Thursday, January 24, 2013

What made Walmart the World’s #1 Retailer.

In today’s world, speed and productivity of an organization’s supply chain plays an important role in its growth. From using state of the art technology such as RFIDs or SAP SCM modules which provide end to end solution to using tried and tested techniques like the Ford Assembly line and the Toyota Production System, organizations these days use all the tricks of the trades to speed up their whole logistics process, right from procuring goods to distributing them.  Cross-docking is one of such strategy. It refers to moving products from a supplier or manufacturing plant and delivering it directly to the customer with almost negligible material handling in between or storing in warehouses.

Cross-docking mainly takes place in distributing docking terminals where goods from incoming trucks are unloaded and then loaded directly into outbound trucks with minimum or no storage in between and delivered to variety of destinations. Cross-docking synchronizes inbound product flow of goods with outbound product flow, thus eliminating storage of inventory and essentially transforming warehouses from storage nodes to transfer nodes. Organizations having “hub and spoke arrangement” for their supply chain often use cross-docking to minimize time and cost and to increase their efficiency.

Cross-docking has many advantages like, the supply chain is streamlined from point to point making the product move more quickly and efficiently, handling costs and storage space is reduced and deliveries are performed more rapidly, warehousing costs are reduced or eliminated and also there are fewer losses due to spoilage or excessive handling. Walmart, the world’s biggest retailer first popularized cross-docking and was able to effectively leverage their ‘logistical volume into a core strategic competency’ by using this method in its supply chain. Currently Walmart delivers about 85% of its merchandises using a cross-docking system. Due to combination of advantages that cross-docking services offered, Wal-Mart has managed to keep more products moving, at a substantially reduced cost. Thus the efficiency, cost-savings and logistical advantages of cross-docking have played an important role in making Walmart the world’s #1 retailer.


  1. Can a small player having less resource compared to Walmart i.e. minimal transport fleet and almost negligible computerized system emulate Walmart’s success or is having sufficient resources essential for using cross-docking system successfully?
  2. Can we say that the famous Dabbawalahs of Mumbai have been unknowingly using cross-docking as their distribution method?

"Cross-docking." Wikipedia. Wikimedia Foundation, 01 May 2013. Web. 24 Jan. 2013.
"Case Study: Why Wal-Mart Implemented Cross-Docking for Supply Chain Success." Crossdock Manitoba The Distribution Solution Raquo. N.p., 13 Dec. 2012. Web. 24 Jan. 2013.
"About Us." What Is Cross-docking – Understanding the Concept & Definition. N.p., 23 Dec. 2011. Web. 24 Jan. 2013
"Cross Docking in The Warehouse." Logistics / Supply Chain. N.p., n.d. Web. 24 Jan. 2013

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