Walmart

Notes:

Scale economies.

Low retail prices

World biggest retailer

Third largest employer

4600 stores

130 million people shop each week

every second 400 people shop in one of 10.700 shops

Net sales 466.100.000.000

 

 

1. Where does Walmart’s supply chain start? What triggers Walmart’s Retail Link system to ship goods to local Walmart Stores?

 

The Supply chain starts with the large quantity of suppliers Walmart has. It wanted a collaborative forecasting, planning and replenishment system, then, decided to upgrade the Retail Link to a demand aggregation software provided by Atltas Metaprise software. And this upgrade helped purchase agents to aggregate demand from 500 stores into a singles RFQ from suppliers. Facilitating the purchase and making it more efficient.

 

At the same time, the suppliers have direct access to real time information on inventories, purchase, orders, invoice status and sales forecasts based on 104 weeks of online real-time, item level data.

 

In terms of push and pull, there is a mixed between both, in this case Walmart retail link is triggered by consumer purchases in local stores (cash register data). This is in contrast to more traditional supply chains which often start with manufacturer or distributor shipping goods to local stores based on forecast sales (PUSH).

In the case of Walmart, the supply chain is driven by consumer behavior which (PULLS) replacement stock from inventory.

 

In conclusion, the suppliers know exactly how to plan their production and what goods are being sold.

 

1. Why is a detailed knowledge of consumer purchases at each store important to Walmart’s success?

 

Because thanks to the software installed in the cash register, the information (Big Data) is sent in real time to the agents that can know what is on demand of each market, then, they can use the data directly provided by the “clients” in order to manufacture or deliver the right products. It is fundamental information, because the behavior of the client helps to match and satisfied its needs. It also offer better services to customer as products needed by geographically, know local culture, local perception, forecast needs as weather conditions, products always available assuring continuous supply chain, Marketing as increase the brand equity and achieve top of mind (positioning).

 

1. Why can’t other large retailers easily duplicate Walmart’s Retail Link?

 

Because Walmart has invested in supply chain management a huge quantity of resources, it has the largest IT system of any private company in the world, makes it a strong force that other retail hardly can duplicate.

The business model of Walmart is constantly focused on improve its operations, lowering costs and improving customer service. Besides the effectiveness managing the supply chain leading edge of logistics, transportation, distribution and technology. In addition, the unmatched scale economies.

 

1. Why does Walmart encourage its vendors to learn how to use Retail Link?

 

As I mentioned before, for Walmart is fundamental improve operations, lower costs and improve customer service.

Therefore, for Walmart is crucial to encourage its vendors to learn how to use Retail Link, it helped to improve the ability to drive cost out of its supply chain and manage it efficiently. Every Walmart store, operates like a single small company and store managers are trained to manage one store at time, one department at a time and one customer at a time. With the software, the vendors can enter and review purchase, orders, carrier appointments and get data on consolidated load. It complies vendor to get a score according to time performance and the metrics.

Finally, I can say that Walmart is a successful business due to its investments on supply chain, creating a competitive advantage in terms of cost and differentiation, in the way of well-known the customer and predicting the future thanks to big data analysis.