SUPPLY-CHAIN MANAGEMENT
This store made retail history when its founder Kresge started a ‘Five & Dime Store’ and introduced the world to 
the concept of a discount store. The concept was a super-hit and soon, in just one year, this chain grew to a smashing 63 stores. That was 1963. The same store created history once more when in 2002, it filed for bankruptcy protection. The store was K-Mart.Both K-Mart and Wal-Mart started in the same year; yet, what is it that caused K-Mart to go bankrupt and Wal-Mart to prosper? In certain terms, was the poor supply-chain management of K-Mart, which was the cause for its downfall. Wal-Mart used information technology to keep track of its sales. It knew quickly when to order which product, which product was a best seller, which a loser.
It developed a sophisticated hub & spoke supply-chain system, innovating (then) the global usage of bar code tracking, and (even now) RFID tags. K-Mart, on the
other hand, relied on quasi manual systems. As a result, goods were not ordered & delivered on time. Shelves stayed empty. Managers had very less clue on which goods were doing well, and which weren’t. The outdated technology often resulted in goods sitting in trucks parked behind stores, all because there was no storage space. By 1983, while Wal-Mart was spending only 2 cents per dollar in getting goods into stores, K-Mart was spending a pathetic 150% more. No surprise then that Wal-Mart could offer products at prices that were 3% lower than those offered by K-Mart; this soon eroded K Mart’s customer base substantially.
For Complete IIPM - Article, Click on IIPM-Editorial Link
Source:- IIPM-Business and Economy, Initiative:- Prof. Arindam Chaudhuri - 2006
the concept of a discount store. The concept was a super-hit and soon, in just one year, this chain grew to a smashing 63 stores. That was 1963. The same store created history once more when in 2002, it filed for bankruptcy protection. The store was K-Mart.Both K-Mart and Wal-Mart started in the same year; yet, what is it that caused K-Mart to go bankrupt and Wal-Mart to prosper? In certain terms, was the poor supply-chain management of K-Mart, which was the cause for its downfall. Wal-Mart used information technology to keep track of its sales. It knew quickly when to order which product, which product was a best seller, which a loser.It developed a sophisticated hub & spoke supply-chain system, innovating (then) the global usage of bar code tracking, and (even now) RFID tags. K-Mart, on the
other hand, relied on quasi manual systems. As a result, goods were not ordered & delivered on time. Shelves stayed empty. Managers had very less clue on which goods were doing well, and which weren’t. The outdated technology often resulted in goods sitting in trucks parked behind stores, all because there was no storage space. By 1983, while Wal-Mart was spending only 2 cents per dollar in getting goods into stores, K-Mart was spending a pathetic 150% more. No surprise then that Wal-Mart could offer products at prices that were 3% lower than those offered by K-Mart; this soon eroded K Mart’s customer base substantially.For Complete IIPM - Article, Click on IIPM-Editorial Link
Source:- IIPM-Business and Economy, Initiative:- Prof. Arindam Chaudhuri - 2006
Rashmi Bansal Publisher Of JAMMAG Magazine Caught Red-Handed, for details click on the following links:-
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