Comprehensive Analysis of Supply Chain and Operations Management of

Walton Group Bangladesh

Course Code: MGT 314
Section: 19
Group: 6

Submitted to:
Dr. Iqtiar Uddin Md. Mamun PhD, FCMA
Department of Management, School of Business & Economics
North South University

ID Name
2211807630 Pakija Batul Moon
2132122630 Naina Ludmila Haque
2212821030 Md. Siddiqur Rahman
2132237030 Farhan Hoque
2131095030 Fabiha Kabir

Date of Submission: 5th of December, 2024

 Acknowledgment

In the name of Allah, The Most Merciful and Most Graceful. We express our profound gratitude
for the opportunity to work on this report. We wish to convey our deepest appreciation to all who
contributed to the completion of this report. To our instructor, Dr. Iqtiar Uddin Md. Mamun, for
your guidance, and your endless patience in explaining the report and topics to us. We hope it is
worthy of your time and reflects what you have worked so hard to teach in class. We extend our
gratitude to Mr. Md. Rasel, the Deputy Assistant Director of Walton Supply Chain Management
(Commercial), for dedicating hours of his valuable time to address our enquiries, thereby providing
us with insight into Walton's supply chain and operations. Although a lot of the information was
confidential, he did his utmost to provide as much details as possible. Lastly, to all our group
members who worked tirelessly, a heartfelt thank you.
 Letter Of Transmittal

5th of December, 2024

Dr. Iqtiar Uddin Md. Mamun

Associate Professor, Department of Management, School of Business & Economics

North South University, Bashundhara R/A, Dhaka – 1229

Subject: Submission of Group Report on “Production Management of Walton Group Bangladesh”

Dear Sir,

We, group 6, are submitting our report on Walton group, mainly focusing on their refrigerator line.
In this project, we expand on their mission, vision, goals, strategies implemented, the method they
use to produce their fridges, their quality control measures. We have also conducted a thorough
analysis of their operations, and their efficiency and utilization of raw materials, detailed their
supply chain and procurement process, and provided recommendations where necessary, with
which we concluded our report. We would not have been able to complete this report without your
guidance and motivation. We look forward to your feedback.

Sincerely yours,

Pakija Batul Moon

Naina Ludmila Haque

Md. Siddiqur Rahman

Farhan Hoque

Fabiha Kabir
 Executive Summary

This report explores Walton's missions, vision, goals and strategies to get an idea of what the
company would like to achieve in the future. In addition, we also conducted a thorough operations
performance analysis, and forecasted their demands with the help of Mr. Md. Rasel and financial
reports found online, which gave us ample insight into how they might do their capacity planning.
We used financial reports, news articles, and other information publicly available as a lot of the
materials needed to complete this report remain confidential. However, we were able to learn that
Walton follows a repetitive/mass process type. They also use product layout where all processes
and operations are standardized. Their manufacturing process is done through assembly lines,
where craftsmen are given the job of forging the materials needed to make the fridges.

As a market leader in the refrigerator sector in Bangladesh, Walton's commitment to their product
quality and innovation can be seen throughout their production process. Their continuous research
to grow and develop has made them a credible supplier of home appliances in the eyes of many
consumers. Nonetheless, the opportunity to grow and improve remains as always, and we have
provided some recommendations for Walton to cement itself as the best refrigerator manufacturing
company globally.
 Table of Contents

Introduction ……...………………………………………………………………………......... 01

Mission, Goals, and Strategy……………………………………………………………......... 02

Operations Performance Analysis………………………………………………………......... 04

Demand Forecasting ………….…………………………………………………………......... 08

Capacity Planning …………………………………...………………………………............... 10

Process Selection and Facility Layout……………………………...……………………........ 13

Quality Control at Walton…………………………………………………………….............. 19

Supply Chain and Procurement Processes …...……………………….……………….......... 22

Operational Problems …...…………………………………………….…................................ 27

Recommendations …...………………………………………...…………................................ 29

Conclusion ………………………………………………………………………….................. 31

Appendix …………………………………………...……………………………….................. 32

References ………………………………………...………….……………………................... 36
 List of tables

Table No. Table Name

1 Inputs of Production

2 Productivity Calculations

3 Demand Forecasting & Error Calculation

4 MAD, MSE, and MAPE Calculation

5 Estimation of Product Output and Manufacturing Overhead

6 Utilization and Efficiency Calculation

7 Sales Revenue & Cost of goods sold

8 Fixed Costs

9 Break-even Point Calculation

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Introduction

Walton Bangladesh is one of the leading corporations in Bangladesh. It is well-known for

producing and distributing high-quality household appliances, electrical products, and a range of
industrial solutions. Walton was founded with an emphasis on price, quality, and innovation, and
it has since established a niche for itself in both the domestic and foreign markets. By combining
cutting-edge technology with an understanding of customer needs, Walton continues to elevate the
lifestyle of millions while contributing significantly to the nation’s economic growth. With over
30,000 employees, Walton has become one of the largest employers in Bangladesh, and has opened
roughly 1,000 retail stores under their brand name “Walton”. They also sell their products in China,
India and the United States.

Company Background

Founded in 1977 by S.M. Nazrul Islam, Walton first concentrated on trading before expanding into
electronics production in the early 2000s. The company, which has its headquarters in Chandra,
Gazipur, Bangladesh, is a part of the Walton Group, which also includes a number of companies
serving the automotive, electronics, and other industrial industries. Walton has established itself as
a household name in Bangladesh over the years because of its extensive product line and
continuous dedication to quality. Walton prides itself in being the country’s first-ever and the only
compressor manufacturing factory, since April 2017. With the inauguration of the plant,
Bangladesh became the 8th compressor manufacturing country in Asia.

As of 2024, Walton took over 3 European brands, which has enabled it to produce over 4 million
compressors in a year. Not only that, but they have also acquired the rights to its production plant,
trademark, patent, design and software. With the addition of these Italian brands, Walton may be
able to gain a significant share in European countries.
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Mission, Goals, and Strategy

Mission

Walton’s mission is to empower consumers by offering them superior, cutting-edge goods and
services that improve their daily lives. By combining cutting-edge technology with customer-
focused designs and upholding social and environmental responsibility, the company hopes to
achieve sustainable growth.

Vision

Walton envisions to lead the electronics and appliance sector globally and be known for its
sustainability, innovation, and high quality. It seeks to establish Bangladesh as a center of
technological and manufacturing excellence on the world stage.

Goals and Strategy

Goals:

1. To expand its market share both domestically and internationally.

2. To enhance research and development (R&D) capabilities for continuous innovation.
3. To achieve operational excellence through sustainable practices.
4. To foster a culture of trust and collaboration among employees, partners, and stakeholders.

Strategy:
Walton prioritizes price, accessibility, and technology progress in order to put the needs of its
customers first. Its tactics include making investments in cutting-edge production facilities,
forming strategic alliances to break into international markets, and launching campaigns to support
environmentally friendly goods and methods.
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Product Portfolio

Walton boasts an extensive product portfolio, catering to diverse consumer needs. Its offerings
include:

● Electronics: Televisions, air conditioners, refrigerators, washing machines.

● Home Appliances: Microwave ovens, blenders, electric kettles.
● Industrial Solutions: Compressors, generators, and heavy machinery.
● Automobile Division: Motorcycles and electric vehicles (EVs).
● IT Products: Smartphones, laptops, and computer accessories.

This diversity has made Walton a one-stop solution for a wide array of consumer and industrial
requirements.

Market Presence and Distribution

Walton has a robust presence in Bangladesh with a vast network of retail outlets, dealers, and
service centers spanning urban and rural areas. Internationally, Walton has expanded to over 40
countries across Asia, Africa, Europe, and the Middle East. Its comprehensive distribution strategy
ensures timely delivery and after-sales service, fostering customer loyalty.

Quality and Commitment

Walton adheres to worldwide standards, such as ISO certifications, and places a high priority on
quality assurance at every level of production. The company's in-house research and development
team is always coming up with new ideas to enhance the design, durability, and efficiency of its
products. Walton's dedication to quality is demonstrated by its warranty programs, customer
service guidelines, and initiatives to provide environmentally friendly products that support
international sustainability objectives.
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Operations Performance Analysis

Walton Bangladesh follows a strict set of operations strategies, which allows it to maintain its
operational excellence and its competitive edge. This can be observed through their market share,
which stands at around 68-75% roughly in the refrigerator sector. Their main focus is on cost
efficiency, innovation and quality management.

Cost Leadership Strategy: Walton manufactures a majority of its products in their factory in
Gazipur. While many of their parts are sourced locally, a large bulk is bought from countries that
specialize in such materials, for example South Korea. When Walton buys these materials in bulk,
they benefit from economies of scale, which drives their costs down. Not only this, but Walton
continuously optimizes their manufacturing process to reduce waste and downtime, thus allowing
them to ensure maximum efficiency.

Vertical Integration: A lot of their small components (such as screws and bolts) as well as larger
parts (such as compressors, motors, plastic parts) are produced in-house. While they do source raw
materials from outside, they follow a vertical integration model which means that they are in
charge of their entire production process: from raw materials to the final product assembly. As a
result, they are not depending on external suppliers and don't have to deal with price fluctuations,
and can oversee the product quality entirely.

Product Innovation: All of their hard work is only possible due to their continuous research and
development. Walton invests extensively in research and development which also allows them to
be market leaders. Through their research, they have made energy-efficient products, smart
appliances and adopted environmentally friendly green manufacturing processes where they use
environment-friendly gases, reduce waste and recycle any waste materials. Along with this, they
always listen to their customers' feedback, incorporating it into their products so they can adapt to
local demands as well as global preferences.
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Quality Management and Control: Walton employs quality control measures at every stage to
meet international quality standards. Two of the main measures they use are: Six Sigma and TQM
(Total Quality Management) to reduce defects and ensure high product reliability. Their products
also go through intense checking to ensure the durability, energy efficiency and safety of the
products being shipped. All their products are required to meet relevant certifications. If there is
anything faulty, Walton provides after-sales services, which is their key differentiator and explains
why they have such high customer satisfaction and loyalty.

Distribution Network: Walton operates over 70 branches all across Bangladesh, which means
their distribution channel needs to be well managed: they need to ensure that their products can be
readily and easily available and accessible to the customers in all parts of the country, be it urban
or rural. If customers wish, they can also order their products online and Walton will take the
responsibility of delivering the product to the customer, to ease the process of procuring their
goods. The only down-side with this is that the customer is not able to see the products face-to-
face.

Sustainability and Environmental Responsibility: Walton boasts a wide range of eco-friendly

products that aims to use energy-efficient resources, as a result, their refrigerators and air
conditioners consume less electricity. Their inverter technology eliminates wasted energy, as the
compressor speed is slowed down once the desired temperature is reached. They also adhere to
environmentally sustainable manufacturing practices. They do this by reducing their carbon
emission, using recyclable materials in their products and packaging, thus minimizing waste. They
also use solar energy and other renewable resources.
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Productivity: The productivity calculations for Walton are given below:

Month Output Labor cost Machine cost Material cost Manufacturing

overhead

Jan-Feb 362,100 434,520,000 1,275,000,000 2,172,600,000 299,307,545

Mar-Apr 386,240 463,488,000 1,275,000,000 2,317,440,000 319,261,382

May-Jun 458,660 550,392,000 1,275,000,000 2,751,960,000 379,122,891

Jul-Aug 434,520 521,424,000 1,275,000,000 2,607,120,000 359,169,054

Sep-Oct 410,380 492,456,000 1,275,000,000 2,462,280,000 339,215,218

Nov-Dec 362,100 434,520,000 1,275,000,000 2,172,600,000 299,307,545

Table 1: Inputs of Production

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productivity = output/single input.

Multifactor productivity = output/multiple input.

Month Labor Machine Material MOH Total

productivity productivity productivity productivity

productivity

Jan-Feb 0.00083 0.000284 0.00017 0.0012 0.0000866

Mar-Apr 0.00083 0.000302 0.00017 0.0012 0.0000883

May-Jun 0.00083 0.000359 0.00017 0.0012 0.0000925

Jul-Aug 0.00083 0.000341 0.00017 0.0012 0.0000912

Sep-Oct 0.00083 0.000322 0.00017 0.0012 0.0000898

Nov-Dec 0.00083 0.000284 0.00017 0.0012 0.0000866

Table 2: Productivity Calculations

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Demand Forecasting

Walton boasts a diverse product range, offering direct-cool fridges, non-frost fridges, freezers for
beverages and also industrial use. Their demand for products usually fluctuates but not by much.
People buy more refrigerators around Eid-ul-Adha, and Eid-ul-Fitr, both of which typically fall in
Summer in Bangladesh, which could also explain the spike in demand as temperatures can rise as
high as 40 degrees Celsius. The forecasting calculations are given in the table below:

Month Actual Naive Error |Error| (Error)2 (|Error|/A)

demand forecast * 100

Jan-Feb 362,100 — — — — —

Mar-Apr 386,240 362,100 24,140 24,140 582,739,600 6.25%

May-Jun 458,660 386,240 72,420 72,420 5,244,656,400 15.79%

Jul-Aug 434,520 458,660 -24,140 24,140 582,739,600 5.55%

Sep-Oct 410,380 434,520 -24,140 24,140 582,739,600 5.88%

Nov-Dec 362,100 410,380 -48,280 48,280 2,330,958,400 13.33%

Total 193,120 9,323,833,600 46.80%

Table 3: Demand Forecasting & Error Calculation

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MAD 32,187

MSE 1,864,766,720

MAPE 7.8%

Table 4: MAD, MSE, and MAPE Calculation

Jan-Feb 15% = 362,100 [299,307,545]

Mar-Apr 16% = 386,240 [319,261,382]

May-Jun 19% = 458,660 [379,122,891]

Jul-Aug 18% = 434,520 [359,169,054]

Sep-Oct 17% = 410,380 [339,215,218]

Nov-Dec 15% = 362,100 [299,307,545]

Table 5: Estimation of Product Output and Manufacturing Overhead

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Capacity Planning

Utilization and efficiency: Utilization measures how effectively a company is able to make use
of their productive resources when producing (output). Through this, we can paint a picture to
describe how effectively the volume of labor, machinery, raw materials like steel, plastic, metal
etc. are being used when making refrigerators.

Efficiency equals output divided by input, which tells us how much input is needed to produce one
unit of output. If a company is efficient, they would need minimum input to produce a high amount
of output. A high volume of output can be achieved by either increasing input, or minimizing waste,
idle time, and machine breakdowns, and simplifying operations, which is one of the best ways to
be more profitable. As we are learning supply chain management, we quickly gained an
understanding of how important Efficiency is, as it impacts nearly all facets of operations: be it
profitability, customer satisfaction, reducing lead time or decreasing waste, all of these aspects are,
without a doubt, tied to efficiency.

Months Design Effective Actual Utilization Efficiency

capacity capacity output

(Actual output/Design (Actual output/

capacity) *100 Effective capacity)

*100

Jan-Feb 420,000 410,533 406,140 96.70% 98.93%

Mar-Apr 420,000 410,163 406,266 96.73% 99.05%

May-June 420,000 415,147 413,154 98.37% 99.52%

July-Aug 420,000 411,166 408,576 97.28% 99.37%

 P a g e | 11

Sep-Oct 420,000 410,087 406,560 96.80% 99.14%

Nov-Dec 420,000 408,442 403,704 96.12% 98.84%

Table 6: Utilization and Efficiency Calculation

The table demonstrates the utilization and efficiency rate of Walton from January to December of
2023. The table shows that January's utilization and efficiency rates were 96.70% and 98.93%,
respectively. Utilization and efficiency rates remain constant more or less throughout the year.

Break-even Calculation:

Sales Revenue BDT 51,082,385,139

Cost of goods sold BDT 31,601,795,276

Table 7: Sales Revenue & Cost of goods sold

Administrative Expense BDT 1,059,020,001

Selling & distribution expense BDT 5,639,592,301

Manufacturing Overhead BDT 1,995,383,635

Total Fixed Expense BDT 8,693,995,937

Table 8: Fixed Costs

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Production of Walton freezers and refrigerators in 2023 was 2,414,000 units.

Selling Price Sales revenue/quantity BDT 51,082,385,139/ BDT 21,160

produced 2,414,000 Units

Variable cost Cost of goods sold / BDT 31,601,795,276/ BDT 13,091

quantity produced 2,414,000 Units

Break-even point Fixed cost / (selling BDT 8,693,995,937/ 1,077,457 Units

price – variable cost) BDT (21,160 –

13,091)

Table 9: Break-even Point Calculation

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Process Selection and Facility Layout

Process Type: Walton follows a repetitive/mass process. They produce a high volume of freezers
and refrigerators with some variations depending on the model of the freezers and refrigerators.
Their manufacturing process is repetitive in nature, and they need skilled labor because most of
their production work is done by machines.

Layout type: Walton utilizes product layout, where all processes and operations are standardized,
through this, they manage to achieve a smooth, quick, and high-volume production flow. Not only
this, but product layout allows Walton to reduce the cost of labor, as well as the movement of
material since the work stations and equipment are located along the line of production, creating
the opportunity for a more streamlined and effective assembly process. Walton makes use of
assembly lines to manufacture refrigerators, wherein every station is given a particular task/step
that they need to complete. These tasks are: mounting doors and hinges, installing compressors,
wiring electrical components, insulating and sealing units, and performing final quality checks,
amongst other things. In this manner, the company is able to add value through the different steps
in the assembly line till the product is complete, simultaneously reducing lead time.

Manufacturing process: In the assembly process, craftsmen are given the job of forging and
welding the metal body, molders shape the plastic interiors of the refrigerator, they also install
important functional components like the temperature controls, lighting, and ice dispenser. They
also add key components such as: the compressor, condenser, evaporator, and expansion device,
amongst other things.

Once this task is completed, every refrigerator must pass through testing to confirm whether all
functions are working properly: the safety, functionality, and energy efficiency being some. At last,
the fridges are packaged for shipment.

It must be noted that while different materials are required to produce commercial vs. industrial
refrigerators, at its core, some of these components are the same, especially the stainless steel,
 P a g e | 14

which is used to produce the outer skin of the device. This is used because stainless steel is durable,
can be cleaned easily, and has an aesthetic appeal. Manufacturers also use insulation materials in
the form of foam insulants like polyurethane. These are used between the inner and outer layers of
the fridge. It helps to keep the cold temperature inside, protecting the inside from outside air.

Manufacturers also integrate copper and aluminum parts in the fridge. Copper is used for tubing
the tanks since it has good thermal conductivity and is resistant to corrosion. Aluminum is used to
manufacture the coils and fin, which is responsible for helping transfer heat and maintain the
desired temperature. They use aluminum since it is lightweight and low-cost. Next, the
manufacturers make gaskets with PVC or silicone, which forms a seal when the fridge door is
closed, stopping the cold air from escaping.

Every component is essential in the manufacturing process because if even one part is missing, the
fridge will not function optimally, resulting in unhappy customers. Walton is committed to
providing its customers with world-class refrigerators in Bangladesh, hence their immense care
and attention to detail when it comes to manufacturing.

Figure: Facility layout

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Material Sourcing

Refrigerators are typically made from a combination of metal and plastic. Steel is often used for
the body and shelves, while plastic is used for the interior lining and compartments.

Outer shell

Sheets of metal are cut and welded together to form the outer shell, which is then painted.

Inner cabinet

Plastic liners are made using a vacuum forming process. The plastic is heated, clamped, and pulled
into a mold using a vacuum. The plastic is then trimmed and ready for assembly.

Installation

The refrigerant, water, and electrical wires are installed within the inner cabinet and connected to
the mechanical parts. The compressor and storage tank for refrigerant are assembled with the back
panel. The doors are installed and fitted with seals.

Features

Features like temperature controls, lighting, and ice makers are installed.

Testing

The refrigerator is tested for safety, functionality, and energy efficiency.

Packaging

The refrigerator is packed with foam and boxes and shipped to distributors.
 P a g e | 16

Assembly Line Balancing: Walton appoints a repetitive or mass production process. This means
that they have established a standardized production line and workflow to produce a large volume
of fridges efficiently. While most of the goods are homogenous, they have different product lines
for the refrigerators and changes are made accordingly in the assembly line. Each product line has
its own assembly line.
 P a g e | 17

Figure: Welding & Assembly

Figure: Insulation & Sealing

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Figure: Compressor Installation

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Quality Control at Walton

Walton has established a name in the market due to the integration of quality control processes,
which reflect the global standards in electronics. Innovative in design and reliable in their products,
Walton ensures that every refrigerator goes through a very thorough quality assurance process.
This assures durability, energy efficiency, and adherence to international safety standards. Walton
maintains ISO 9001:2015 certification, proving its commitment to quality and customer
satisfaction.
The following discusses the detailed quality control procedures Walton follows for refrigerators,
integrating insights from manufacturing practices and innovative technologies:

Raw Material and Component Inspection

Walton maintains a strict sourcing policy for raw materials, including 100% copper condensers,
eco-friendly R600a refrigerants, and high-grade plastics. These materials are sent for chemical and
physical tests in their laboratories. For example, copper parts are analysed for conductivity and
anti-corrosion, which will ensure energy efficiency and durability. Outsourced components, such
as compressors and electronic circuits, go through a series of dimensional and performance checks
upon arrival. Only those that meet Walton's standards are cleared to enter the assembly line.

Component and Subassembly Testing

Key subassemblies, including tubing and compressors, are tested for specific purposes:

• Pressure Testing: Tubing that will transport refrigerants is tested with nitrogen gas
to identify any leaks. This ensures the integrity of the refrigeration system.
• Antibacterial Coating Verification: Nano Silver Technology applied to interior
surfaces is tested for uniformity. This feature eliminates harmful bacteria and
extends food freshness.
• Energy Efficiency Checks: Testing and checks on compressors regarding
compliance with energy-saving standards are performed according to BDS
1850:2012.
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Assembly Line Inspection

Walton does automate and manual inspections at every stage of assembly:

• Welding and Painting: The sheet metal parts are welded and painted using eco-
friendly paints. Paint layers are checked for uniformity and durability.
• Structural Integrity Checks: At every stage, the units are manually checked to
verify the exact alignment of different parts, including hinges, doors, and inner
compartments.

IoT-enabled refrigerators undergo further testing to establish remote operability and seamless
connectivity with the app.

Systematic Performance Testing

Following is some of the performance tests conducted on finished refrigerators:

• Temperature Uniformity Tests: Thermometers installed in different

compartments of the refrigerator measure the cooling efficiency; any deviation
from the optimum range is marked for correction.
• Durability Stress Tests: Units are exposed to simulated real-world conditions,
including extreme temperatures and voltage fluctuations, to ensure reliability in
diverse environments.
• Noise Level Testing: Compressors are tested for their operation according to
acceptable sound levels.

Refrigerant and Leak Testing

Walton uses nitrogen gas to trace leakage. After its assembly, the refrigeration system is filled with
the refrigerant charged with high pressure, and the charged systems are again checked by pressure.
The sensors provide evidence of no leak into the systems.
 P a g e | 21

Packaging and Pre-delivery test

Before shipment, the refrigerators are packed using materials that can resist damage during
transportation. Each unit is inspected for aesthetic and functional integrity, including accessories
like shelves and crispers being securely in place.

Certifications and Batch Testing

Walton maintains compliance according to ISO and RoHS (Restriction of Hazardous Substances
Directive) standards, reinforcing environmental and safety commitments. Random batch tests
ensure consistency in quality for the production lines. Tests on prototypes are also given at
academic institutions such as BUET for independent external validation.
 P a g e | 22

Supply Chain and Procurement Processes of Walton Group Bangladesh

Walton Group Bangladesh (WGB) is one of Bangladesh's flagship companies. It started operating
in 1977 and manufacturing refrigerators in 2008 after establishing the manufacturing plant in
Chandra Gazipur. Since then, it has grown into a family of 35,000+ employees with 22 production
lines. With a global presence in more than 40 countries, it is now well-established that Walton, the
Bangladeshi conglomerate, is a dominant player in the electronic appliances market.

Among WGB’s extensive portfolio, this report focuses on refrigerators and freezers. WGB holds
a sizable local market share (66-75%) regarding refrigerators (Chakma, 2022). Given its
dominance over the local market, it is imperative to understand WGB’s supply chain and
procurement process to get an oven-backed, in-depth understanding of how to establish a
sustainable business model successfully.

Supply Chain Overview

WGB’s refrigerator supply chain integrates multilayered operational states, ensuring the economic
transformation of raw materials to finalized processed products. Such a structured supply chain
works synergically, bringing a seamless procurement flow to after-sales services.

Procurement of Raw Materials

WGB sources the war materials from both indigenous and global suppliers. Such a practice serves
them twofold. First, incorporating local supplies reduces costs (i.e., money and lead time). Second,
high-quality, specialized inputs are ensured by maintaining international partnerships. Such a
collaboration with international suppliers also enables WGB to take advantage of international
exchange rate fluctuations. The use of local and global suppliers is supported by Resource
Dependency Theory (Pfeffer & Salancik, 1978). Such a hybrid reliance ensures that WGB remains
insusceptible to vulnerabilities caused by reliance on only external suppliers. Additionally, WGB
balances production lead costs by maintaining local partnerships (Williamson, 1981).
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Manufacturing

WGB, for the last five decades, has been changing the horizon of the manufacturing industry.
WGB has the most modern facilities designed for high-volume production, ensuring their capacity
matches the customer demand. WGB’s primary manufacturing facility for refrigerators is located
at its headquarters in Chandra, Gazipur, Bangladesh. This avant-grade plant is recognized as one
of South Asia's most sophisticated manufacturing facilities. WGB introduced the country's first-
ever compressor manufacturing plant to increase its manufacturing capabilities in 2017. This
inclusion of compressor manufacturing capabilities enhanced Walton's vertical integration (Porter,
1985) by allowing superior control over the production line of their refrigerators. WGB’s focus on
efficiency and waste reduction aligns with lean principles, ensuring high-volume, cost-effective
production (Womack & Jones, 1996).

Distribution and Logistics

WGB utilizes centralized warehouses and regional hubs to develop a robust distribution network.
WGB affirms its nationwide presence with 642 Walton Plaza outlets and 21,000 Points of Sales
(POS). These facilities ensure far-reaching networks of dealers, sub-dealers, and distributors
catering to urban and rural markets. A centralized warehouse system controls the distribution of
refrigerators across retail outlets and POS. This setup minimizes delivery lead times and provides
faster restocking capability. To tackle poor transportation systems, especially in rural areas, WGB
employs a fleet of dedicated vehicles with advanced tracking systems and route optimization tools,
reducing delivery delays. WGB also exports its refrigerators to over 20 countries. To facilitate this
global expansion, WGB ensures compliance with international standards, rules, and customs
requirements for product quality, safety, and environmental compliance. Close and structured
collaboration with customs authorities ensures the streamlining of the clearance process, focusing
on shipping-related cost reduction and faster clearance of the product. WGB incorporates detailed
documentation and compliance audits to ensure its cross-border operations remain clutter-less,
smooth, and uninterrupted.
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Retail and After-Sales Service

WGB employs customer-centric retail policies that prioritize customer accessibility and
satisfaction. Along with the 642 Walton Plaza, WGB offers 17,000 additional nationwide outlets.
These facilities provide a direct platform for consumers to explore, learn about, and purchase the
desired refrigerator. Further, WGB utilizes e-commerce platforms offering a quick purchasing
option in the comfort of a home. WGB offers regular campaigns, seasonal discounts, and loyalty
programs to attract consumers from all social clusters. Such emphasis on customer loyalty is
encouraged by the Customer Relationship Management (CRM) Theory (Chen & Popovich, 2003).

To develop customer loyalty, WGB critically focuses on after-sales services. They offer extensive
warranties and maintenance services, enhancing customer value. WGB has 81 service points
countrywide, reflecting its commitment to comprehensive, smooth customer service and
maintenance facilities. These service points are equipped with skilled technicians, warranting
reliable repairs. Dedicated helplines and digital platforms enable consumers to reach for assistance.
Active feedback mechanisms are placed to make informed decisions to improve service quality.

From the above description, it can be said that the WGB supply chain is a well-integrated and
multifaceted system that ensures flawless production that meets demand.

Potential Challenges and Solutions

One major pitfall of WGB’s supply chain is the poor infrastructure in rural regions, which hampers
transportation efficiency. Those areas' lack of proper infrastructure significantly increases
operational costs and delays product delivery. Introducing regional warehouses could be a potential
solution to this major problem. With the help of AI-based supply chain management, regional
warehouses could be connected to the central hub, maintaining a smooth flow. Additionally,
regional warehouses could be connected to local logistics providers as the last-mile delivery
solution--a strategy to efficiently and effectively deliver goods from regional centers to the final
destination, i.e., consumers’ homes (Pahwa & Jaller, 2022).
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Another potential challenge WGB might face is the growing demand for eco-friendly technology
imposed by international markets. It is high time WGB started investing in transitions to
sustainable technology for their refrigerators. The principles of corporate social responsibility can
focus on economic, social, and environmental responsibility to create a synergy of operational
efficiency and global sustainability goals (Elkington, 1999). Additionally, sustainable supply
chain management principles such as a prolonged life cycle of the raw materials, smooth
collaboration of the stakeholders, ethical sourcing, and recycling of the raw materials can be
followed to reduce the negative environmental impact of WGB’s supply chain activity (Pagell &
Wu, 2009).

Walton’s Procurement Strategy

WGB designed its procurement strategy to optimize costs, uphold quality, and maintain a resilient
supply chain.

Diversified Sourcing

As mentioned, the dual-sourcing strategy allows WGB to balance production costs. Using local
resources, WGB ensures quick adaptability to fluctuating demands and adversity in cross-border
operations. This approach makes WGB less susceptible to geopolitical or global economic
disruptions risks.

Cost Optimization

Cost optimization is a critical component of WGB’s procurement process. WGB sources key
components of refrigerators locally, allowing them to reduce component import-related costs.
Being the major shareholder of the market, they have the liberty to make bulk orders, allowing
them to negotiate favorable pricing. This allows them to offer a competitive price per unit by
reducing the production cost.
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Quality Assurance

In addition to utilizing dual sources for raw materials, WGB focuses on quality assurance, as it
directly impacts the performance and reliability of its refrigerators. Rigorous audits ensure
materials’ reliability and compliance with international standards and certifications. WGB utilizes
a feedback loop between manufacturing and procurement departments to refine and improve the
quality of materials.

Risk Management

WGB employs a proactive approach to mitigate supply chain-related risks. The dependency on
dual raw material sources allows it to avoid over-reliance on any specific supplier or region, thus
overcoming the constraints imposed by economic instability and natural or human-made
cataclysmic events. WGB also maintains safety stock levels to safeguard against unexpected
delays.

Potential Challenges and Solutions

Although the dual-source procurement system helped WGB fight many adversaries, high reliance
on the international market for major raw materials such as refrigerants may impose potential risk
due to currency fluctuations and other geopolitical activities. Disruption in the procurement from
the global market may cause delays, even production halts, causing major damage to the WGB.
It’s high time WGB started investing in manufacturing facilities to make its dependency on the
global market near zero. Until this goal is fully achieved, AI-based predictive analytics can forecast
procurement needs and leverage buffering systems to have enough materials stocked to keep the
production line running.

In conclusion, the WGB supply chain and procurement process is a perfect example of a
well-structured and competent model that qualified it to become the industry leader. With a robust
dual-sourcing strategy, advanced transport system, superior quality assurance techniques, and a
strong focus on after-sales customer service and risk management, WGB addresses challenges and
positions itself for sustainable growth in domestic and international markets.
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Operational Problems

Limited Integration of Environmental Sustainability Practices

Walton’s production processes are not environmentally sustainable enough to meet global
standards. The company has slowly adopted eco-friendly refrigerants, recyclable materials, and
energy-efficient methods. Slow adaptation to eco-friendly methods and practices affects their
ability to attract environmentally conscious customers who prefer greener options and customers
who are concerned with regulations regarding environmental sustainability. The lack of focus on
renewable energy usage in factories further adds to their environmental impact.

Inefficiencies in Supply Chain Management

Walton’s supply chain has several weaknesses, especially delays and higher transportation costs in
rural areas due to poor infrastructure. Demand forecasting is not precise enough, and inventory
management is inefficient, causing mismatches between what customers need and what is
available. These issues slow deliveries and increase costs, making maintaining a smooth supply
chain across all regions harder.

Insufficient Adaptation to International Market Preferences

Walton struggles to adapt its products and strategies to meet the demands and needs of new
international markets and compete with global brands. Walton often fails to address specific
customer preferences, regulatory requirements, and pricing expectations created by regional
differences. This limits their ability to compete with global brands and expand into different
markets. Without proper customization and market research, their international growth remains
restricted.
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Inconsistent Quality Assurance Processes

Walton cannot consistently ensure high production quality even while implementing good quality
checks, resulting in defective products caused by inconsistent production quality. This results in
customer dissatisfaction and damages the brand’s reputation. These quality issues also make it
harder for Walton to meet international standards, limiting their success in global markets where
quality is a top priority.

Underdeveloped Digital and E-Commerce Infrastructure

Despite the growing demand for online shopping, Walton is lagging in its digital presence and e-
commerce strategies. Walton can miss opportunities to attract more tech-savvy customers due to
its Lack of advanced online platform features like product demos and virtual showrooms. Weak
online marketing also limits their ability to engage with buyers effectively. This makes it harder
for Walton to compete in the increasingly digital shopping world.
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Recommendations

Invest in Sustainable Manufacturing for Refrigerators

Walton should focus more on making their refrigerators environmentally friendly. This can be done
using eco-friendly refrigerants and recyclable materials and getting certifications like ISO 14001
to meet global environmental standards. They can also use renewable energy, like solar power, in
their factories and work on reducing energy waste during production. Besides, Walton has
partnered with the Ministry of Environment, the UNDP, and Forest and Climate Change to phase
out HFCs in refrigerators. This helps them align with environmental standards set by global
organizations. These steps will not only help Walton attract more eco-conscious customers but also
reduce its negative impact on the environment. It will also help them compete better in markets
where environmental rules are strict.

Optimize the Supply Chain Process

Walton should use AI-based tools to better manage their supply chain. These tools can help predict
demand, manage stock more efficiently, and reduce risks. For example, they can prepare better for
times when demand is higher, like during Eid, by using predictive analytics. These systems will
also help solve delivery problems in rural areas and save time and money. These improvements
will help Walton keep their supply chain running smoothly and handle challenges effectively.

Expand Global Market Presence

To seize an excellent opportunity to expand globally, Walton has recently acquired European
brands to broaden its reach in international markets. Walton should adapt their products to fit the
needs and preferences of customers in places like Europe, Africa, and the Middle East to make the
most of these acquisitions. Walton can expand into new territories and create different revenue
streams by establishing trade partnerships with local distributors and producing products with
international preferences. This will help Walton reduce dependency on domestic markets and
increase its international competitiveness.
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Strengthening Quality Assurance

Walton should take extra steps to ensure their products are of the highest quality. Walton can use

systems like Total Quality Management (TQM) and Six Sigma to help reduce defects and improve

reliability. Testing products for durability, energy savings, and safety will help Walton meet global

standards. Investing more in research and development can lead to better designs and performance.

Collecting customer feedback can help Walton fix any issues and improve products over time,

while regular checks and audits can maintain quality across all stages of production.

Expand Digital Marketing and E-Commerce Platforms

Walton should capitalize on the growing demand for online shopping by strengthening its e-
commerce presence. Partnering with global e-commerce giants and developing localized digital
marketing campaigns can increase reach in new online markets. Introducing virtual showroom
experiences and product demonstrations will give customers an immersive shopping experience,
building trust and growing online sales.
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Conclusion

This report expands on Walton’s refrigerators’ supply chain as well as their operations management
strategies. The company puts heavy emphasis on their operations performance analysis, through
which they are able to reduce cost, improve distribution networks, manage and control the quality
of their products through TQM, which reduces defects and finds ways to be more environmentally
friendly and sustainable. Moreover, we explore their productivity and efficiency, demand
forecasting methods. Walton's model showcases a well-rounded approach to their operations. They
employ assembly line balancing, check for defects and mistakes at every stage, and put their
fridges through heavy use and testing. While they do face some challenges getting their products
to rural areas in Bangladesh due to infrastructural issues such as bad roads, they can easily solve
these issues by opting for regional warehouses. Without a doubt, Walton Bangladesh is on its way
to be a global leader in the refrigerator market. They are well-positioned for sustainable growth,
and may soon be able to achieve their vision of being the global electronics and home-appliance
leader in the world.
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Appendix

Visiting Card:
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Walton Group Bangladesh’s Organizational Chart: