how Walmart leverages transportation providers, users, and governmental agencies

how Walmart leverages transportation providers, users, and governmental agencies

For the success of a company, an effective and efficient supply chain management is imperative. A supply chain that managed effectively and efficiently ensures that a company has sufficient items in terms of quality, quantity, and prices. This enables the company to have a competitive advantage over others in the market. Walmart is one company that is known for its effective supply chain management. Its supply chain usually takes two forms, which involve a manufacturer taking the supplies to Walmart’s stores, and then Walmart transports the products from its stores to the customers. This paper will explain supply chain strategies that Walmart uses to operate domestically and globally with an emphasis on how they plan and integrate supply chain components into a coordinated system and how Walmart leverages transportation providers, users, and governmental agencies.

Key strategies

Collaboration

Walmart has collaborated with a lot of suppliers through forming partnerships. The collaboration with the partners enables the company to obtain products from the suppliers at the lowest prices possible. The collaboration strategy has seen the company establish a strategic partnership with the suppliers by offering the vendors a chance to strike long-term relationships and enormous purchases in exchange for the lowest prices possible (Nguyen, 2017). This has seen the company promote its low-price strategy of products it provides to its customers.

Information sharing

Suppliers are key to Walmart’s success as a company and the success of its supply chain. As a result, the company has constructed communication and relationship networks with its vendors to improve the flow of inventories from the vendors to Walmart’s stores. Through information sharing, Walmart’s global, domestic vendors, and its stores operate as if they are a single firm (Nguyen, 2017). As a result, Walmart does not have to pay for the information provided by their vendors like other companies.

Inventory placement

Walmart allows all quantities of different suppliers to go to the same store. Once the products are in the store, Walmart inventory management uses a system that enables the suppliers to access data for their product levels (Nguyen, 2017). By so doing, the suppliers can know when to replenish depending on the level of their supplies. The strategy of allowing the vendors to manage their supplies helps Walmart to avoid cases of shortage while also keeping the operating costs.

Integrated planning

The company uses computers in the management of their supply chain. The company uses a real-time stock management system with reorder levels of goods stocked in the stores. This system enables codes to be recorded at the main database of supply chain whenever a sale is done at the cashier. Additionally, whenever vendors supply the products, they have to go through the database to be recorded in the system (Nguyen, 2017). This enables Walmart’s supply chain managers at both head office and section levels to manage the stocks effectively.

Cross-docking

Cross-docking is a centerpiece of Walmart’s strategy of replenishing inventory effectively. Cross-docking is the direct transfer of commodities from either outbound or inbound trucks and is transported directly to customers without being stored. At Walmart, suppliers transport their products to Walmart’s distribution centers, where on delivery, the goods are cross-docked to either customers or Walmart’s stores (Tavana, Khalili-Damghani, Santos-Arteaga & Zandi, 2017). Cross-docking reduces the costs of both transportation and inventory, as well as reducing transportation time and eliminating inefficiencies.

Application of technology

Walmart has embraced and invested a lot in new technologies. Therefore, technology acts as the foundation of the company supply chain strategy. Through the use of technology, procurement managers at Walmart can track and accurately forecast inventory requirements as well as manage the company’s relationship with its customers (Tavana et al., 2017). Some of the technologies implemented at the procurement department in order of how they were implemented include barcodes, saving catcher, retail link, RFID, and, most recently, smart tags.

Walmart leverage transportation providers and users by insuring them and the goods being transported. This allows the company to avoid losses due to accidents. The company leverages governmental transportation agencies by adhering to all policies of transportation at both macro and micro levels. It also employees drivers who are experienced and have driven over 250,000 miles to reduce the number of careless driving (Fessehaie, 2017). The company tries as much as possible to the valid documents for the goods transported. This ensures that the managerial strategies of maintaining low costs are met by avoiding fines and penalties for not complying with certain public transportation policies.

References

Fessehaie, J. (2017). Leveraging the services sector for inclusive value chains in developing countries. International Center for Trade and Sustainable Development, Geneva, Switzerland.

Nguyen, T. T. H. (2017). Wal-Mart’s successfully integrated supply chain and the necessity of establishing the Triple-A supply chain in the 21st century. Journal of Economics & Management, 29, 102-117.

Tavana, M., Khalili-Damghani, K., Santos-Arteaga, F. J., & Zandi, M. H. (2017). Drone shipping versus truck delivery in a cross-docking system with multiple fleets and products. Expert systems with applications, 72, 93-107.