tmi assignment- complexity- wal-mart- group 3

7/31/2019 TMI Assignment- Complexity- Wal-Mart- Group 3

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Strategic Advantage Through Innovation

Mechanism- Complexity

Submitted to

Dr. Jagadeesh Raj

Gowtham K R (11019)

Narasimhan Keshav (11032)Vipin Bajaj (11060)

Rajanikar Kumar (11103)

Sunithi Agarwal (11175)

By Group- 3


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Mechanism- Complexity

- Developing Complex Product or Service that gainscompetitive advantage over others.

- Molybdenum-silicon-boron (Mo-Si-B) alloys used in jet

engines operate.

- Supply chain management model at Wal-Mart and InventoryManagement Model of Dell Inc.

- Jet engine developed by Rolls Royce


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Other Mechanisms

1. Novelty in Product or Service offering

2. Novelty in Process

3. Add to/extend range of competitive factors

4. Timing- First Move Advantage & Fast Follower Advantage

5. Robust/Platform Design

6. Rewriting the rules

7. Legal Protection of Intellectual Property


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Complexity Wal-Mart

Wal- mart owes much of its success and expectation for future growth

to its advanced information system and complex supply chain

management system

Reasons for success of Wal-Mart:-

- Efficient distribution network - hub and spoke distribution system

- Economies of scale - Everyday Low Prices Strategy

- large fleet of company owned trucks

- Cross-Docking warehousing system

- Electronic Data Interchange (EDI), TransMan (Transport

Management Software), Universal Product Code (UPC), use of

satellite communication


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Wal-Mart

How Wal-Marts distribution strategy yields competitive

advantage ?

- Distribution Operating Leverage

- Infrastructure Ownership/Control and Flexibility- Distribution Ubiquity/Customer Proximity


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CASE -Walmart

Wal-Mart is more than just the world's largest retailer. It is an economic

force and a cultural phenomenon.

Sam Walton opened his first five-and-dime in 1950. His vision was to

keep prices as low as possible.

Today Walmart is without question the most successful retailer in the

history of the United States, and in the history of the entire world by

almost any measure (number of stores, sales revenue, number of

employees, market share, etc.).


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Walmart began with the goal to provide customers with the goods they

wanted when and where they wanted them.

Walmart then focused on developing cost structures that allowed it to

offer low everyday pricing.

Walmart then concentrated on developing a more highly structured and

advanced supply chain management strategy to exploit and enhance this

competitive advantage.

CASE -Walmart


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Wal-Mart Strategy Everyday Low Prices (EDLP) Strategy

Wal-Mart pushed the retail industry to establish the universal bar code,

which forced manufacturers to adopt common labeling.

The bar allowed retailers to generate all kinds of information - creating a

subtle shift of power from manufacturers to retailers.

Recently, Wal-Mart became the first major retailer to demand

manufacturers use radio frequency identification technology (RFID).


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Wal-mart- Managing the Supply Chain

Walmart has been able to assume market leadership position primarily dueto its efficient integration of suppliers, manufacturing, warehousing, and

distribution to stores.

Walmarts supply chain begins with strategic sourcing to find products at

the best price from suppliers who are in a position to ensure they can meetdemand

Technology plays a key role in Walmarts supply chain, serving as the

foundation of their supply chain.


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Benefits of Efficient Supply Chain

Wal-Marts supply chain management strategy has provided the

company with several sustainable competitive advantages

lower product costs

reduced inventory carrying costs

improved in-store variety and selection, and

highly competitive pricing for the consumer

As technology evolves, Walmart continues to focus on innovative

processes and systems to improve its supply chain and achievegreater efficiency.


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TECHNOLOGY MANAGEMENT

Technology plays an important role in Wal-Marts supply chain, serving as

the foundation of their supply chain

Fully automated Cross-Docking system

Worlds largest private satellite communications

Universal Product Code (UPC)

Green Supply Chain

Running their stores on 100% renewable energy

Implementing a zero waste system

Introducing or redesigning products that sustain people and the planet

Supplier Energy Efficiency Program (SEEP)


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TECHNOLOGY MANAGEMENT Cntd..

Energy Management System (EMS)

LED refrigerated case lighting technology

Daylight Harvesting- Many Wal-Mart stores and distribution

Secondary Loop Refrigeration System

Indirect Evaporative Cooling with Radiant Flooring


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LIMITATIONS of the mechanism

Volume and Scale of operation

Huge Dependence on IT systems

Need for Infrastructure

Space requirement

Cross Docking


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PREREQUISITES for following wal-mart

supply chain model

Collaborative Planning Forecasting and Replenishment

(CPFR)

Efficient Inventory Management

Robust IT infrastructure Build on your own through strong R&D activities

Hub and Spoke Model

Leverage Selling General and Administrative Expenses

(SG&A)


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Thank you

tmi assignment- complexity- wal-mart- group 3

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