Walmart: Masters of Supply Chain
Lifestyle

Walmart: Masters of Supply Chain

A look into some of the highlights of Walmart's efficient logistics system

666

Walmart utilizes strategic and innovative management of its supply chain in order to reap the financial benefits of efficiency and accuracy within it. To manage its supply chain, Walmart practices extremely tight management and control over manufacturing, inventory, and distribution. The company synchronizes these elements through various electronic interchanges which aid in communication between differing segments of the chain. Although Walmart, like other large firms, outsources many of its products, it employs close relationships with important vendors across the world. These partnerships are crucial, as they deter miscommunications and promote productivity among both entities. For example, Walmart’s relationship with Proctor and Gamble has aided in ensuring swift product replenishment in all of its locations. In addition, Walmart takes advantage of tactics like cross-docking and a hub-and-spoke distribution networks to push goods speedily through the chain. Because supply chains include multiple firms with potentially conflicting objectives, it is possible for issues to arise that negatively impact the company. If Walmart and its vendors do not coordinate their endeavors properly, a bullwhip effect could ensue. This means that a buildup of inventory occurs resulting in decreasing revenue for both retailers and manufacturers. In addition, without proper communication and control in a supply chain, there could be delays in delivering goods or perhaps even quality control problems. One conflict mentioned in the case study centered on Walmart’s suppliers outsourcing without Walmart’s consent or knowledge. When a fire killed 112 workers in one of these subcontracted factories, it reflected negatively on the retailer. Walmart solved this conflict through enacting a zero tolerance policy on suppliers subcontracting. Walmart has been extremely proactive in increasing product availability and lower merchandise acquisition and transportation costs. In the 1980s, Walmart partnered with Proctor & Gamble to build one of the first collaborative planning, forecasting, and replenishment systems. This system linked P&G to Walmart’s distribution centers, so that when inventory levels of P&G products were low, the vendor was alerted to ship more products. In addition, the software allowed Walmart to track when a P&G shipment arrived at a distribution warehouse, which granted the retailer the ability to better plan its shipments to stores. This coordination resulted in savings for both firms and was beneficial to customers, as it allowed for lower prices. Additionally, Walmart drove the adoption of UPC barcodes and pioneered the use of EDI for computerized ordering from vendors, again fostering great efficiency. The retailer is able to ship products from its warehouses to stores within a day’s travel through its usage of hub-and-spoke networking and cross-docking. The goods are transported using a relatively speedy fleet of trucks, and this short travel time makes the company much quicker to deliver merchandise to locations across the world. Walmart was one of the earliest adopters of RFID technology, and today tests its usefulness for apparel products. In the future, if the retailer chooses to expand this technology to other products, it could see a faster flow of goods throughout the chain.

Report this Content
This article has not been reviewed by Odyssey HQ and solely reflects the ideas and opinions of the creator.
Politics and Activism

4 Ways The Plan To Deport International Students Is Dumb, According To An Exchange Student

The whole policy isn't very stay-in-place, if you ask me.

Wikimedia Commons

On Monday, July 6, new federal guidelines were announced that do not allow international students to remain in the U.S. unless they are taking classes in person. Which, if you ask me, is stupid.

Keep Reading... Show less
Entertainment

Naya Rivera Is Missing, And She Deserves SO Much More Than Being Labeled 'Big Sean's' Ex'

We are all sending prayers to Naya Rivera hoping she finds them so we can find her.

I woke up this morning looking to find Naya Rivera's name trending No. 1 on Twitter. I was reading all of everyone's prayers wishing to find her so she can be reunited with her baby boy who is only 4 years old.

Naya's son's name is Lord and the entire collective is hoping the Lord is with him right now. I'm a firm believer in the Fear of God, I hope all of Naya's love is protecting Lord right now.

Keep Reading... Show less

With the coronavirus (COVID-19) pandemic still surging in the United States, where we are averaging 50,000 cases daily, wearing a face mask has become even more important. Dr. Anthony Fauci, the nation's top infectious disease expert, has stressed the importance of wearing a mask and is pleading Americans to take notice of the "disturbing" rise in cases. It would be common sense to listen to him, considering we are dealing with a virus that has a mortality rate higher than what we have seen with other viruses.

Keep Reading... Show less

It's your fairy sex godmother back at it again and here to tell you that masturbating is an essential need, just like toilet paper.

It comes with so many benefits, besides cumming. According to the New York City Health Department, "you are your safest sex partner" during a pandemic, so why not use the best toys to get the job done? Shopping for the best fit can be tricky because there are a few factors to consider — whether it's the price point, experience, sound, and more.

Keep Reading... Show less
Lifestyle

These 3 Smoothies Totally Cleared My Acne-Prone And Scarred Skin

How I drank my way to flawless skin.

With this summer being the first of its kind for most people to be in the midst of a global pandemic, almost everyone is beginning to have an overall focus on improving their health.

Keep Reading... Show less

Everyone remembers the first time they went to one of the Disney parks. Spinning in teacups and having Goofy wrap his arms around my 8-year-old self were some of my fondest childhood memories, and I'm surely not alone in that.

Keep Reading... Show less
Lifestyle

These Superfood Beauty Products Show Kale And Matcha Work For SO Much More Than We Thought

Just another summer's day with a cold glass of kombucha on my face.

I've been vegan for about six years now, so a love for fresh vegetables and superfoods has now become a core part of my being. Don't get me wrong. I love my indulgent, creamy pastas and truffle fries more than anyone. But I keep most of my focus on eating clean and healthy so I can indulge guilt-free.

But I'd say about a large part of my diet has always, unknowingly, included superfoods. Being Indian, lentils, beetroot, garlic, ginger, and whole grains have been core essentials on the family dinner table since I could digest solid foods.

Keep Reading... Show less
Facebook Comments