Supply Chain Management and E-Procurement †Free Samples to Students

Question: Discuss about the Supply Chain Management and E-Procurement. Answer: Introduction: The report discusses elaborately about Wamarts Supply chain in the context of how they work with the suppliers, address issues, level of information shares, centralized distribution and the complexity in the technology. There is a section 2 in the report that deals with supply chain of Amazon that helps one to understand how they undertake operation in the online space, how they differ from the bricks and mortar perspective, how they are different from an online purchasing perspective. The report has a section 3 that deals with the summary of both the supply chain. There is also discussion on the logistics of third and fourth party logistics and its impact on the online and traditional supply chain. Walmart is the most powerful and largest retailer that started with the aim of providing customers with goods irrespective of the time and place. Therefore, the company mainly focused on the development of cost structures that ensured it to offer minimum pricing on a daily basis. Further, to accomplish this company also concentrated on the development of an advanced and highly structured strategy for supply chain management. The incorporation of an effective supply chain not only helped the company in enhancing its competitive advantage but a position in the market leadership (Barney, 2012). Walmart believes in sourcing strategically so that products are available at the best possible price from suppliers thus ensuring their demands remain fulfilled. The company also builds up strategic partnership with the vendors thereby assuring them the potential for high volume and long-term purchases in return of minimum prices (Christopher, 2016). The company also streamlined the strategies for supply chain management for improving communication and relationship networks with the suppliers for improving flow of material and lower inventory stock. The retailing giant Walmart also follows cross docking as an inventory tactic. Cross docking is a practice of logistics that remains the core to Walmarts strategy for efficiently replenishing its inventory (Zhang, 2012). This tactic enables the company in direct transferring of products from outbound or inbound truck without maintaining extra storage. In other words, the company ensures that loading and unloading of items done without any storage in between. The process of cross docking not only lowers inventory and transportation cost but also reduce transportation time thereby eliminating inefficiencies. Walmart , the world biggest retailer chain has been a leader in embracing technology and using it in a manner that it is able to track the companys inventory stock and thereby enabling in restocking the shelves thereby resulting in cost cut(Gordon, 2014). Therefore, technology plays a key role in laying the foundation of companys supply chain. The company boost of having the largest infrastructure for information technology compared to any private holding company. The network design and state of the art technology that enables Walmart to predict and track inventory levels, forecast demand with accuracy, ensure efficiency in transportation routes, servicing response logistics and management of effective customer relationships(Davenport, Dalle Lucker, 2014). Amazon believes in merging its competitive strategy with the strategic fit of the supply chain management in becoming the preferred choice of its customers. The company ensures that a combination of multi-tier inventory management, information technology, and superlative transportation along with wide warehouse network will work together in order to help align the supply chain management with the competitive strategy(Barney, 2012). Amazon also undertakes the aspect of outsourcing the companys inventory. This implies that the company believes in outsourcing the distribution and storage of products not meant for frequent purchases or for immediate delivery. Amazon also does this for products where expenses for storing them exceed marginal returns on the sales. Amazon puts up a stock of the items frequently purchased or ordered as an inventory in its own warehouses. This strategy is undertaken so that the company is able to respond to the customers on an immediate basis. The segregation of the inventories is thus enabling Amazon to become a pro as far as customer responsiveness is concerned but also cut down their expenses (Li et al., 2012). Therefore, Amazon not only follows a price differentiation strategy and but also believes in segregation of its customers. However, the various forms of delivery undertaken by the company are free delivery of the super saver type, delivery of first class, delivery of one day and delivery for prime customers (Pandit Poojari, 2014). Amazon makes an offering to the customer to pay more if they want fast delivery otherwise; they maintain their normal pace of delivery. Outsourcing of inventory and segmentation of the customers into price differentiation makes the company more agile and nimble in markets that undergo changes with demand fluctuations. Therefore, the key feature of Amazons Supply Chain Management is it has evolved in with the growth in the market. Initially Amazon was a bookstore that acted as intermediary between the sellers and buyers and thus did not have a stock of its own. This allowed the company to hold certain items in its warehouses. Thus, Amazon believes in a strategy of push pull where inventory belongs to the push strategy and the shipment of orders represented the pull strategy. Thus, Amazon believes in following a pure pull strategy for the items that it does not hold a stock (Peppard Ward, 2016). The discussion on supply chain management of Amazon remains incomplete without mentioning an analysis on the inventory system that is multi tier. The first tier represents an aggregation of the distribution centers that ensures Amazon holds lesser inventories and ensures dynamic response to the demands. The second tier deals with distribution centers of wholesalers and collaborates so that the company can rely on them just in case a product is unavailable in Amazon stock of supply. Further, the company also makes use of real time information technologies for leveraging the efficiencies of distribution. The third tier of Amazon deals with third party publishers, vendors, sellers and manufacturers who makes sure that the company acts an intermediary in fulfilling the customer demand. Summary of the two Supply Chains Though online selling has been a growing phenomenon in the retail chain, the brick and mortar stores are not something to do away with as they do well in certain sectors of the economy. However, there are innumerable differences between customer experiences in online selling where they have intangible product interaction compared to products sold in stores where customers can handle merchandise personally (Dinner et al., 2014). One can look at how the two procedures lead to different customer experience. Consumers remain more confident about purchasing a product online as they have scope for research. The process not only saves times but also energy. However, if there is any confusion regarding the product they cannot instantly clear their doubts, as they would do it in a store. Retail customers analyze and gather information regarding the product visually. However, there are some products that customer needs to feel, hear, smell or taste before taking a decision. Online sites are somewhat similar to brick and mortar stores in allowing customers to take a decision based on identification. Thus, when purchase requires touch, hearing, smell or taste then stores have an advantage. Online retailers have inventory costs that are lower so they can offer products at considerable low prices. Stores maintain physical inventory, and so they cannot lower prices beyond a certain limit The online customer only see images of products and have to wait for sometime before possessing it. Compared to this the customer satisfaction in store is greater as the customer get have an immediate possession. Stores charges local and state sales taxes for their products while for online operations only sales tax is levied whenever they have physical presence in specified jurisdiction Explanation of 3rd party and 4th party logistics A companys logistics outsourcing has become a certain important aspect, which can affect the final product sell. A 3rd party supply chain management is an act of outsourcing the company products logistics and distribution whereas the 4th party logistics operation is dependent upon the integrator and accumulators add resources (Presutti, 2012). This service differs in various terms of logistics management. Warehousing, integrating operations, ensuring services for transportation, cross docking through shipping, management of inventory management, freight forwarding and packaging are the some of the major tasks for an outsourcing logistics companies. There are certain types of services that the 3PL gives to global companies (Williams, Esper Ozment, 2014). Standard which are involve in basic activities, like pick and pack, small warehousing and distribution through channels (Cooper Ellram, 2015) Service developer these companies gives a valued-added service to the products or services they distribute among their facilities. Customer adaptor these companies customises their service to different the developers. The complete logistics firm take over the certain companies and provide the necessary service(Cooper Ellram, 2015). Customer developer these companies integrates all the service and their operation is dependent on the whole logistics operation needed to be fulfilled (Presutti, 2012).. A 4PL companys operation is based on the procurement, storage, distribution and process. It generally takes over selling and marketing processes of a company(Williams, Esper Ozment, 2014). A 4PL is an integrator an accumulator of the company and mostly run on logistics. Third party and fourth party logistics operate on same ways but with different parts. The online and standard supply chain is based the method of inbound and outbound logistics freight of a company. Often 4 PL are known as the joint-venture parties that does not affect the main operation of the parent company. In addition, the company also provides client administration in some regions. The global logistics companies 3 or 4 PL are different in structure (Disney, Naim Potter, 2014). Impact of Traditional and Online Supply-chain After the emergence of ecommerce companies, the traditional generation of logistics have grown more and have evolved their primary process. Tracking systems that are manually operated, order processing systems that are paper oriented, and communication links that are wired were the initial tools for management available to managers of logistics but it has changed drastically. The organised retailer is suffering more in terms of facing competition from the ecommerce companies(Power, 2012). Wal-mart the global retail giant has also expanded its visibility in the online market. However, it cannot reach the efficiency level of Amazon supply chain (Presutti, 2012). Though the supply-chain model of amazon is mostly through procurement facility, the maintenance of this facility is and centralised among the core operation. In conventional retail companies the facilities where depend upon the bulk movement of goods and it did not affect the balance sheet of the organisation (Lancioni, Schau Smith, 2012). However, the Amazon business model consists of supplier and client channel relationship mostly. One of the key activities of Amazon is to source or outsource material or service from a third party supplier. Retail used to dominate their supplier if the market was more influenced by the retailer (Disney, Naim Potter, 2014). Nevertheless, the presence of Amazon has helped lifting the relationship in logistics business. In order to maintain the consumer confidence the online ecommerce companies they depends on the companies that channelize their distribution(Presutti, 2012).. There are some benefits and drawbacks of using a e-retailing model. The economic value addition of a product is a beneficial aspect of e-procurement. The supply chain process also affects the operational performance of a company. Augmented e-commerce volumes sale and omni-channel action plans are putting extraordinary demands on the supply chain management (Power, 2012). The quickly changing demands that the consumers presents takes whole innovative set of challenge to retailers and e-tailors(Lancioni, Schau Smith, 2012). Conclusion: The report concludes by giving an overview about Wamarts Supply chain in the first section. The second section in the report deals with supply chain of Amazon. The report has section 3 deals with summary of both supply chain. Therefore, from the knowledge of 3PL and 4PL it can be concluded that it may differ in terms but the operations are more or less same. There is only a structural difference in the two logistics variation. In addition, the two different models of logistics of Wal-Mart and Amazon, which are traditional supply chain and other based on e-procurement model of ecommerce, are of different composition. References Barney, J. B. (2012). Purchasing, supply chain management and sustained competitive advantage: The relevance of resource?based theory. Journal of supply chain management, 48(2), 3-6. Christopher, M. (2016). Logistics supply chain management. Pearson UK. Cooper, M. C., Ellram, L. M. (2015). Characteristics of supply chain management and the implications for purchasing and logistics strategy.The international journal of logistics management,4(2), 13-24. Davenport, T. H., Dalle Mule, L., Lucker, J. (2014). 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