Walmart Supply Chain Management Case Study

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Q. 2. Recent development in Technology has enabled huge global organizations to avail information easily in their premises for smooth functioning of various departments within an organization. Much of a company's success comes down to its Supply Chain Management and logistics. The development of Information Systems in SCM helps in cost reductions, customer satisfaction and productivity. Walmart, an American multinational retail corporation runs a chain of large departments and warehouses across the Globe. It was established in 1962 and has the largest IT infrastructure in the world . A large part of its success comes from its implementation of Information technology and its related systems in its Supply Chain Management. Its state-of-the-art …show more content…

Then a retail link Bentonville Database was devised which acted as a link to the stores and the Analyst who would analyze the real-time sales data from POS to Walmart's distribution centers.  Transaction Processing System (TPS) in Walmart witnesses transactions close to 10 million per day. This system automates repetitive tasks  Using a CPFR (Collaborative Planning Forecasting Replenishment) scheme all the links in the supply chain would be connected. Through this they could see the real-time product demand, share past data, customer information, demographics, stock position. As a result, they could reduce inventory cost. Lead time was cut down from 21 to 11 days, sales grew by $8.5mn, on hand inventory reduced by two weeks.  Having a centralized system in place Walmart was also able to allow customers to pull merchandise to the store than having the company push its goods on the …show more content…

 Walmart in collaboration with P&G built an automated re-ordering system which is linked to the PCs in P&G and it would send the inventory to Walmart's distribution center or directly to the stores.  ERP (Enterprise Resource Planning) is an integrated part of Walmart and it connects internal and external resources. It has helped reduce supply chain inaccuracies. Using ERP, it can easily fulfill the basic steps of SCM - Procurement, manufacturing, distribution, retailing and finally reaching the end customer.  Walmart was the first retail company to use Hub and Spoke System. In this, the goods are centrally ordered, assembled at a massive warehouse (Hub) and dispatched to individual stores (Spoke).  With advancement in Technology, the Hub and Spoke system was upgraded to another information system called "Integrated Secondary route network design model" connecting hubs through primary nodes and centers using secondary nodes. Implementing these systems enabled Walmart achieving significant cost advantage as they had eliminated wholesalers which saved them 5% sales

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