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Globalization introduction
Globalization today
Globalization today
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Conclusions
In conclusion the Internet has played a pivotal role in transforming industry value systems. It has affected some areas in more ways than others. Logistics and operations have been completely transformed in coordination with globalisation while marketing and sales has found new audiences the world over. With technology constantly evolving, supply chain management is changing with it and (with the Internet linking them together) industry value systems are becoming more and more efficient as time goes by.
Introduction
The Internet has played a major role in transforming industry value systems through globalisation and supply chain integration. Factories all over the world each produce a key component necessary for the production of a particular good/item and thanks to the internet it is now easier than ever to manage these supply chains and get the product from production to shelf as quickly and as cheaply as possible.
Globalisation and the Internet
Globalisation has had a significant impact on the way companies do business in recent years. It has created an economic environment that has become more connected and competitive. Through the use of internet and technology, distance and time between countries has been reduced significantly thanks to more efficient logistics and transportation and better networking between organisations. It is now easier than ever for companies to purchase products from different parts of the world and manage those supply chains, especially as many of the links in these chains can be automated. Without the Internet, continued communication and coordination amongst these worldwide suppliers would be more difficult.
Globalisation doesn’t come without its problems though. It has presented ...
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...ehouse stores operating in the USA and select countries around the world. The company is the world’s second largest public corporation. [4] Many factors have contributed towards this success. Walmart operates a Just-In-Time inventory management system. In order to uphold the effectiveness of their Just-In-Time policy in driving down excess stock and costs, Walmart work directly with their suppliers from all over the world to ensure that they meet strict supply chain management requirements. “Lead-time requirements” and “Timely Shipping” are just two of the requirements imposed by Walmart on their suppliers. [5] Walmart has also been using RFID technology (radio-frequency identification) for about a decade and as a result their supply chain management has benefited greatly. [6] They also operate an online store with the option to deliver or reserve for store pick-up.
In 1945, Sam Walton opened his first variety store and in 1962, he opened his first Wal-Mart Discount City in Rogers, Arkansas. Now, Wal-Mart is expected to exceed “$200 billion a year in sales by 2002 (with current figures of) more than 100 million shoppers a week…(and as of 1999) it became the first (private-sector) company in the world to have more than one million employees.” Why? One reason is that Wal-Mart has continued “to lead the way in adopting cutting-edge technology to track how people shop, and to buy and deliver goods more efficiently and cheaply than any other rival.” Many examples exist throughout Wal-Mart’s history including its use of networks, satellite communication, UPC/barcode adoption and more. Much of the technology that was utilized helped Sam Walton more efficiently track what he originally noted on yellow legal pads. From the very beginning, he wanted to know what the customers purchased, what inventory was selling and what stock was not selling. Wal-Mart now “tracks on an almost instantaneous basis the ordering, shipment, and delivery of literally every item it sells, and that it requires its suppliers to hook into the system, enabling it to track most goods every step of the way from the time they’re made and packaged in the factories to when they’re carried out store doors by shoppers.” “Wal-Mart operates the world’s most powerful corporate computing system, with a capacity (as of late 1999) of more than 100 terabytes of data (A terabyte is 1,000 gigabytes, or roughly the equivalent of 250 million pages of text.).
They currently use an “omnistyle” strategy, which makes the inventory in stores and distribution centers available to customers to keep up with the eCommerce demands. Walmart’s omnistyle strategy is similar to what Apple is doing when they are enlisting their vendors to ship product directly to customers. This method cuts out a middle-man, potentially saves shipping costs, and gets the product to the customer quicker.
Value webs are concerned with what goes outside of the firm, and how well the firm coordinates direct, and direct suppliers, and delivery firms, and customers. By working with other firms, and using information systems, an advantage can be gained, by developing industry-wide standards for exchanging information, which eventually forces all market participants to subscribe to similar standards. Information exchange becomes more fluid, which positively influences efficiency, this in turn, makes product substitution unlikely. Such efforts also increase barriers to entry, which discourages new entrants. The internet has made possible to create highly synchronized value webs that integrate different business processes among the whole industry. These value webs are highly responsive and adaptable to environmental changes in supply and demand, as relationships can be bundled or unbundled, depending on the market conditions. Quick decisions can be made in order to optimize the value web relationship in order to deliver the required product or service in the right place and
Walmart is a retail giant that just about everyone in America has purchased something from them. It is a one stop shop for anything that a person could ever need. Walmart stores can be found anywhere in fact most people are less than an hour drive away from a Walmart store. Walmart’s success has put many companies out of business. The chains success is primarily from low prices and using an information technology system to meet customer demands giving them a competitive advantage. Walmart’s first major use of information technology came in 1975 when the company leased an IBM computer system to track inventory in warehouses and distribution centers. Computers have come a very long way since this time and are used almost everywhere. But in 1975 this was cutting edge technology and gave Walmart the competitive advantage over other retailers. Another thing that Walmart used to be revolutionary in their supply chain was the use of scanning barcodes in 1983. Before barcodes objects had to be read by a skilled cashier. With barcodes all that was needed was a quick scan and the computer would do all the work. This greatly sped up checkout time and made tracking inventory and data collection much faster and easier for both customers and the employees. Since this time it has become an industry standard for products.
The organization has had to ensure that it has retail stores in many countries globally and website options in more than 100 countries. The company further enhances access of online stores in more than 37 countries which is accessible all the time and people are able to access the services regardless of their location. Globalization further affects the organization in the sense of international market management which requires it to engage in strictly global decision making. The organization’s production networks have been geared to enhancing global competition (Lüsted, 2012) .The Company is further good when it comes to seizing the opportunities available in global market. For the organization to find efficient as well as cheap means of production, it has to bargain hard so as to allow its contractors to have low profits. This mostly is consequential to the suppliers cutting corners with the use of cheap
Value chains are essential elements of successful businesses, and how to gain a competitive advantage by analyzing them is the most important aspect. In Porter’s value-chain model, he points out that there are two types of business activities: primary activities, which include inbound logistics, operations, outbound logistics, marketing, sales and service; and support activities, which include procurement, technology development, human resources management, and firm infrastructure. In order to gain an edge, companies should focus on these activities to improve or create products that will satisfy their customers.
It is undeniable that Inventory Management is an important key to success at Walmart this paper will discuss the two main methods of Inventory Management used by Wal-Mart: Material Requirements Planning and Just-in Time. Next we write about the technical means of keeping track of inventories like RFID tags. We conclude with discussing how
Wal-Mart is known to beone of the best supply chain companies in the world. Throughout the years Wal-Mart has adapted strategies that keep up to their name. Unlike many retailers, Wal-Mart purchases goods directly from manufacturers, skipping a few steps of the supply chain cycle. Buyers use advanced negotiation skills to make sure they are receiving the best price on purchases. Wal-Mart also has their own trucks picking up from warehouses, reducing the price significantly on transportation. Long term relationships with vendors are extremely emphasized to understand prices and cost structure. These practices build Wal-Mart to its name and keeps low prices for retail customers all over the world. Supply Chain studies have shown that in 1998, Wal-Mart would fill up stock in 2 days compared to their competitors which would complete it in 5. Part of the reason Wal-Mart would replenish so
One of the major trademarks of the twenty-first century business environment is the expediential growth of globalisation. Today’s communications, trade relations and global mutual dependence impose new and ever changing challenges on company’s strategists. The world trade has grown phenomenally as a result of globalisation. (Al-Hyari, et-al, 2011) Transportation of people and goods to all areas of the world has never been as fast and cost-effective as it is today (Pinho and Martins, 2010). Globalisation can be briefly defined as a historical process which is characterised by a growing engagement between peoples on all corners of the globe (Modelski, 2003, pp.55-59)
The paper focuses on the increased complexity of globalized organizations and methods of altering the process within the structure. Business and environment change constantly to sustain development in emerging markets and increase efficiency. Integration of relationships and processes of the world systems, help to manage local, regional and planetary balance to manage duplication of success become conceivable. The retail giant Wal-Mart exhibits its ability to transform the organization asynchronously with the increase integration of globalization.’ Wal-Mart unveils the type of integration possible between globalization, and business services as it adapts, eliminating redundancies and repetitive movement. It observes the effect and influence, propagated on business through it use of supply chains, and influence.
Today there are no limitations to what technology can do to change the way we do Business. From online malls like(http://www.mall.com) to sites likeE-Bay technology has changed the way we do business. What we can conceive we can achieve. What is coming up next might impact our ways of doing business but the major impact, the major changes have began and what will lead now will be enhancing those changes. We have discussed many ways that technology has impacted our businesses.
One of the fundamental factors that has affected the process of economic globalization is the improvements in the technology of transportation and communications. This has reduced the costs of transporting goods, services, and factors of production and of communicating economically useful knowledge and technology. There is no doubt that advances in information and communications technology are the most important technological advances of the past quarter century (Mussa, 2000). By far, the most important and business altering advancement is the internet. There is evidence everywhere that the internet has greatly affected international trade. The internet has opened up the world, and brought it right into everyone's home and business. In addition, technology and the internet have greatly reduced the costs of doing business. Even the smallest operation can now go global via the internet at almost no cost. However, there are still some problems that face these e-commerce activities. These problems are shot-term challenges and can be met. The key issues center around two areas:
Globalization can not only affect a company opening an office in another country but it can affect a small local business as well. As the internet brings the world closer together it becomes far more likely that a business that opened with no intention of selling internationally will have customers form different parts of the world asking for their product. For instance a steel company located in Pennsylvania may suddenly find orders coming in from South American factories. How the steel plant chooses to handle this new international customer could mean ...
Wal-Mart implemented the system in January 2005 with the main aim to reduce out-of-stock by providing visibility into the goods storage with RFID tags. Before RFID was adopted for better managing distribution, Wal-Mart's employees have to manually count goods from their back room, manage goods arrival from suppliers and takes a longer a time to notice out-of-stock goods needed to be replenish, although it is simple to do but very time consuming for them. After implementing RFID, Wal-Mart became the largest retailer in the today world. They have 3 or more fixed RFID reader installed at the back of each store, as well as the sales floor and the back room because of large volume of goods that requires tracking. RFID reader keeps a record of all these goods, time upon arrival from shipping, real-time notification for out-of-stock goods on shelves and point of sale, this also reduce inventory shrinkage, due to the fact that Wal-Mart is a large firm, such occurrence cannot be avoided and harder to manage . With quick replenish of goods on the shelves, more sales will also be made. Employees now have more time to focus on other task, let RFID system do the job of tracking goods. It is estimated that Wal-Mart would saves up to at least 8 billion of US dollars due to labour cost. Thus, these factors indirectly increases Wal-Mart's profit margin enormously. In the end, Wal-Mart not only able to make more profit for themselves with this technology but also solve inventory problem they are faced. (Cost reduction in retailing & products using RFID,
By adopting the value chain into a manufacturing company, it will gain efficiency, effectiveness, reduce the product cost and improve continuously. For example, Toyota has implemented Toyota Product System (TPS) integrated information system with the business process which allowed the company to be more efficiency, effectiveness and reduce inventory cost. (Toyota