Essay on Supply Chain

2195 Words Mar 19th, 2011 9 Pages
1. Amazon.com, Peapod, Dell, and many furniture manufacturers use push-pull supply chain strategies. Describe how each of these companies takes advantage of the risk-pooling concept.
To better understand the strategies used by the three (3) companies and furniture manufacturers, the definition of Push or Pull is established below:
Push Strategies – when the manufacturer uses its sales force and trade promotion money to induce intermediaries to carry, promote, and sell the product to end users.
Pull Strategies – when a manufacturer uses advertising and promotion to persuade consumers to ask intermediaries for the product thus inducing the intermediaries to order it.
The Figure below illustrates the Push-Pull bounderies of the three (3)
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Some of the other reasons Wal-Mart may have in opening stores globally is to reach out to more (3) Customers, (4) Increase Revenue, (5) Increase Operating Expenditure, (6) Increase Bottom Line, (7) Add More Values, (8) Diversify Market Base, (9) Take Advantage of Low Cost Countries, (10) Utilize Effective Labor Sources from Around the World, (11) Develop Unique Logistics Network, and (12) Develop Optimal and Efficient Supply Chain Across Global.
b. Why would it be beneficial for Wal-Mart to have suppliers in different countries?
There are two (2) obvious advantages.
(1) A company or firm must always be creative in improving their bottom line - to have supplier base across different countries can allow Wal-Mart to buy from low cost country and to take advantage of savings/profits that come out of it. This strategy is almost a requirement for multi-national companies that requires 24/7 manufacturing and critical services. For example, Wal-Mart could implement strategic sourcing program where it would buy goods from low cost country such as China then import them to Industrial country such as US or Canada.
Another benefit for having suppliers in different countries is (2) to increase potential source region which can play important role in creating optimal logistics network. For example, if the particular ITEM-A can be source from supplier X located in USA and same ITEM-A can also be source from supplier Y located in Canada.

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