Walmart’s supply chain Essay
Walmart’s supply chain
Walmart’s Retail Link Supply Chain
1. Where does Walmart’s supply chain start? What triggers Walmart’s Retail Link system to ship goods to local Walmart Stores?
Supply Chain Management (SCM) includes all the activities that must take place to get the right product into the consumer’s hands in the right quantity and at the right time – from raw materials extraction to consumer purchase. It starts from:
The Supplier/Manufacturer Logistics Wholesaler Logistics Distribution Warehouse Logistics Walmart Retailer Consumer
In 1991, Walmart invested about $4 billion to Retail Link System. It connects Walmart’s network with an extranet, accessible to Walmart’s suppliers. The suppliers know exactly how to plan their production and what goods are being sold by using a decision support system that gives the supplier 100 weeks of product sales history and tracks the product’s performance globally and by market. RLS is connected to analysts who forecast supplier demands to the supplier network, which displays real-time sales data from cash registers and to Walmart’s distribution centers.
Companies then synchronize their demand projections under a collaborative planning, forecasting and replenishment scheme. Use of smart tags, read by a handheld scanner, which allows employees to know which items need to be replaced so that shelves are always stocked. This allows for faster inventory turnover, Walmart/Supplier collaboration, acute forecasting of inventory levels.
2. Why is a detailed knowledge of consumer purchases at each store important to Walmart’s success?
Detailed knowledge of the customers is possible thanks to Big data analysis. It is essential for Walmart’s success, because: It offers better services to customers:
Offer products needed by geographically regions:
Know local culture
Product always available; assuring continuous supply
Increase brand equity thanks to amazing service
Achieve top of mind
3. Why can’t other large retailers easily duplicate Walmart’s Retail Link?
The investment Walmart has made in supply chain management and the fact that it has the largest IT system of any private company in the world, makes it a strong global force that other retailers cannot easily duplicate
Walmart’s Business Model is:
Focused on continuously improving operations, lowering costs and improving customer service
Effective managing the supply chain
Leading edge of logistics, distribution, transportation and technology
Unmatched economies of scale
4. Why does Walmart encourage its vendors to learn how to use Retail Link?
Walmart is committed to improving operations, lowering costs and improving customer service. But the key to retailer Walmart’s success is its ability to drive costs out of its supply chain and manage it efficiently Every Walmart store operates like a small company. Store managers are trained to manage one store at a time, one department at a time and one customer at a time.
With established vendor partnerships with top manufacturers, Walmart has implemented advanced logistics solutions like RFID (radio frequency identifications). Walmart offers its online Retail Link software for vendors to enter and review purchase orders, make carrier appointments and get data on consolidated loads. It compiles vendor scorecards to Asses on-time performance and other metrics.