![]() Walmart supply chain management practices have made it possible for them to cut costs for both personnel and warehouse storage. ![]() This is inventory destined for Walmart stores based on their inventory needs that’s uploaded directly to Walmart delivery trailers instead and brought to re-packaging warehouses and distributed immediately without sitting in storage. Technology also continues to expand the definition of what’s possible, so now, as if inventory management weren’t complicated enough already, there is a fifth type of inventory called cross-docking inventory. By having access to an integrated system that connects expert analysts that forecast consumer demand, real-time POS sales data, and the information at distribution centers, suppliers are able to accurately determine which products they need to send to Walmart stores to satisfy that demand. Further, it streamlined the Walmart supply chain flow. Their data analysts, after conducting a Walmart supply chain analysis, found that making suppliers responsible for monitoring and maintaining inventory of their own products removed a costly step from the Walmart supply chain process. However, it’s a cost-saving part, since it reduces overhead by eliminating some Walmart supply chain jobs. Walmart delegating part of the responsibility of inventory management to manufacturers and suppliers with a vested interest in ensuring that stock levels remain constant is just one element of the overall Walmart supply chain strategy. I’d say they’ve found themselves a winning strategy. Walmart is currently the single largest retailer in the world, with sales of $341 billion dollars in 2020 alone. Those cost savings are passed along to customers in the form of low prices, which increase the number of customers. Instead, the suppliers hire extra personnel to watch stock levels and replenish items when they fall below a certain level. As a result, the company doesn’t need extra personnel to manage goods from each supplier. Trucks were no longer bringing merchandise to warehouses to be stored, but to be immediately re-distributed, either directly to stores to stock shelves or to fill orders that have already been placed. That meant that Walmart could cut out the middleman completely. ![]() That guarantee, combined with the sheer volume of merchandise sold by Walmart on a daily basis, was enough to get manufacturers on board. Using automation and delegating inventory management to their suppliers, Walmart was able to offer them consistent business in exchange for lower wholesale prices. Walmart inventory management offers a prime example of how using advanced technology and innovation for each of those categories can optimize performance in every area. If you’re new to inventory management, there are four different categories of inventory: finished goods, transit, buffer, and anticipation inventories. ![]() However, their pricing strategy wouldn’t be possible without a good inventory management strategy, and Walmart has one of the best. Pricing is one of the strategies Walmart used to become a retail industry giant. When it comes to retail and e-commerce, that refrain becomes “pricing, pricing, pricing”. In the real estate business, the phrase used to describe what new businesses need to consider first and foremost when looking for a storefront where their business can succeed is “location, location, location”.
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