Logistics Research Paper Example | Topics and Well Written Essays - 2000 words

Logistics - Research Paper Example Large organizations such as Wal-Mart owe their success from effective product distribution path design that has enabled them to make autonomous sales and to maintain loyalty from its esteemed customers. An effective distribution path ensures that products are available to the customers and that they are easy to access at any given time. Wal-Mart has put a great emphasis on supply chain management to beat the competition that exists within the global markets to maintain its dominance in the business environment. This article seeks to evaluate how Wal-Mart has managed to utilize supply chain management to maintain its relevance in the competitive business market. Wal-Mart is one of the famous retail multinational organizations based in America that has maintained high profits through effective product management and supply. The company has maintained an upward growth its entry into the business market in the year 1969, when it was locally based in America (Stentoft, 2010). Today it has managed to hit the international market and has remained one of the dominant sellers of grocery and food products. Today, this company owns 8500 stores in 15 different countries where it is known by different business names. As Traub (2012) points out, Wal-Mart success emanates from its ability to maintain a smooth path for the flow of its goods and today the company enjoys the privilege of being associated with the most effective channel design strategies in the global market. In essence, Wal-Mart has remained swift and dynamic in adjusting to the changes in market environment as a strategy to infiltrate into the competitive market environment. At its foundation, Wal-Mart started with the objective of providing the public with the goods they need, at the specific time they need them and at the most convenient form for utilization. In this regard, the company had to study the market environment to establish the demand of the people before arriving to the idea of purchasing, process ing and supplying food and grocery products in various forms. Their primary goal was to control its entire operations by maintaining efficient production, transportation, product storage and its distribution, and selling in its product outlets (Bonacich & Wilson, 2005). Consequently, the management applied an integrative approach to coordinate all the processes from the time the raw products were obtained to the time they were sold to the user in the market environment. Apart from cost strategies, management of this company has employed numerous business strategies to coordinate the supply chain to their advantage. One of the strategies that Wal-Mart management has employed to remain competitive in its dominant countries is the use of pricing strategies to ensure that it is capable of supplying its products to distant markets at lower prices than its competitors. Often, the cost of moving products from the point of production to the point of consumption places cost overheads on the final product cost resulting to high priced goods (Stentoft, 2010). The ability of an organization to reduce the transport cost overheads makes it possible for it to reduce the selling cost without having to sacrifice the quality of the product. Wal-Mart maintained low supply cost by eliminating the role of middlemen in the product path. Although middle men play a key role in supplying raw materials and supplying ready products to the customer, they impose a large overhead cost that often