Walmart supply chain management
According to a study conducted in 2006, 90%of the population in the United States of America lives within a distance as short as 15 minutes of a Walmart store. Sam Walton’s strategy when he opened the first Walmart store was to have the lowest prices of all competitors, and make up for having low prices with large sales volumes. A local store cannot profitably match their prices since it cannot make sales as large as the international store can make. Walmart therefore ends up putting other retail stores out of business with economists suggesting that three stores go out of business within two years of the opening of a Walmart store. Its main key to success is its supply chain. Walmart makes use of the following aspects in its supply chain, mainly enhanced by IT: use of bar codes, radio frequency identification technology, electronic data interchange (EDI) in procurement, setting up computer terminal network, voice based technology in procurement and GPS system of communication on trucks.
In the early days of Walmart, it encouraged its manufacturers to make use of barcodes. With the adoption of the universal barcode system, it became easier to keep track of company trends and the movement of inventory. An article from San Francisco University, says that Walmart boasts of the strongest Information Technology system structure of all private companies in the world. This enables Walmart to predict customer needs through customer behavior. It can identify their preferences and demands and uses this information to adjust and track inventory as required, making efficient deliveries. All these account for and lead to a high variation of the inventory on the shelves. A greater variation and a higher quantity of items are available for customers.
For the past 8 years, Walmart required its vendors to use radio frequency identification technology. The technology uses radio...