Report on Walmart's Supply Chain Management: A Comprehensive Analysis

This report provides a detailed analysis of Walmart's supply chain management, highlighting the critical role of technology, demand planning, and strategic sourcing. It explores Walmart's upstream elements, demand management and inventory systems, including cross-docking and the use of technology like RFID. The report also examines Walmart's ethical sourcing rating system and its strategies for maintaining strong vendor relationships. Furthermore, it discusses Walmart's approach to transportation and warehousing, emphasizing efficiency and cost reduction. The analysis demonstrates how Walmart leverages its supply chain to maintain a competitive advantage and meet customer demand effectively. This document is helpful for students looking for solved assignments and supply chain insights and is available on Desklib.

Walmart
Supply Chain

Contents
Walmart.................................................................................................................................................2
Introduction...........................................................................................................................................2
Supply chain of Walmart.......................................................................................................................2
Upstream Element.................................................................................................................................4
Demand management and Inventory system of Walmart......................................................................4
Sourcing of product and materials / Producing goods and services.......................................................6
Transportation and warehousing system................................................................................................9
Conclusion...........................................................................................................................................12
References...........................................................................................................................................13

Walmart
Introduction
Walmart is an American retailing organisation started its operation in the year 1962. It
was started by Sam Walton. The retail chain functions on the warehouse stores and large
discount departmental stores. It is proved to be biggest developing organisation in the retail
management and supply chain. The food category of Walmart includes the items related to
snacks, grocery, beverages, baked food, organic certified foods, meat, coffee, cookies, frozen
foods as well as many more. The distinct competitive advantage of the company is mainly its
target market (Jawad, 2017). It targets both rural as well as small community people by
lowering down the operating cost.
Walmart is one of the biggest store that operates its stores across all over the world.
the operation of Walmart has different cultures, laws and customs. It also make use of the
organizational theory whereas company tend to utilise its resources effectively for increasing
the productivity. Walmart uses the decentralized structure that helps in improving the
performance of company. It also uses the orientation program that involves the retention
practices. Employees are informed about the warm welcome that treats the employees well.
Employees of the Walmart also offer the training program that is consider as the part of the
daily working environment. from the report, it is also found that the Walmart operates around
11,695 retail units as of march 2019. It also operates the e-commerce websites in several
countries. Walmart continues to offer the low prices that further help it in increasing the sales
due to the wide customer base.
Everyday low price is the major basis of the strategy where it gives emphasis on the
best services at lower price. From entertainment to the grocery items, Walmart provides those
products that customer appreciate. In addition to this, it also give emphasis on the
sustainability initiative.
Supply chain of Walmart
In the supply chain of Walmart, technology plays a significant role. It is found that
Walmart has the most dominant information technology infrastructure of the private company
across the globe (Weill and Woerner, 2015). Network design also assists the Walmart to
properly forecast the demand by creating the effective transportation routes and managing the

relationship with customers. The best example is the Universal Product Code. It was the first
company who introduced barcodes in the year 1983. Due to its effective technologies, it is
able to work on several innovative aspects (Navimipour, Rahmani, Navin and Hosseinzadeh,
2015). With the skilled and competent people, it is able to distribute the goods effectively to
the different dealers and then to the customers for final use.
Manufacturers and suppliers tends to synchronise the demand projection under the
collaborative forecasting, planning as well as replenishment scheme. However, each chain in
its supply is connect properly through the technology. This approach of Walmart helps it in
information, frequent corporation among stores with less centralised control. The supply
chain of the company also effectively tract the purchase and demand of customers that allows
them to properly pull the products in the stores. At the same time, Walmart also tend to use
the “radio frequency identification tags” that tends to use the mathematical codes that is
further scanned from the distance also. In the recent time, company has also just started to use
the smart tags that further allow its employees and members to hastily learn which items are
needed to be replaced (Muñoz, Kenny and Stecher, 2018).
Due to the effective and effecient supply chain model, it is able to capture the huge
market share. It also meets the demand of several segments. It follows the multiple store
formats that helps in extending its market reach. Besides this, the supply chain system of
Walmart is most technologically advanced. Walmart is also committed in promoting the
dignity of bowmen and men in its supply chain. It also collaborate across the organisations
and industries across the world for holing the underage labour and addressing the unsafe
working conditions (Neumark, Zhang and Ciccarella, 2008). Walmart make use of the
bargaining power and information technology over the suppliers. Therefore, the supply chain
of the company is effectively connected with the information technology. In this way,
information technology is directly linked with the Walmart for minimising the cost of
operation.
Therefore, it can be stated that supply chain management of Walmart is based on the
electronic information regarding the product, warehouse layout, as well as role in
distribution. Besides this, the distribution operation of Walmart is one of the biggest serving
stores that provide direct delivery to the customers. For bringing the improvements, it has
also started using “RFID technology” for its distribution channel where the product scanning
will be done on the basis of numerical codes. At the same time, it also tends to encourage the

suppliers for taking the help of technology as compare to the bar code scanning. This do not
help in reducing the operation cost but also increase the productivity.
Upstream Element
Demand management and Inventory system of Walmart
The major emphasis of the Walmart is given on the demand planning and Walmart
with the assistance of its wholesaler, retailer, as well as demand market. Due to the leading
organisation across the world, Walmart always ensure that its distributor have maintained the
proper level of inventory.
Walmart has worked well to find out the strategic sourcing for finding out the
products at the significant prices form the supplier. It also establish the strategic partnership
with several vendors by offering them higher purchases as well as long term relationship in
the lowest possible price. Besides this, Walmart also use supply chain management by
ensuring effective or proper relationship network and communication with the suppliers. This
ensured it in improving the flow of material with the low inventory.
It has ensured the Cross-docking as the tactic of inventory. It is said to be the logistics
inventory of the Walmart strategy in order to reload the inventory effectively. It effectively
transfers the products from the outbound and inbound truck without the need of any
additional storage. At the same time, suppliers are also delivering the significant products at
the distribution centre of Walmart where every product is cross docked. After this, only it is
delivered to the stores of Walmart. It tends to keep the transportation as well as inventory
Supplier CustomerManufacturer Distributor Retailer
Upstream
Downstream

cost Low by reducing the time in transportation and removing the inefficiencies. Walmart
truck drivers also deliver goods to the distribution centres on time where they are repackaged,
stored, as well as distributed without waiting in storage. Walmart has also effectively done
investment in the technology by becoming an innovator in such a way stores tends to track
the inventory.
For ensuring the effective inventory on time, it has also networked with several
suppliers with the help of computers. By collaborating with P & G, it is able to maintain the
inventory in stories. An automated re-ordering system links each of the computers. Among
all the discussed tool, inventory management is the most significant contributor that leads the
organisation towards success (Tan, Yan, Chen & Liu, 2018, December). In Walmart, many
types of inventory are involved that fulfils the role of effective supply chain management.
Following inventory are most common in Walmart:
 Inventory in transit: these goods directly arrived at the stores and further stored in the
inventory. This inventory plays most significant role that further sold to the customers
(Bahrami and Singhal, 2015). This is significant the organisations where referred goods are in
transit. It also tells the global extent of the supply chain management of Walmart.
 Inventory anticipated: Walmart also takes the assistance of anticipated inventory that
might support the inventory in buffer. Before the black Friday, inventory that is in stock
increased in order to satisfy the huge demand.
Walmart has also launched the My Productivity app that offers each member to access
the real time data from their phones. The app allows the manager to restock the items by
accessing the sales. It can also work more on taking the smarter decision such as real time
inventory management. Point of sale system also works effectively with the inventory
management. At the same time, Walmart also believes that forest is made up of the planet’s
ecosystem that helps in providing the habitat for plant and animal life. Due to this, it has also
made the 2020 goal related to the zero deforestation by working with its suppliers across the
globe. Through this commitment, Walmart is committing itself toward addressing the
problem of deforestation in the multiple commoditiesm (Christopher, 2016).
In order to ensure the effective demand management, Walmart can take several
effective measures. It can make an application for the interaction between customers and
employees. For the smoothing functioning of the application, skilled and competent person
can be appointed who will handle the messages and queries of the employees. Whenever

employee will see the clearance in any product, it will directly pass this information to the
inventory managers, which will take the step to bring the products into stock.
Sourcing of product and materials / Producing goods and services
Walmart is seen as the strategic sourcing in finding the products at the best process
from the supplier. It also establishes the strategic partnership with several vendors. It has also
ensured the relationship network and communication with the suppliers in order to improve
the material flow. In order to ensure the ethical sourcing, it also follows the rating system for
the supplier (Knack, 2016).
Walmart Ethical Sourcing Rating System
Rating Description Validity
period
Common
violations
Serious risk
(Red)
"Red" factories have the serious
violations. These factories are
Perpetual forced labor;
Child labor;
demand
managment
customer issue
regarding
stock
clearance
pass on
information to
the employee
inventory
manager look
after the stock
demand
fulfilment

generally banned from supplying
Walmart.
forced overtime;
physical or
verbal abuse;
attempted
bribery during
the audit
High risk
(Orange) “Orange” factories tends to show
the serious issues. However,
Walmart has allowed the
sourcing from those facilities
while violations are corrected.
Three orange ratings within a 2-
year period become a red rating.
Orange-rated factories require a
follow-up audit within 6 months.
6 months
Children present
but not working;
fire safety
violations;
minimum wage
and overtime
violations
Medium risk
(Yellow) “Yellow” factories are fairly
compliant with Walmart
standards, but fail to meet at least
one requirement. This is really
the minimum “safety zone” an
importer wants factories to
achieve. Yellow-rated factories
require a follow-up audit within
one year.
1 year
No physical or
verbal abuse
policy; no free
employment
policy; extended
probation period
Low risk
(Green)
“Green” factories are highly
compliant and only the least
severe violations are found. In
many countries in Southeast
2 years Few, if any,
minor violations

Asia, and particularly in China,
factories granted a “green” rating
are extremely rare. Only factories
with the least severe violations
and a high level of compliance
Following are the sourcing strategies of the Walmart are as follows:
Strategic vendor relationship: It is found that Walmart select the suppliers who can ensure to
meet the demand. At the same time, it also offers them the best prices for the products and
materials. With the vendors, it develops the best relationship. It also ensures the relationship
effective communication and network with the suppliers in order to improve the flow of
material. Therefore, collaboration is said to be the key to success of Walmart (Armbrust et al
2010).
Cross docking: It is most significant aspect in the sourcing of materials and products of
Walmart. It transfers the products from inbound truck to the outbound truck directly. This
helps the Walmart in saving the cost of storage. Afterwards, suppliers deliver the products to
the distribution centre of the supplier (Moghadam, Ghomi and Karimi, 2014).
Technology: Walmart effectively make use of the technology in order to track the required
inventory. By making use of the technology, Walmart properly forecast the demand and
thereby manage the customer relationship. Walmart is such company who become indulged
more in e-commerce. As the retailing business changes, Walmart has also changes its way of
working. When it comes to sourcing the products, Walmart is best in meeting the higher
safety standards. In order to ensure the transparency, it tends to ensure collaboration with the
partners of supply chain. It also source those produces by seeing the applicability of safety
regulations and laws. The regulatory inspection process helps it in providing the significant
way to benchmark and quantify the products and food safety (Muñoz, Kenny and Stecher,
2018). Walmart works closely with the members to the see that every club and store operate

in compliance with the federal, state and local regulations. The regulatory review process of
Walmart tends to include the full review of correcting action plans and findings. It ensures
the ethical sourcing in the company by disclosing the ingredients to customer’s sustainable
chemistry policy (Hugos, 2018). The existing system of product sourcing tends to reduce the
environmental impact. Due to the fresh food requirement of the customers, Walmart is
sourcing agronomic specialist and office in the most growing regions of the world. At the
same time, Walmart is also working on its “Factory Energy Efficiency Program” by
promoting the energy efficiency in its factories across the globe (Carter and Liane Easton,
2011).
Walmart is although effectively sourcing the products and materials. It can work more
closely with the suppliers to find out the solution in its dairy and meat supply chian that will
further reduce the GHG emission. It can also permanently hire a person who can ethical do
the sourcing of most of the products in its farm. This will improve the yield by reducing the
loss of fertilizer (Ahire, Malhotra and Jensen, 2015).
Walmart can also use cloud-based system. This will assist the management in
providing visibility of shipments and inventory in the real time. Thus, it will enhance the
tracking in logistics segments (Navimipour, Rahmani, Navin and Hosseinzadeh, 2015). It can
also use the expert cloud. It is said to be the Cloud-based framework to share the knowledge
and skills of human resources. In Wal-Mart, implementation of these systems can be stated
as a effective warehouse related to the products in their pipeline (Sharma and Nautiyal,
2016). Due to this, it will offer the companies or organisations to make strategic order full-
fulfilment decisions. At the same time, Cloud based ERP system can also assist in
comprehensive food safety management abilities. Besides this, it will further assist the
company to easily produce traceability records fast in a single solution, as the supply chain in
this global economy is more extensive and complex.
Transportation and warehousing system
Transportation of goods and services is required to be easily establish with the
environment of consistency. In order to implement the visibility, it is significant that
company take into consideration this element. Walmart success also depends closely on the
proper use of the transportation (Shi, Tao and Voß, 2011). It has also used the responsive

system of transportation. At each distribution centre, Walmart uses the cross docking where
the product is exchanged through the truck.
IN Walmart both primary as well as secondary distribution is included that add the
value in customer. Primary distribution is for the accumulation of value by ensuring the
inbound flow into the warehouse distribution centre and production plant. In each hierarchy
of the supply chain of Walmart, the presence of retailer has increased. Besides this, they carry
out each operation of the logistics at the manufacture door (Attaran, 2007). This has further
led to the factory gate pricing. Due to this, the provider in commodity price does not count
cost of transportation cost. In the transportation system of Walmart, it has around 61,000
trailers, 61,00 tractors as well as more than 7800 drivers. With its truck driver, it constantly
works to ensure that its merchandise is moving the sustainable and effective way.
It is however recommended to the Walmart to use RFID technology. It can be used by
Walmart in manufacturing of the stock turnover. This helps easily transferring the goods to
the stores that enables the regular flow of goods in respective of the customers demand. The
upstream suppliers at the same also properly align with the purchasing manager who have the
responsibility for the selection of right supplier. Walmart has also implemented the
technological advancement so that efficiency and performance can be increased. In addition
to this, Walmart should also give more emphasis to the cloud based sensor that will assist it in
safety of the food products. At the same time, sensors will help it in producing the location as
well as other parameters. This enables the companies to isolate the specific place and time
with consistency (Olson and Xie, 2009). In addition to this, it is also recommended to the
Walmart to appoint a person for the checking of services of truck drivers. This will helps in
maximising the efficiency of its working. At the same time, products will also be delivered in
the same quantity and at the right time.
For the effective inventory of the warehouse, it has implemented the electronically
backed vendor managed inventory. This is done for the sake of suppliers so that they can
effectively manage their inventory in the warehouses of Walmart. It also sends the data in
order to centralise the data so that manufacturer also able to tell exactly which stock is getting
low. In addition to this, Walmart should also open more stress in the emerging market that
will reduce its cost of transportation. At the same time, it will also help it reducing several
risks related to product loss as well as delay in delivery of orders. In the recent time,
customers also give emphasis on the faster delivery of the product. they prefer to purchase of
those companies who provide faster delivery of the services.

Suppliers
Manufacturers Distributions
Centres
Demand
Markets
Domestic Manufacturer
Information
Domestic Trucks
Processing Unit
Cargo Planes

Conclusion
In the limelight of above discussion, it can be concluded that Walmart is the most
innovative retailing store by ensuring advancement in technologies. It effectively cope up
with the demand of customers by bringing several innovative ideas for satisfying their
demand. It is the first company who introduced barcodes in the company. Demand projection
is one such approach of Walmart that helps it in satisfying the customers demand quickly.
Besides this, it has also assured the ethical sourcing if the materials and products by ensuring
regular communication with its suppliers. At the same time, time to time communication with
the warehousing and transporting people, it is able to manage the demand and inventory at
the same time. However, it can also bring several changes in the organisation such as
working toward customer complaints or query with the appointment of skilled employee who
can handle this.

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