Walmart is one of the greatest logistical and operational triumphs. Americans spend $46 million every hour at Walmart for 24 hours a day and 365 days a year. Walmart operates 11,700 stores under 59 company names, with more than 2.2 million employees in 28 countries.
They hold an average of $32 billion in inventory. With these sorts of numbers, having an efficient and efficient supply chain management strategy and system is essential.
Supply chain management is the supply of correct items to proper customers at the right time by the most efficient means.
When it comes to being the best supply chain, no one does that better than Walmart. Their supply chain model is a standard for service excellence every other business wants to match.
Strategies to gain a competitive edge:
- Fewer links in the supply chain :
Walmart deals directly with manufacturers. In this way, the company saves a lot that would otherwise go to intermediaries, agents, and wholesalers.
These savings are passed onto the customers as part of their everyday low price guarantee.
- Strategic Vendor Partnerships :
Walmart practices strategic sourcing to get products at the best price from suppliers who are in a position to ensure they can meet demand. The company then offers the vendors the potential for long-term and high-volume purchases in exchange for the lowest possible prices.
Thus Walmart holds enormous bargaining power to demand lower wholesale prices from suppliers.
- Cross-docking :
The speed and productivity of a supply chain are the most critical aspects of growth for organizations. Cross-docking is a logistics practice that Walmart uses to replenish inventory efficiently. Goods are transferred directly between inbound or outbound truck trailers without the need for extra storage.
This strategy is put into practice to achieve a competitive advantage. Cross-docking helps reduce inventory and transportation costs, transportation time, and other inefficiencies during operations.
- Investing in Information Technology :
Walmart has the most extensive IT infrastructure of any private company in the world. They have consistently invested in technology to support their supply chain and become an innovator in the way stores track inventory and restock their shelves.
Real-time sales data is displayed from cash registers and to Walmart’s distribution centers. This enables Walmart to forecast demands accurately, track and predict inventory levels, create highly efficient transportation routes, manage public relations, and service response logistics.
Key Takeaways :
- The entire organization is committed to a business model of driving costs out of supply chains to enable consumers to save lots of money and live better.
- A close look at Walmart’s supply chain and inventory operations provides valuable learning points that businesses can take and apply to their operations.
- Their pricing strategy has helped them become a dominant force in a competitive global market.
- Technology plays a key role in Walmart’s supply chain, serving as the foundation of its supply chain strategy.
- Walmart continues to focus on innovative processes and systems to improve its supply chain and achieve greater efficiency.