Supply Chain Management: Walmart Essay

1905 words - 8 pages

Wal-Mart, now it is branded as Walmart, is the world largest public multinational corporation by revenue in 2010, which runs a chain of large discount department stores and a chain of warehouse stores worldwide. Walmart focuses on the improvement of sales, constant reducing costs to offer goods at the best price, the adaptation of efficient distribution and logistics management systems to ensure the constant flow of the goods and the use of innovative IT and systems to accurate efficient operating processes. Throughout this essay I would like to focus on its distribution and logistics system and Information Technology that strongly supports Walmart’s success today.
There are always great distribution systems behind the successful supply chain management, and the same goes to Walmart. Walmart owes much of its past success and expectations for future growth to an ability to self-distribute merchandise from a vast network of modern distribution centres served by a private truck fleet. It has a developed distribution system that allows company to satisfy customer needs quickly. In the Walmart’s distribution system, the distribution centres are the most important part. Walmart has many distribution centres at different geographical locations within a certain distance that enable each store to receive replenishment within a day. Each store can choose a number of delivery plans. Walmart also has own warehouses which can directly supply 85 percent of the inventory, as compared 50-65 percent for competitors. Therefore, Walmart can provide replenishment quicker than competitors. It takes only 2 days while others need at least 5 days. Running own distribution centre reduce not only distribution time but also shipping costs. Each distribution centre is divided into different sections on the basis of the quantity of goods received and is managed the same way for both cases and palletised goods. In some cases, suppliers deliver goods such as drug, for example, directly stores; however, about 85 percent of the goods which are available at stores pass through the distribution centres.
To operate the distribution centre more easily and economically, Walmart uses sophisticated barcode technology and hand-held computer systems which are well-know technologies as strength of Walmart. Thanks to these technologies, all the products information regarding the inventory level are available at real-time by every employee. They can identify the pallet and the location from where the stock had to be picked up by making two scans. The hand-held computers guide employees with regard to the location of particular product from a particular bin or shelf in the centre; therefore, they don’t need much time to manage their inventory. The employee conforms whether it was right product or not when the computer verifies the bin and pick up a product. The quantity of the product required from the centre is entered in to the computer by the employee and then the computer update the...

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