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Comparison Of Supply Chain Management Practices

5906 words - 24 pages

This report provides a comparison of the supply chain management practices of Wal-Mart and Toyota. Comparison was done after researching, examining, and analysing each company’s supply chain management practices, in relation to each company’s values and philosophy. Comparison was done in five sections, by examining strategic alliances, procurement and outsourcing, challenges and risks, sustainable strategies, and efficient supply chains in relation to technology. Additional figures and references used can be found in the appendix and reference list.

Comparison of the two supply chain management practices showed that despite being from different industries, with different company philosophies, Wal-Mart and Toyota both have similarities in their supply chain management practices. In particular, the two companies are similar in their responses to challenges and risks faced, as well as the incorporation of sustainable strategies in their supply chain practices, and their usage of technology to increase the efficiency of their supply chains.

In conclusion, a number of recommendations are presented for each firm. Wal-Mart is advised to foster a more collaborative supplier relationship, especially with local entities in unfamiliar markets, as well as encouraging suppliers to build more sustainable operations through the research of efficient packaging designs. Recommendations for Toyota include revising contracts and risk management with Toyota’s current and future suppliers for stricter quality control along their supply chain, so as to ensure delivered materials are standardised. Moreover, Toyota could also enter new geographic markets though a strategic alliance with existing companies. By doing so, Toyota is able maintain their competitive advantage by keeping their core competencies internal.
Supply chain management comprises activities and techniques utilised by firms for maximisation of efficiency and effectiveness. These practices ensure production and distribution of merchandise in the right quantities, locations, and time. Efficient supply chain management can provide a source of competitive advantage to an organisation (Christopher, 2012).

In the case of Wal-Mart, supply chain management practices are targeted towards lowering cost price, the basis of Wal-Mart’s competitive strategy. This is done by avoiding unnecessary middlemen and seeking to purchase products directly from manufacturers. As a large retailer, Wal-Mart is also able to utilise buyer power to achieve a supply chain that is more efficient and low-cost (Basker, 2007).

Supply chain management practices for Toyota are integrated into the Toyota Production System (TPS). TPS is a combination of organizational philosophies, and practices, focusing on relationships and quality. Toyota achieves this by producing vehicles Just In Time (JIT), to reduce in-process inventory and associated carrying costs, as well as increasing flexibility. This also reduces overburden and...

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