Brown, H, Walmart
Mr. Steve Barnes
It all started with one man’s dream and beliefs, Sam Walton. “There is only one boss-the customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.”-Sam Walton. Walton changed the philosophy of the American retail business establishment, instigating the shift of power from manufacturer to consumer. Fast forward to 2014, Walmart is at #1 on the Fortune 500 list, valued at $473.1 billion dollars. “Save Money. Live Better. Walmart”, the catchy slogan that we always seem to hear all over radios and television. Today, customers seek convenience of a one-stop shopping store, and Walmart is just the place to fulfill that need. Walmart a global family business, has everything from groceries, sporting goods, crafts and even entertainment at discounted prices, online and in their 11,000 stores worldwide. Walmart assumes market leadership positions primarily due to its efficient integration of suppliers, manufacturing, warehousing, and distribution to stores. Its supply chain strategy has three key components: vendor partnerships, cross docking and distribution management. This phenomenal growth is attributed to its continued focus on customer needs and reducing costs through efficient supply chain management practices. Walmart became one of the first retailing companies in the world to centralize its distribution system by pioneering the retail hub and spoke system. Within this system, goods were centrally ordered and assembled at a massive warehouse from where they were then dispatched to the individual stores. The hub and spoke system enabled Walmart to achieve significant cost advantages by the centralized purchasing of goods in huge quantities and distributing them through its own logistics infrastructure to the retail stores spread across the U.S. Walmart’s success is due in part to a system that was developed early in its infancy, the cross-docking system. The cross-docking system allows the vendors merchandise to cross Walmart’s docks from the vendor’s trucks to Walmart’s trucks, destined for its stores. Thus eliminating the need to sit for long periods of time in a warehouse. This allows Walmart to buy truckloads of goods without paying out the inventory and handling cost, allowing the customers to buy at everyday low prices. Walmart had to make an investment on cross-docking and changes to the transportation systems. This is to let them know when merchandise is bought and that the supplier needs to send a replacement for the one that was bought. For this to happen successfully, Sam Walton realized he would have to increase the size of his trucking fleet. The Walmart Advanced Vehicle Experience concept truck-the result of a partnership between many vendors-is the latest in our fleet efficiency program. This prototype combines aerodynamics, micro turbine-hybrid powertrain, electrification, advanced control systems, and cutting edge materials like carbon fiber all in one vehicle. So when it comes to sustainability and fleet efficiency, the goal is simple; deliver more while driving fewer miles. EDI (Electronic Data Interchange) has enabled the suppliers to download purchase orders, along with store-to-store sales information relating to their products sold. After receiving information about the sales of various products, the suppliers ship the required goods to Walmart’s distribution centers. Technology also plays an important role in helping Walmart stay customer focused. Walmart then went on to invent the practice of sharing sales data via computer with major suppliers, such as Proctor & Gamble. Every time a box of Tide is rung up at the cash register, Walmart’s data warehouse takes note and knows when it is time to alert P&G to replenish a particular store. That way there are more happy customers and no empty shelves. It is important to have a strong customer/supplier...
References: "Walmart Stores." Fortune 500 2014. N.p., n.d. Web. 25 Sept. 2014. .
"Walmart Corporate: Our Story." Walmart Corporate: Our Story. N.p., 2014. Web. 30 Sept. 2014. .
"Walmart: Keys to Successful Supply Chain Management." University of San Francisco. University Alliance, 2014. Web. 24 Sept. 2014. .
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