11/21/2023 0 Comments Walmart inventory systems summary![]() The result is a digital vendor-managed inventory system called Retail Link® that gives suppliers access to real-time store-by-store point of sale data, whether they are making furniture in China or frozen food in California.Īnalysts working for suppliers don’t just react to falling inventory levels, they forecast demand patterns-which are ultra-stable due to Walmart’s Everyday Low Prices policy of avoiding seasonal sales-and collaborate with other suppliers and with Walmart to decide when to ship products to Walmart distribution centers.Īnd benefits beyond avoiding out-of-stocks are made possible by the system’s openness and collaboration with suppliers. Over time, advances in IT made it possible to share so much timely data with vendors that the company could relieve itself of the cost of managing its own inventory. Walmart began dealing directly with the firms that produce its assortment in the 1980s, and found it profitable to cut out distributors in the middle. True Collaboration With Vendors and Suppliers The first step is perhaps the most radical: All of Walmart’s suppliers are responsible for their own replenishment planning, and the company gives each of them the tools and data to successfully manage the inventory levels of their own products in Walmart’s stores and warehouses. Making data sharing that easy provides a great benefit: Walmart products with RFID are replenished three times as fast as those that only carry barcodes, and out-of-stocks are down 16% since the company started using them.īut make no mistake: It isn’t gadgets, but rather Walmart’s transparency and visibility at every step of its supply chain that is the real secret of its success. In fact, pallets and boxes don’t even need to stop moving to be scanned RFID tags can be read as they’re moving through a gate on a loading dock. These tags can be scanned from a distance with radio waves, so that pallets and boxes don’t have to be approached with a handheld laser scanner for their data to be captured and shared. Though not yet a 100% mandate, radio frequency identification (RFID) tags are encouraged for suppliers. Biggs said, “From a position of great strength, we’re now going to accelerate investments in supply chain, technology, automation, and our associates.…we remain laser-focused on operating efficiency.” In 2015 alone it spent $10.5 billion on IT, a lot even for a company that booked $486 billion of revenue that year. ![]() Walmart was the first company in the world to use barcodes on 100% of its products, way back in 1983. Visibility, Transparency and CollaborationĪt Walmart, demand forecasting and inventory-level prediction are obsessions. Walmart can do that and still hit its margin targets because it is so successful in building visibility and transparency into every scrap of data in their supply chain. Walmart’s policy is to offer Everyday Low Prices-lower than everyone else’s-year-round, instead of competing on price only during seasonal sales. Walmart believes that it’s that focus that underlies all their success and guarantees that, even as inflation and wages and other costs of doing business rise, Walmart continues to be the low-price leader. They continuously find ways to optimize their supply chain to control or reduce costs, and they never let up. Who can say the same? Data Matters Moreīut Walmart succeeds and grows because of a relentless focus on efficiency and transparency in its supply chain, even in packing pallets and stocking shelves, as we shall see. ![]() Walmart even dealt with the Covid supply chain crunch of 2021 by chartering its own ships to unload at less-busy ports. Their shipping fleet musters 9,000 tractors and 80,000 trailers and drives more than 1 billion miles per year. ![]() regional distribution centers that dwarf the others. They encompass at least 1 million square feet each-and 42 of them are U.S. Every one of them unloads and ships at least 200 trailers a day. These, together with Walmart’s family of e-commerce websites, are served by 210 distribution centers. Walmart has 5,300-plus stores in the United States employing nearly 1.6 million people, and 5,100-odd stores in 23 other countries employing another 550,000. But we can learn valuable lessons from Walmart’s focus on efficiency and automation, its nuanced approach to supply chain sustainability and social responsibility, and how digital data sharing underlies it all. Walmart is big, racking up $555 billion in sales in fiscal 2021, so it can seem like a behemoth with no lessons for the rest of us.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |