Question

You know that Walmart’s SCM strategy included: 1) strategy alignment with SC partners, 2) sharing information with SC partners through a state of the art ERP system (RetailLink), and 3) development of a state of the art distribution system. In Assignment 1, you reviewed anecdotal evidence that strategy alignment leads to improved supply chain and organizational performance.   In Assignment 2, you reviewed empirical evidence that verifies the importance of strategy alignment (specifically marketing strategy alignment).

Now, I want you to verify the anecdotal evidence related to the importance of information sharing from the Walmart/Bon Ami article with some additional anecdotal evidence. In Assignment 1, you read and answered questions about Walmart’s implementation of supply chain management. In that article, Walmart’s enterprise resource planning (ERP) system was described. Retail-Link ERP system is a key component of Walmart’s supply chain management strategy. Sam Walton thought the Retail-Link system was so important that he was willing to spend $4 billion to develop it. An organization really can’t successfully implement SCM without a functioning ERP system.

An ERP system is the information system that supports SCM. It includes the software, hardware, data, personnel, and procedures necessary for supply chain partners to share information synchronously in real-time. Remember the bullwhip effect? The bullwhip effect results in inventory shortages and surpluses. Both are bad. With shortages, you miss a sale. With surpluses, you have inventory that you either can’t sell at all or that you must discount heavily to sell. The bullwhip effect is caused by the sequential processing of information from ultimate customer back through the supply chain to the suppliers’ suppliers. This sequential processing causes delays and information distortion. The solution is process information synchronously and in real-time. This means that all supply chain partners can see the information at the same time. ERP systems are designed to provide information synchronously and in real-time.

Now, read the article by Lee et al. (2004) and answer the following questions. It tells the story (more anecdotal evidence) of how a shirt manufacturing firm used ERP to gain competitive advantage.

1. How did Wal-Mart use its ERP system to achieve cost advantage over its competitors?
2. How did FedEx use its ERP system to transform itself?
3. What type of business is TAL in? Who are TAL’s major customers?
4. Describe TAL’s competitive situation prior to implementing its ERP system.
5. Describe TAL’s position within the supply chain in terms of strength compared to its supply chain partners.
6. Why did TAL decide to seek a comprehensive ERP solution?
7. Describe the MOVEX ERP system that TAL adopted? How much did it cost TAL to implement this ERP system and how many full-time employees are dedicated to supporting the system?
8. It is important to note that an ERP system has little value if the organization does not provide quality products and services. Describe TAL’s SofTal technology development as an example of innovation related to its primary product.
9. Describe the vendor-managed inventory system that TAL has adopted with its major customers. TAL’s vendor-managed inventory approach has sales and marketing capabilities. Describe those additional capabilities.
10. Remember the “Bullwhip Effect” that you learned about in your operations management class. What problems are associated with the propagation of information sequentially through a supply chain? How does an ERP system help move from sequential to synchronous propagation? What role does the “central hub” play in supporting the synchronous provision of real-time information to all supply chain partners?
11. Describe TAL’s Made-to-Measure capabilities. Use the Brooks Brothers example to describe how TAL has adopted a mass customization approach to manufacturing and delivering shirts.
12. Discuss how TAL’s performance and the performance of its customers has improved as a result of TAL’s implementation of MOVEX. Give examples of improvement in specific performance metrics.
13. Describe how the MOVEX system has helped TAL be more defensive in terms of erecting barriers to entry for its competitors. Why can’t TAL’s competitors easily copy the TAL approach?
14. TAL is no longer the “weak” partner in the supply chain. Use the TAL/J.C. Penney relationship to explain why TAL is now the “strong” partner.
15. Now, the point of this article is to give an additional anecdotal example of how ERP systems can be used to develop competitive advantage. Contrast TAL’s competitive position prior to implementation of the MOVEX system with its position after implementation.
16. Discuss the importance sharing information through an ERP system to successful SCM based on what you learned from the Walmart/Bon Ami and TAL articles.

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1. How did Wal-Mart use its ERP system to achieve cost advantage over its competitors?
Walmart used its proprietary exchange network (ERP system) to isolate the non-compliant suppliers and this helped Walmart to achieve cost advantage over its competitors....

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