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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