Walmart is one of the largest and most successful retailers
which has made its impression all over the world. The retailer is
successful only because of its efficient and effective supply chain
management. The major focus of Walmart is to bring down the cost
and better use of technology to keep all the supply chain partners
connected. The retailer has incorporated the below mentioned
practices to make its supply chain effective :
- Direct contact with the manufacturers : Walmart has a direct
contact with the manufacturers bypassing the middlemen and thus
cutting down the margins earned by the middlemen. As a result the
cost reduces and the profit margin increases.
- Vendor managed inventory (VMI) : As the middlemen are bypassed,
the inventory is directly managed by the vendors.
- Cross Docking : Cross Docking is the practice of inbound trucks
passing the inventory directly to the outbound truck without
maintaining any warehouses. Thus it reduces the cost of
operations.
- Sharing of Real Time Information : Walmart has invested heavily
in information technology system connecting all the supply chain
partners and thus the real time sales information is passed along
all the supply chain partners. As the real time sales information
is shared, so the inventory is managed properly and there is no out
of stock condition.
- Cooperation and Collaboration with suppliers : The retailer has
strong cooperation and collaboration with the suppliers, thus
maintaining good relationship with them.
- Vertical Management system : There is a strong relationship
across the vertical partners of the supply chain.
- Walmart owns its fleet of trucks and thus make the supply chain
more prompt.
Thus the retailer is reducing the cost at every stage and
connects all the supply chain partners connected to make its supply
chain effective.