Page 300 - DMGT501_OPERATIONS_MANAGEMENT

Operations Management

Notes Hindustan Lever Ltd. a consumer products firm, which must produce in anticipation of demand.
In this case, the manufacturing cycle is anticipating customer demand (referred to as a push
process).
Figure 13.6 shows graphically the push/pull system in a retail network. It can be clearly seen
from the figure that in the pull processes, customer demand is known with certainty at the time
of execution, i.e., it is executed after the customer order arrives, whereas for a push process,
demand is not known and must be forecast as the customer order is yet to arrive. Therefore, pull
processes may also be referred to as reactive processes because they react to customer demand.
Push processes may also be referred to as speculative processes because they respond to forecasted
rather than actual demand. The push/pull boundary in a supply chain separates push processes
from pull processes.

A push/pull view of the supply chain is very useful when considering strategic decisions relating
to supply chain design. This view forces a more global consideration of supply chain process as
they relate to a customer order. For instance, it could result in responsibility for certain processes
being passed on to a different stage of the supply chain if making this transfer allows push
process to become a pull process. One clear distinction between the two supply processes is that
a supply chain that has fewer stages and more pull processes has a significant impact on improving
supply chain performance.

Caselet Wal-Mart’s “Green” Supply Chain Management

upply chain management has been the cornerstone to Wal-Mart’s success and remains
their primary competitive advantage in the retail/department store industry. Their
Sdistribution system is generally regarded as the most efficient and they have an
approach to supply chain management that has long emphasized visibility through the
sharing of information with their suppliers. Although there are hundreds of logistical
functions which allow Wal-Mart to be the price and logistics leader, the focus will be
primarily on the company’s newly adopted strategy of making logistical processes “green”
and more environmentally conscious. According to the Supply Chain Management Review,
Wal-Mart CEO Lee Scott committed the company to three ambitious goals: to be supplied
100 percent by renewable energy; to create zero waste; and to sell products that sustain
Wal-Mart’s resources and the environment. Wal-Mart’s 14 Sustainable Value Networks,
the Network’s structure, new “green” logistics technologies, and additional future
initiatives will be considered along with counter arguments which suggest that Wal-
Mart’s green initiative is simply unsustainable. The main sticking point seems to be the
same one that has long held back the adoption of better light bulbs, home solar panels, or
hybrid cars. Upfront costs are unavoidable; and the promise of potential savings down the
road does not resonate with consumers, or smaller Wal-Mart suppliers, the same way it
does with big corporations. So that’s the big question: How much will Wal-Mart invest in
green technologies now to clean up its act down the road?
Introduction
Wal-Mart has undergone many growth stages since Sam Walton first decided to be the
best retailer in the world. His initial strategy was to target low-income families in rural
areas by offering significantly lower costs. When David Glass took over in 1988, Walton’s
mission was truly realized through the use of technology in distribution and supply chain
logistics, which allowed Wal-Mart the opportunity to cut costs and lower prices for end
users. Lee Scott took the reins in 2000 to steer Wal-Mart toward sustainability. Scott’s
Contd...

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