I. Case summary
Walmart in China was first set up more than 20 years ago and sells major
international brands to its customers. Walmart, which is in the supermarket industries in most
countries, including Canada and China, is one of the leading supermarkets in the world that
operates both online and offline (Michelson et al. 2018). The supermarket has an added
advantage of its fresh fruits and foods safety supplies and quality directly from farmers to the
consumers, which is a fulfilment of the direct farm program in china (DING,2015).
Therefore, in this assignment, the analysis of Walmart China's demand, supply, and product
flow of the goods will be essential. Evaluating the possible recommendations for
improvement to make room for growth and expansion will also form part of the study.
II. Demand Forecast
Evaluating the demand for Walmart China is crucial as it will help in the analysis of
the supermarkets' growth and among its competitors, the main one being the Carrefour
supermarket. The demand for the freshness of products by the Chinese makes the most
significant demand forecast for the Walmart supermarket in China. The citizens of the
country demand for quality products and foods which have the best storage conditions which
are available in the Walmart supermarket. To provide the best for the consumers, the
supermarket meets the consumers demand freshness by directly contracting the farmers for
the fresh products. Even though there is the problem of transportation to the customers,
Walmart thrives on meeting the demand by solving the distribution channels in China.
Walmart China concentrates on distribution facilities, which help in the distribution and
storage of fresh foods for their consumers to always have a constant flow of products.
WALMART CHINA: SUPPLY CHAIN 3
To thrive in business, Walmart China invests in infrastructure, marketing, and
sourcing, and supplying of the fresh and quality products it produces (Michelson et al. 2018).
Walmart focuses on storage and transportation of the fresh produce and ensures the
continuous flow of stock, making sure that they do not run out of products for their
customers. With this in mind, Walmart China invests in distribution facilities and centers,
which give allows their suppliers to transport full trucks of their fresh products to the
distribution centers (Johnson, 2015). Apart from the distribution centers, Walmart also uses
individual stores which are there to meet the consumers' demands without delay. Moreover,
Walmart uses advanced technology in its management, which integrates manufacturing,
storage, as well as a distribution which reduces the costs and pricing of their products.
2. Demand constraints
As Michelson et al. (2018) point out, the problems faced by Walmart supermarket in
2014 included the transportation of their high-quality products. The supermarket, which was
new in China experienced language barriers in a foreign land, which required them to learn
the Chinese cultures. The distribution centres set in most prominent locations in China
became the primary outlets which offer safe and fresh foods to online and offline customers.
Walmart seeks to reduce the production, distribution, and transportation costs to realize high
profits for the products it sells to the public by using diverse sourcing strategies. Walmart
around the world, including the USA, Canada, and China, use strategic sourcing to look for
farmers or suppliers with the best prices. Therefore, for the organization to operate long term,
WALMART CHINA: SUPPLY CHAIN 4
it seeks to make lasting partnerships with vendors, companies, farmers that have high
production of fresh fruits and foods. Furthermore, Walmart makes use of excellent
communication as well as relationship networks with their partners, suppliers, and customers,
which makes them successful in distribution and profitable (Lu,2018). The company also
makes use of advanced technology like smart tags, handheld scanners, and radio frequency
identification to track purchases and demands; as well as to track inventory to restock.
Moreover, Walmart uses the cross-docking technique, which is offloading of products from
one truck to a semi-truck which distributes to centres, which saves on time, space, and money
The sourcing strategies that Walmart uses encourages perfect relationships and
communication with suppliers, which helps in restocking the supermarket to avoid the
situation that customers will lack what they want to buy. The use of advanced technology
which enables the management to track the products to replace or restock and the products in
demand are essential for the supermarket.
Since Walmart is a global company, the strategies it uses in carrying out the
successful business, including the use of advanced technology, partnerships, excellent
communication, and cross-docking, which are efficient for the company. Walmart should
invest more in distribution processes in the foreign countries they wish to invest in and
motivate their employees more for perfect results.
WALMART CHINA: SUPPLY CHAIN 5
DING, J. P., Huang, J. K., Jia, X. P., Bai, J. F., Boucher, S., & Carter, M. (2015). Direct farm,
production base, traceability, and food safety in China. Journal of Integrative
Agriculture, 14(11), 2380-2390.
Johnson, F. (2015, November 26). Walmart China – Supply Chain Transformation. Retrieved
May 28, 2018.
Lu, Clara. (2018). Walmart's successful supply chain management. Tradegecko. Retrieved
Michelson, H., Boucher, S., Cheng, X., Huang, J., & Jia, X. (2018). Connecting supermarkets
and farms: the role of intermediaries in Walmart China's fresh produce supply chains.
Renewable Agriculture and Food Systems, 33(1), 47-59.