Walmart: A Supply Chain Perspective

Walmart: A Supply Chain Perspective

Executive Summary

Founded in 1962, Walmart began as a one store location to evolve into America’s largest retailer with over 11,000 locations worldwide. Their effective use of supply chains has been instrumental in their exponential growth and success over time. Through effective methods of choosing suppliers, to implementing cost saving logistics means, Walmart has become the gold standard in the supply chain management field on how to properly utilize demand management techniques to maintain a competitive edge in the marketplace.

Key Points:

1. Walmart has strived to live up to Sam Walton’s idea of providing the best quality products possible to customers for the lowest price possible.

2. Walmart’s internal processes provide efficiency for suppliers and customers both upstream and downstream.

3. The main supply chain method used by Walmart is the “Push” method as opposed to the “Pull” methodology.

4. Walmart has a well-earned reputation for the competitiveness nature implemented by purchase managers that endeavor to achieve the best group of suppliers at the lowest price point.

Why this Article? Walmart’s successful use of supply chain management principles coupled with leverage by purchase managers has given Walmart a sustained competitive advantage over time.

Introduction

        Founded by Sam Walton in 1962, Walmart came from humble beginnings in Bentonville, Arkansas when Walton purchased a local retailer and renamed his new store “Walmart”. From its inception, Walton was determined to do business differently from his competitors and has now grown his business into the world’s largest retailer. His determination to keep prices low for consumers gave way to many of Walmart’s success which was in no small part was to the successful use of supply chain management. Watching Walmart’s supply chain in action is to witness one of the world’s greatest logistical triumphs and has paved the way for them to operate more than 11,000 stores in over 27 different countries worldwide while maintaining over $32 billion in inventory.

This business model, which has used supplier negotiations and logistical advancements has kept Walton’s vision of keeping prices low and allowing customers to “Save money, Live Better”. Walmart’s goal of having fewer links in the supply chain has been beneficial and was one of the first retailers to specifically seek out bulk purchases for their stores and to work directly with manufacturers to try to achieve a better deal on products of which savings were passed down directly to the customer. Over time, Walmart has become of the chief examples of how to run a successful retail supply chain and has been copied and imitated the world over. I’ve chosen to use Walmart to illustrate how the successful use of supply chain management can allow a company to steadily grow while remaining competitive and supply valuable goods and services at a reasonable cost to consumers.