Walmart’s Supply Chain Innovation

Walmart’s supply chain innovation involves unnecessary links in the chain; the company has worked directly with all manufacturers and minimize third parties’ involvements which helps reducing cost affiliated to supply chain (Walmart.com). Walmart has successfully used the Vendor Managed Inventory (VMI) to shift the responsibility of products management on the manufacturers instead of taking on all the liability on themselves. Using this method, Walmart almost always deliver 100% order fulfillment on merchandise (Lu, 2018)

In Russia, one of the biggest threath for a company like Walmart, is the cost of labor. It well known that Walmart is competing on price; meaning they are trying to provide their customers the most for their dollar; for them to do that the company has to always maintain all cost as low as possible accross the board. The biggest factor for this threat is social security taxes (50%). In Russia, the employers pay all their employees taxes. The average social security tax is rated at 35.60% which employers have to pay on behalf of all their employees (TradeEconomics.com); compared to the U.S where employers are obligated to pay only part of their employees social security taxes. Another factor is the cost affilated with employees benefits (30%); unlike in the U.S , it is obligatory for employers to offer benefits such as pension insurance, accident insurance and other benefits to their employees at no charge . Last factor, which also weight the least, is the strict employment legislation that make it almost impossible to dismiss or lay off employees. In the last recent years, it has been very common for companies to outsource their jobs. Many compagnies in the U.S have layed off their employees; often because they have found cheaper labor in countries such as Indian. Meanwile in Russia, it is seen as illegal to fire or lay off an employee with our valid and credited reasons; and I am almost certain cutting cost would not be considered