Wal-Mart and the Successful Supply Chain Management

We all know that Wal-Mart is one the most sucessful companies out there with one of the best supply chain’s ever created. The University of San Francisco wrote up an article on the techniques that Wal-Mart uses to become sucessful and they are exactly the same techniques that we learned in class.


Wal-Marts cost saving methods are always passed down to the customer as the costs associated with their supply chain is minimized.

Their success comes from:

  • Cross Docking
  • Demand Planning
  • Forecasting
  • Inventory Management
  • Strategic Sourcing
  • Distribution Management
I looked up cross docking to get a better understanding of what it is and how Wal-Mart uses it and it is a technique that replenishes inventory. Cross-docking is when inventory comes from the supplier directly to the retailers warehouse and then turned around and shipped out on trucks to the retailers store. This minimizes shelf time and inventory costs that Wal-Mart would of had to pay.
In addition, supply chain managers at Wal-Mart focus heavily on demand planning and forecasting like we did in class in order to acheive “lean inventory”. They focus on historical data, upcoming sales, and trends in the indsustry to predict the inventory levels they need.  They then forecast out their predicitons to make sure distributors have just the right amount of inventory on hand to reduce inventory costs.
One of the best ways Wal-Mart gets the lowest prices though is it vendor partners and the long-term contracts established with them. Since Wal-Mart is a market leader in retail sales, vendors are forced to agree to low margin, high volume sales to Wal-Mart if they want to stay on the retailers shelves.
One of my first accounting jobs was working at a online computers parts retailer/wholesaler. We had a few warehouses connected to an office and this gave me my first insight into supply chain and inventory management as I was involved in purchasing as well. Initially, our inventory system was out of date as we used a periodic system that was time-consuming and expensive. Our inventory mangement became more efficient when we ordered a SKU system to keep a perpetual count of what we had. Our hot-selling or our “A” list items were constantly being re-ordered and our inventory became much more lean to the point where we were restocking huge shelves every week. We used histroical data such as Black Friday sales and upcoming promotions to know how much to stock and also became a volume buyer to achieve the lowest prices.
Have you had experience being in a purchasing department and measure the inventory volume that needs to be purchased?


Tax Season

I had an internship with a Big 4 accounting firm. I was practicing international tax which focused on individuals who were expatriates and foreign nationals. Not only did I have to know how to do a domestic return and understand the tax code for domestic issues, but I also had to take into account international tax issues and situations. If you’ve ever worked at a firm who does taxes, the process during the winter is huge and complex. Our department has a structure and the managers/directors really take on the management role while the lower-level associates will do most of the leg work in preparing the tax returns. Without getting to technical, tax returns were just one of the many services we were doing during this past busy season. Nevertheless, the volume and complexity of our clients made it imperative that there was strong management controls in place for work-flow to be smooth and consistent. After learning some management concepts these last couple weeks, I realized how my managers actually integrated these strategic techniques to deliver timely and quality deliverables to our clients.

Without getting into too mch detail and depth, I wanted to explain some techniques that they utilized. First some background information. We have multi-national companies as clients but we do not do the companies taxes, we do the employees taxes. This amounts to thousands of tax returns that need to be done by April 15 (sometimes sooner). The tax returns will either be done at the local office (Chicago) or be sent to our India processing center. The amount of work and complexity of the tax issues is what decides how the tax return will be handled whether it would be done by the local office or India. These are usually judgement calls by management so that they can utilize their resources to provide the highest quality at the lowest cost. In addition, the tax return has a long multi-step process.

This multi-step process had to use a project network – similar to what we did in class. A tax return has these steps. 1. Taxpayer fills out questionnaire 2. Tax Analysis (find missing information) 3. Tax Analysis review 4. Frontloading (input information to do tax return 5. Frontload Review 6. Send to processing for data input 7. Processing review 8. Deliverable

Each step has a set estimated time of completion but some steps can be started while others are being worked on. A critical path would be set and slack time existed in this chart. It was managements daily responsibility to analyze work-flow and see where the projects (tax returns) are in the path.

At many companies, we as college students usually start off in positions take don’t require much management techniques or strategies that are to be personally implemented by us but as we progess, our jobs get much more focused and oriented on developing these skill sets.

Has anyone else worked at a tax firm that experienced something similar to what I have?