When we talk about logistics, Walmart comes in our mind. The American multinational retail corporation, that runs chains of large department and warehouse stores. The company that started with a single store and grown to the world’s largest and emulated retailer.
The following words, made the initiative for me to write this post, and talk about this well-known and respected company. “I don’t believe there is a university in the world that doesn’t talk about Walmart and the supply chain,” said James Crowell, director of the Supply Chain Management Research Center at the Walton College of Business. “They are just so well respected because they do it so well.”
Walmart began with the goal to provide customers with the goods they wanted whenever and wherever they wanted them. The company then focused on developing cost structures that allowed it to offer low everyday pricing. Walmart then concentrated on developing a more highly structured and advanced supply chain management strategy to exploit and enhance this competitive advantage and assume market leadership position. The entire organisation is committed to a business model of driving costs out of supply chains to enable consumers to save money and live better.
This is a logistics practice, to replenish inventor. It means the direct transfer of products from inbound or outbound truck trailers, without extra storage. This happens by unloading items from an incoming semi-trailer truck or railroad car and loading these materials directly into outbound trucks, with no storage in between. This is the center piece in Walmart’s strategy. Cross docking keeps inventory and transportation costs down, reduces transportation time, and eliminates inefficiencies.
In its pursuit of low consumer prices, Walmart embraced technology to become an innovator in the way stores track inventory and restock their shelves, thus allowing them to cut costs. Technology plays a key role in Walmart’s supply chain, serving as the foundation of their supply chain. Walmart has the largest information technology infrastructure of any private company in the world.
Suppliers and manufacturers within the supply chain, synchronize their demand projections under a collaborative planning, connected through technology that includes a central database. What made Walmart so innovative, was that it has been sharing all these information with all their partners and back in the days, a lot of companies weren’t doing that. In fact, they were using third parties where they had to pay for that information.
Finally, Walmart streamlined supply chain management by constructing communication and relationship networks with suppliers to improve material flow with lower inventories. The network of global suppliers, warehouses, and retail stores has been described as behaving almost like a single firm.
From all the above we understand, that Walmart’s supply chain management strategy has provided the company with several sustainable competitive advantages, including lower product costs, reduced inventory carrying costs, improved in-store variety and selection and highly competitive pricing for the consumer.
This strategy has helped Walmart become a dominant force in a competitive global market. As technology evolves, Walmart continues to focus on innovative processes and systems to improve its supply chain and achieve greater efficiency.