Select An Organization That Uses Purchasing Supply Managemen ✓ Solved

Select An Organization Which Uses Purchasing Supply Management To

Select an organization which uses Purchasing & Supply Management to deliver goods and/or services to the customer. Examine business practice and theory in light of the Purchasing & Supply Management literature. Analyse how the supply chain is managed, identifying any areas of business performance which demonstrates sustainable competitive advantage, as well as any areas which may require improvement. You must include 2 or 3 of the core themes explored on this module. For example: sustainable supply chain management, global sourcing, supply strategy, supplier relationship management, supply responsiveness, service based supply chains, closed loop & circular supply chain implementation.

Paper For Above Instructions

The integration of Purchasing and Supply Management (PSM) into organizational frameworks has become increasingly vital for ensuring efficiency, sustainability, and competitiveness in today's global market. This paper will explore the case of Walmart, a global retail giant known for its effective supply chain management and purchasing strategies. Walmart's business model exemplifies how robust PSM practices can deliver goods and services effectively while also highlighting opportunities for further improvement. The analysis will incorporate themes such as sustainable supply chain management, supplier relationship management, and global sourcing.

Walmart's Supply Chain Management

Walmart's approach to supply chain management is renowned for its efficiency and cost-effectiveness. By leveraging advanced technology and data analytics, Walmart ensures optimal inventory management and supply chain transparency. The company utilizes a just-in-time inventory system, which minimizes carrying costs and aligns inventory levels with customer demand. This methodology reflects the principles of lean supply chain thinking, aiming to eliminate waste and enhance production flow (Kumar & Rishika, 2018).

Sustainable Supply Chain Management at Walmart

One of the core themes relevant to this analysis is sustainable supply chain management. Walmart has committed to sustainability and has implemented various initiatives to promote environmental responsibility throughout its supply chain. For instance, the company aims to source 100% of its private label products from suppliers that adhere to its sustainability standards. Furthermore, Walmart has set ambitious goals to reduce greenhouse gas emissions across its supply chain, targeting a 1 billion metric ton reduction by 2030 (Walmart, 2020).

These sustainability initiatives not only benefit the environment but also provide Walmart with a competitive advantage by appealing to an increasingly environmentally-conscious consumer base. By showcasing its commitment to sustainability, Walmart enhances its brand image, fostering customer loyalty and potentially driving revenue through increased market share.

Supplier Relationship Management

Another key theme is supplier relationship management. Walmart employs a collaborative supplier relationship model, characterized by long-term partnerships and mutual trust. This approach allows Walmart to negotiate favorable contract terms and obtain bulk discounts, thus lowering product prices for consumers. Additionally, Walmart's Supplier Development Program encourages suppliers to improve their operational efficiencies, which ultimately benefits both parties (Bai et al., 2021).

However, this relationship dynamic is not without challenges. The pressure on suppliers to lower prices can lead to tension and compromise product quality. Some suppliers have criticized Walmart for its stringent requirements and low-profit margins, arguing that such practices can jeopardize their sustainability (Gereffi, 2020). Therefore, while the supplier relationship management strategy offers benefits, it also necessitates careful balancing to maintain quality and supplier satisfaction.

Global Sourcing Strategies

Walmart's global sourcing strategy is integral to its supply chain effectiveness. By sourcing products from various international markets, Walmart can capitalize on cost differences and drive down prices. This approach aligns with the theme of global sourcing, allowing the company to maintain a diverse product offering while managing risks associated with supply chain disruptions (Schoenherr et al., 2015).

Nonetheless, global sourcing presents its own set of challenges, such as cultural differences, compliance with international regulations, and potential disruptions due to geopolitical factors. To mitigate these risks, Walmart continuously assesses its global supply chain and employs risk management practices to ensure operational resilience.

Areas for Improvement

Despite its strengths, Walmart's supply chain is not without areas for improvement. One significant concern is the company's reliance on a limited number of suppliers for key products, which increases vulnerability to supply chain disruptions. For example, the COVID-19 pandemic highlighted weaknesses in global supply chains, causing shortages and delays in product availability (Harrison, 2021). To strengthen its supply chain resilience, Walmart must diversify its supplier base and invest in building relationships with alternative suppliers.

Additionally, while Walmart's sustainability initiatives are commendable, there is still room for further improvement in transparency regarding supplier practices and environmental impact. Ensuring that suppliers meet sustainability criteria and adhere to ethical labor standards is vital not only for compliance but for maintaining Walmart's reputation (Cohen, 2019).

Conclusion

In conclusion, Walmart serves as an exemplary case of how effective Purchasing and Supply Management can drive organizational success. Through sustainable supply chain management, robust supplier relationships, and strategic global sourcing, Walmart has established a competitive advantage in the retail sector. However, addressing areas for improvement—particularly in supplier base diversification and transparency—will be essential for maintaining its position in an increasingly competitive market. By continuously evolving its PSM strategies and practices, Walmart can ensure that it meets the demands of consumers and adapts to the changing landscape of global commerce.

References

  • Bai, C., Yu, X., & Liu, Z. (2021). Supplier relationship management: The impact on sustainable supply chain. Journal of Cleaner Production, 287, 125-132.
  • Cohen, L. (2019). The ethics of sustainability in retail: Walmart's influence. Business Ethics Quarterly, 29(3), 301-326.
  • Gereffi, G. (2020). The global supply chain: Opportunities and challenges. Economic Geography, 96(2), 122-134.
  • Harrison, A. (2021). COVID-19 and the supply chain: Lessons for the future. Supply Chain Management Review, 25(2), 46-53.
  • Kumar, A., & Rishika, R. (2018). Lean supply chain practices in retailing: A case study of Walmart. International Journal of Retail & Distribution Management, 46(9), 839-855.
  • Schoenherr, T., et al. (2015). The role of global sourcing in a supply chain strategy. Journal of Global Operations and Strategic Sourcing, 8(1), 75-91.
  • Walmart. (2020). Sustainability Report 2020. Retrieved from https://corporate.walmart.com/sustainability-report.
  • Kumar, A., Singh, R., & Sharma, S. (2021). Supplier collaboration and sustainability in supply chain management. Journal of Business Research, 124, 58-66.
  • Wang, Y., & Zhang, A. (2019). Circular economy in retail: Principles and practices. Business Strategy and the Environment, 28(1), 132-148.
  • Fernandez, M., & Henríquez, A. (2020). The relationship between supply chain integration and operational performance. International Journal of Operations & Production Management, 40(1), 89-113.

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