Supply Chain Management Logistics & Walmart Part 3

Walmart and the Global Supply Chain

Operations management has also gone global for Wal-Mart, and the company has figured out how to use local suppliers as part of its supply chain strategy. This is important particularly for such items as perishable groceries as well as for local items tailored to certain markets and cultures.

What amazes me is that Wal-Mart also employs so many people worldwide, and even for some U.S. states like New Mexico, where a significant portion of the population of that state are employed by Wal-Mart and growing, currently somewhere between 3-5 percent of the state’s entire workforce based on something I read actually about 3 or so years ago now.

One day Wal-Mart may have between 5-10 percent of a state’s workforce, and that’s a powerful socio-economic foothold as well. It has several states already above 3%.

Wal-Mart has become a mega big business too

We’ve talked about some important logistics-related concepts that Wal-Mart seems to have perfected, as part of operations management. We’ve also talked about how it has gone global and how it does innovative things like keep it’s own private fleet as well as how it uses local suppliers as part of it’s strategy.

Wal-Mart has a product mix of such variety that it appeals to just about every segment and it does not seem to have a bad re-population for quality even though it’s prices are low. It also properly manages the supply chain and distribution process, and has leveraged information technology in order to do so most effectively.

This results in stocking almost every item and always having its hottest items on hand or transferable between stores in order to provide the customer with what they want or need.

Any business that runs this way maintains a reputation for service and fulfillment, and achieves a global reputation of value, reliability, service, success and profitability.

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Supply Chain Management Logistics & Walmart Part 2

Walmart runs a tight supply chain ship...

Reasearching other retailers has given me an understanding of operational and tactical level day-to-day retail operations that go beyond textbook knowledge, and hopefully will add some insight here.

From an operations management perspective, Wal-Mart also runs a very tight ship, and has its shipment and distribution processes down to a science. It knows it’s key product items and what to always have in stock.

Walmart and other retailers know where to put things strategically, so that in end effect most customers end up calling it the $100 dollar store…that is, one walks in intending to buy about $10 or $20 worth of items and walks out buying about $100 dollars worth, just because it’s the ultimate one-stop-shop.

This means it was planned and set up in such a way so that everything the average consumer needs is conveniently located in one store location, and dispersed so that the consumer looks at many products aside from the product they’re seeking. Then they always swap things around to keep this dilemma going, for their benefit!

I see Wal-Mart as an innovative revival of the general store concept from the old days, but in a much greater sense and with a much better inventory control and supply chain process. Items are available when they’re sought, or are delivered with a just-in-time framework.

Walmart is a store that has not only just about everything you need, but more or less what you’ll settle for, for convenience, as well as price.

Who can beat such a simple concept? Price, convenience, and just plain old American consumer’s favorite past time: shopping and having more choice than one could want at a decent price.

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Supply Chain Management Logistics & Walmart Part 1

I’ve always been told that the only way to really learn is to learn from the best, and to learn from those who do it right, because in the end those who can put their money where their mouth is are the ones that count for something in the business world.

Having said all of this, I would like to talk about Wal-Mart, a very successful company (number one in it’s industry) that has been profitable pretty much since it’s inception and has been doing business better than all other companies in it’s league, at least from a supply chain management perspective.

Everyone knows about Wal-Mart, and even people in foreign countries now have these superstores and super centers. Wal-Mart has earned a huge international reputation for “everyday low prices” as their motto goes.

As with any retailer, Wal-Mart’s success can be attributed, from an operations management perspective, to the successful and timely availability and delivery of its products into the hands of the customer. Simply put, Wal-Mart has its logistics and supply chain management process figured out. If it didn’t, it wouldn’t be where it is today.

Wal-Mart has been featured in several articles, -and its IT-based inventory, management, distribution and supply chain processes have effectively leveraged IT to become one of the central aspects of their success. In fact, I believe it’s how Wal-Mart has been able to maintain a competitive edge against such competitors as Target and K-Mart.

Wal-Mart’s Chief Operating Officer or COO was carefully selected and is moving up the ladder as any COO can, even to the CEO level of responsibilities due to a COO’s understanding of the core of what makes the business successful and profitable.

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