Organizational Overview
Walmart Corporation is a multinational organization in the retrial industry. It is a leader in the retail chains and departmental stores focusing on sustainability, creating employment opportunity and philanthropy. The company was established by Sam Walton in `1972 in Arkansas and has continued to expand its operations to different countries around the world making it the largest organization based on revenues in 2017 according to Forbes magazine.
Material Purchased
Walmart deals with a variety of products ranging from fabrics, school supplies, toiletries, consumables, equipment among others. According to the company's annual report for 2017, the company has three segments which include physical, digital and merchandise. The merchandising segment includes three strategic merchandise units that include grocery consisting of items like meat, produce, deli & bakery, natural and organic, dairy, frozen foods, floral and dry grocery, consumables like health and beauty aids, baby products, alcoholic and non alcoholic beverages, household chemicals, pet supplies and paper goods. Another strategic merchandise unit is health and wellness that includes optical services, pharmacy, clinical services, over the counter drugs and other medical products. General merchandise is the third strategic unit and includes entertainment, hardlines, and apparel, home/seasonal. The variety of items purchased by the company is meant to meet the ever-changing customer needs. The company employs a huge workforce that offers services to its customers.
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Bid and Proposal Documents
Walmart uses two types of bids and proposal documents which include; request for quotation and information document (RFI) and Request for proposal (RFP). RFI is a document for business processes or issued to prematurely to survey the market and explore the available options or choices. The buyer, in this case, asks the supplier to provide relevant information that relates to them. RFP is issued by the company to the suppliers asking them to solve a pending issue or complete a task. It is a solution to propose that comes up with the terms and conditions, the level of compliance as well as the commercials (Christopher, 2016).
Contract Type
Walmart uses two types of contracts in its procurement activities. The two include firm fixed price contract (FFP) and cost reimbursable contracts (CRC). FFP is the simplest form where the company pays a fixed amount to the suppliers irrespective of the costs incurred by the sellers. Walmart purchases its goods at a reasonable price and therefore eliminates any chances of extortion. CRC is a contract that involves the payment of the expenses incurred by the suppliers to deliver the goods. The company uses a cost plus fixed fee where it pays for the cost of purchasing the goods in addition to a fixed transportation fee. Other forms of contracts used by the company include cost plus incentive fee and cost no fee contracts ( Johnson & Flynn, 2014).
Third Party Logistics
It involves the use of third-party companies to fulfill the needs for transport and distribution services. Walmart uses third-party logistics on special occasions since the company has a transport department which oversees the distribution of the company's goods. The company has engaged third-party logistics if it cannot access an area.
Supplier Relationship Management
The success of a supplier relationship management depends on the relationship that exists between the buyer and seller. Walmart has achieved a good relationship by accepting accountability as well as respecting the strategies selected by the supplier. Such a scenario creates an enabling environment that enhances the ability to manage the relationship with the supplier.
Contract Closeout
Walmart ensures that the products and services procured to meet the expected outcome through a standardized test that enhances the quality of the items. Quality testing has enhanced the quality of the product offering for the company. Payments are made once the company confirms that the goods meet the required standards. The company can then present a cheque that evidences the payment and at the right time ( Johnson & Flynn, 2014) .
Maintaining Supplier Performance
Walmart uses supplier performance metrics and supplier audits to manage supplier ‘performance in a contracting period. Some of the concerns are based on the quality of goods supplied, the time needed to supply the good and the effectiveness of the supplier. The company can terminate the contractor to opt not to renew the contract based on the obtained results.
References
Christopher, M. (2016). Logistics and supply chain management . Harlow (England): Pearson.
Johnson, P. F., & Flynn, A. E. (2014). Purchasing and supply management (15th ed.). New York, NY: McGraw-Hill.
Walmart. (2017). Walmart Investor Relations - Investors - Financial Information - SEC Filings. Retrieved from http://stock.walmart.com/investors/financial-information/sec-filings/
