Monday, September 8, 2014

Technology aids Walmart to become Supply Chain Leader

Walmart, an American Multinational retail corporation, is one of the leading retailers in the world. From home furniture to fresh food, you will find anything and everything. Owning over 11000 retail stores in the 27 countries across the world, Walmart uses technology to be one of the leading stores in supply chain management. 

Walmart is an innovator in the way they track inventory, restock their sales, saving on costs incurred and thus passing the benefits of these to the consumers. Their excellent combination of distribution practices, truck fleet management and technological innovations has set an example of an ideal model of an efficient supply chain.

As per James Crowell, director of the Supply Chain Management Research Center at the Walton College of Business, there is no university in the world which doesn't talk about Walmart and its supply chain. Army Col. Vernon L Beatty, who commanded the Defense Distribution Depot in Kuwait had to work with Walmart for a year as part of training, to understand how efficient a supply chain must be.

Fewer links and incorporating collaboration in the system has helped Walmart to effectively forecast and manage their supply chain. Walmart directly works with the manufacturers, thus eliminating the middle-man and cutting down the supply chain link to avoid confusions and errors.

VMI, Vendor Managed Inventory, an initiative by Walmart's supply chain allows the manufacturers to manage of their inventory. This helps them keep a better track of the sales and thus helps in restocking the shelves sooner and permits 100% order fulfillment for any merchandise.
Cross Docking is another smart concept developed by Walmart. The goods from the incoming vehicles/ trucks will pass on directly to the outbound tucks/vehicles with little or no storage between them. This helps streamline the goods from point of origin to point to sale in the supply chain reducing the time, cost of labor as well as risk of handling inventory. Also any backlog items, which aren't sold can be taken back to manufacturer by the incoming vehicles, thus saving time.

Companies within the supply chain of Walmart synchronize their projected sales through collaborative, planning, forecasting and replenishment system. Every chain in the link is connected by a centralized database system, store-level point of sale system and a satellite system. Walmart implemented the first company wide Universal Product code bar codes, in which all the information like the retail store details is stored. On checkout of any item, this information is collected and sent to the analysts to forecast the demand. Also this information is sent out to all their partners to increase efficiency and transparency. This system has assisted in swift restocking as well as allowing the purchasers to pull rather than the suppliers to have to push their stock.


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