Walmart
Wal-Mart Stores or rather Walmart is a multinational corporation based in the United States that retails commodities and exists as a chain of discount departmental stores, grocery stores and hypermarkets. The company is massive and its triumph in both operations and logistics cannot be expressed any better. According to Lu (2015), Walmart has significant stock products in more than 70 nations and operates 11000 stores in 27 countries at any given time managing a $32 billion inventory (Lu, 2015). The following paper looks at the logistics of Walmart and discusses the importance of using 3PLs as the probable logistics.
Part 1
Various organizations and their Functions in the Supply Chain
Management few links in the supply chain
The supply chain of Walmart has majorly contributed to its undisputed success. The innovation in the supply chain began at the start of the company ensuring the removal of a few links of the chain. The company began and sorted to work with manufacturers directly to cut down costs and manage the supply chain more effectively. It is due to the same that the company managed and continues to manage a 100% fulfilment on every order merchandise (Lu, 2015).
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Vendor Partnerships
Walmart embarked on a bid to have a strategic sourcing to obtain commodities at the most convenient of prices form suppliers that are able to meet their demands. The strategic partnerships established by the company with the vendors ensure that the company has a long-term and high volume acquisition for the least possible prices. Moreover, Walmart has ensured to streamline its logistics or rather the supply chain management by constructing proper communication and relationship networks with its suppliers to improve the material flow in its premises at very low prices. According to Lu (2015), the network established by the company and its warehouses together with the retail stores is a single firm.
Cross Docking
Cross docking in Walmart is a strategy used in logistics to replenish the inventory effectively. It ascertains that the direct transfer of commodities from both the inbound and outbound truck trailers without having an extra storage via item unloading from an incoming semi-trailer truck having no storage in between. Suppliers have continuously supplied commodities to Walmart in various distribution centres where commodities are docked then further delivered to the Walmart stores (Lu, 2015). Cross docking is imperative because it reduces transportation costs and the time as well as eliminating the observed inefficiencies.
Technology
Technology in Walmart comes after a relentless endeavour to have low consumer prices. Innovation is imperative in the retail store as it contributes to the manner in which the track inventory and restocking is done in the shelves allowing cutting down of costs (Lu, 2015). Technology plays an imperative role in Walmart because it allows the firm to forecast demand accurately and predict the levels of inventory as well as create an efficient transport route and manage the relationships made with the customers.
Part 2
As mentioned earlier, Walmart has done exceedingly well to maintain its competitive edge via unmatchable consumer prices and diverse commodities in one location. The pursuit of low prices on such diverse products entails the usage of a stringent supply chain and management system of the inventory necessitating the use of technology for Walmart to reach its efficiency levels.
The company uses 3PLs in its supply chain in various methods. The primary practice it uses in this regards is the radio frequency identification that allows it to track its inventory throughout the course of its supply chain locating and controlling the inventory in various locations within and outside its facilities (Hartley, 2016).
The Radio Frequency Identification does well to improve the efficiency of the supply chain as well as the systems of inventory management. Furthermore, the RFID implementation proceeds to reduce costs associated with the flow of commodities and demand information. The same facilitates the supply of Walmart goods in real time enabling proper comparison of demand forecasts that ensure accurate and timely orders. The data that the RFID collects enables high level accuracy in financial reports apart from improving the managerial decisions made in the organization.
Walmart has its private fleet as compared to many other firms that outsource transportation to the third party logistics provides or the 3PLs (Hartley, 2016). The key advantage with having a private fleet is the guaranteed capacity and enhanced customer service as well as flexibility in scheduling and free company advertising. However, the 3PLs remain significant because of large amounts of capital required to establish the private fleet. Moreover, there is usually a certain difficulty in maximising the efficiency through hauling the freight on all return trips.
The early adoption of the RFID technology as well as the 3PLs logistics help immensely because they proceed to streamline the supply chain together with the systems of inventory management to provide better insight and control. The result of the above is lowered expansion costs at a constant outstanding efficiency (Hartley, 2016). The data obtained during the particular expansion allows the growing company to monitor its entire processes and refine its problems during all developmental stages that could see the company save millions of dollars. The data collected during the process of expansion will also be effective and beneficial in supporting managerial decisions in the future.
The vast infrastructure and capital requirements needed to establish in-house logistics like the transportation fleet and distribution centres and IT infrastructure make it a better option to use the 3PLs logistics.
Conclusion
Walmart remains a global business enigma using a resourceful supply chain to ensure efficient supply of its commodities. The company employs a number of logistics means with various functions that facilitate its efficiency. However, it is best that the company adopts some key elements of the 3PLs to save on costs and improve efficiency.
References
Hartley, C. (2016). Inventory Management and Logistics: RFID, 3PL and 4PL. The-business-scholar.blogspot.co.ke. Retrieved 3 July 2017, from http://the-business-scholar.blogspot.co.ke/2014/06/inventory-management-and-logistics-rfid.html
Lu, C. (2015). Walmart's successful supply chain management. Tradegecko, 2(1), 1.
