Supply Chain Management and Distribution Centers Essay Example for Free

Supply Chain Management and Distribution Centers Essay1. Wal-Mart has been equal to(p) to achieve respectable leadership in the retail industry because of its focus on affix chain management. Discuss in detail the distribution and logistics ashes adopted by Wal-Mart.Ans As the worlds largest retailer with net sales of almost $219 billion for the fiscal year 2002, Wal-Mart is considered a best-in-class ships beau monde for its supply chain management practices. These practices atomic number 18 a key competitive advantage that have enabled Wal-Mart to achieve leadership in the retail industry by dint of a focus on increasing operational efficiency and on customer needs Wal-Marts corporate website calls logistics and distribution the heart of its operation, one that keeps millions of products give-up the ghost to customers every day of the year. Wal-Marts complete Supply chain is aligned to provide maximum value to its customers by Every day low prices in its Stores. Wal- Marts highly-automated distribution centers, which operate 24 hours a day and are served by Wal-Marts truck fleet, are the foundation of its growth strategy and supply network. In the United States alone, the company has more than 40 regional distribution centers for import flow and more than 140 distribution centers for domestic flow .When incoming a new geographic arena, the company first determines if the area will be able to contain enough stores to support a distribution center. each(prenominal) distribution center supports between 75 to 100 retail stores within a 250-mile area. Once a center is built, stores are gradually built roughly it to saturate the area and the distribution network is realigned to maximize efficiencies through a process termed reoptimization. The result is a trickle-down effect trucks do not have to travel as far to retail stores to make deliveries, shorter distances reduce transportation costs and lead time, and shorter lead time means holding less sa fety inventory. If shortages do occur, replenishment can be made more quickly because stores receive daily deliveries from distribution centers. The companys hub-and-spoke distribution network utilizes a system of manufacturer storage with customer pickup. No inventory is stored at Wal-Marts distribution centers. Wal-Marts fleet of 3,500 dedicated trucks and over 50,000 trailers are employ to pick up goods like a shot from manufacturers warehouses, thus eliminating intermediaries and increasing responsiveness. The use of trucks raises transportation costs but is justified in terms of reduced inventory.Merchandise brought in by truck to distribution centers is sorted for delivery to stores within 24 to 48 hours. However, certain goods, such as automotive and drug products, are delivered directly to stores by suppliers. Wal-Mart, a pioneer in the logistics technique of cross-docking, also has store-specific orders packed and shipped directly to the store by the manufacturer. Because Wal-Marts fast, responsive transportation operations are such a major part of the companys successful logistics system, great care is taken in the hiring, training, supervising, and assigning of drivers schedules and job responsibilities. From the onset of his sell career, Wal-Mart founder Sam Walton recognized the importance of hiring experienced people and of building loyalty not only in his customers but also in his employees.The company hires only experienced drivers who have driven more than 300,000 accident-free miles and whom it believes will be committed to customer service. Its retail stores are considered important customers of the distribution centers. As stated in the Private Fleet Driver Handbook that each driver is given a copy of, drivers are expected to be polite and kindly when dealing with store personnel and others. In addition to containing a drivers code of conduct, the Private Fleet Driver Handbook gives instructions and rules for following pre-planned tra vel routes and schedules, the responsible unloading of a truck trailer at a retail store, and the safe-guarding of Wal-Marts property.For example, although drivers deliver loaded trailers in the afternoon and change surface hours, a trailer can be brought to the stores docks only at its scheduled unloading time. Because unloading is done at two-hour intervals during the night, a driver is expected to spend the night, returning to the distribution center at a pre-scheduled time with an empty trailer. Coordinators closely monitor the detailed records of each drivers activities for adherence to rules. Violations are dealt with according to handbook procedures, which include employee education to prevent future occurrences of incorrect actions.By effectively managing every aspect of its transportation operations and treating its drivers fairly, Wal-Mart gets results that are unrivaled in the logistics arena. Rules are a key to consistency, which leads to preparedness, which then leads to proper execution. To gain maximum out of cross-docking, Walmart had to make fundamental changes in its come to managerial control. The cross-docking system changed the practice of highly centralized decision at Corporate level.The system shifted the focus from supply chain to the demand chain which meant that kind of of the retailer pushing products into the system customers could pull products, when and where they needed.