baim%2Bat%2Bsupply%2Bchain%2Bcost%26ftsearchType%3Dtype_news