You might know that Wal-Mart runs the largest chain of discount rate department stores in the world and is the biggest private employer in the world with over 2 million employees. However exactly what you might unknown is that Walmart is a prime example of how enhanced logistical operations can give business the competitive edge they have to overlook the competition.
With the incredible amount of volume Wal-Mart attains, their effective supply chain and inventory management is something for the books. Wal-Mart’s refined logistical practices hinge on the logistical practice one called cross docking.
Cross docking is when items from a provider or producer are dispersed straight from manufacturing or the provider straight to the customer or the retail chain, with little handling or storage. Although the cross docking method has Cross-Docking Services actually been around because the 1930’s, Wal-Mart has actually been said to have actually promoted the approach, being thought about a sort of cross docking king.
Wal-Mart adopted this technique as the number of their stores began to increase rapidly, they need to make sure they established and effective method to get merchandise out from the distribution centers to their lots of stores.
Cross docking has actually added to Wal-Mart’s streamlined supply chain, which ultimately gets the item to the customer faster and less expensive. Wal-Mart had the ability to leverage its logistical volume into a core strategic competency. Among the elements that allow them to continuously provide lower prices, and acquire a tremendous advantage over the competitors.
” Lower product costs, decreased stock storage expenses, improved inventory management, are simply a few of the continual advantages that Wal-Mart’s supply chain management has accomplished utilizing cross-docking.”
The cross docking has actually been so reliable for this company because they had a few of the basic building blocks developed. The most crucial of which is a reliable and continuous interaction system.
Considering that the 1980’s Wal-Mart has actually utilized a system of Satellite communication to keep track of each transaction at every store. Effective communication in between each link in the supply chain, a very crucial consider effective cross-docking application.
The other key foundation was an efficient stock management network. Wal-Mart was among the very first adopters of the Universal Item Upc code which permitted them to collect and examine data on their inventory.
Over the last few years Wal-Mart has actually implemented a radio frequency network assists keep constant real-time track off stock. This system allows for effectiveness in shipments, but likewise supplying info about which items have to be restocked.
Wal-Mart’s supply chain management is considered the perfect case research study of how effective supply chain management can contribute to a businesses’s success. There’s a factor that Wal-Mart has actually ended up being the home of “Everyday Low Prices” or can offer a “Cost Match Assurance”. There is a lot to be gained by understanding how effective organizations achieve their competitive advantage.