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The Impact Of Supply Chain In Businesses And Consumers

1252 words - 6 pages

Supply Chain
Organizations of all types are in business to provide products and services to consumers. The process in which this takes places is not as simple as some may believe. From obtaining materials to stocking products on shelves many details need to be covered. A supply chain assists organizations in coordinating the activities needed to ensure a successful sale or service. To better understand what a supply chain is and how it impacts businesses and consumers one must be able to define, establish, and maintain the process of a supply chain. This paper will uncover the meaning of a supply chain and evaluate a well-known business’s supply chain and its impact on the different ...view middle of the document...

• The Information flow includes order information and delivery status.
• The Financial flow includes payment schedules, credit terms, and additional arrangements.
Many major organizations rely on a structured, organized supply chain with a strategy designed to meet consumer needs and increase profits or return on investments (ROI). Wal-Mart is the largest retail organization in the world, which did not happen by luck but rather through a well-structured supply chain that allowed the organization to balance and take advantage of supply and demand.


During the financial year 2001-02, Wal-Mart was ranked first in the global Fortune 500 list with revenues of $219.81 billion (Chandran, 2003). Wal-Mart’s competitors at the time consisted of Sears Roebuck, K-Mart, JC Penney, and Nordstrom, which none of them could truly compete with the range of products, prices, and services offered by Wal-Mart. The company’s founder Sam Walton was driven to improve sales, reduce costs, and establish efficient distribution, logistics management systems, and information technology (IT) tools. As stated by Captain Vernon L Beatty, aide-de-camp to the commander, Defense Supply Center, Columbus, Ohio (Chandran, 2003), “Supply chain management is moving the right items to the right customer at the right time by the most efficient means. No one does that better than Wal-Mart.” However, the organization did not become a success overnight. Since 1969 the renowned retail store has paved the way by making bolding decisions unlike that of its competitors. The business offered low process, customer satisfaction guaranteed, and hours to fit customer needs.
Wal-Mart is a one-stop shop for many customers offering products from groceries, electronics, clothing, jewelry, furniture, and pharmacy and automotive services. In the 1990s Wal-Mart became a global company with locations in Canada, Mexico, Germany, Brazil, and Korea.

Supply Chain Process

The organization’s main focus was on reducing its purchasing costs so lower costs could be offered to customers. Wal-Mart procured goods directly from manufacturers without using any intermediaries. In order to increase their success in negotiating prices, Wal-Mart spent a large amount of time meeting and talking with vendors to better understand their cost structure. If the vendor was able to meet the expectations of the business, Wal-Mart began establishing a long-term relationship with them based on a high level of trust. Typically, Wal-Mart preferred to do business with local and regional vendors and suppliers, as they were more eager to negotiate deals and transportation of goods was less costly.

Upon purchasing products from vendors the items needed to be stored and ready for stocking and shipping. According to Chandran (2003), “In 1998, Wal-Mart had over 40 distribution centers located at different...

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