Supply Chain
Beginning in the 1980s, Walmart began working directly with the manufacturer. The supply chain design cut links, shortening the chain, to cut costs early on. Their supply chain initiative was referred to as Vendor Managed Inventory (VMI). In this initiative, vendors became responsible for managing their products in Walmart’s Warehouse. As a result of this method, Walmart was able to fulfill close to 100% of their orders.
In 1989, their supply chain methods were recognized for their efficiency. Walmart was named “Retailer of the Year” because their distribution were estimated at 1.7% the cost of their sales. Their competitors costs like Kmart and Sears were evaluated at 3.5% and 5%, respectively.
The techniques that contributed to their success were strategic sourcing and cross docking. In practicing strategic sourcing, Walmart find their products at the best price from suppliers to meet their demand. They establish strategic partnerships with most of their vendors offering potential for long term connections and high volume purchases in exchange for lowest prices. This technique also streamlined Supply Chain Management by creating networks with suppliers to improve material flow with lower inventories when necessary. This type of operation has often been referred to by managers as behaving almost like a single firm.
The centerpiece of Walmart's strategy is cross docking. This is the logistics practice of unloading materials from incoming shipments directly into outbound transportation vehicles. This cuts costs by leaving little to no storage or handling time. Products are shipped to Walmart's Distribution Centers and the operation is shipped further from there. This is effective in its ability to lower inventory and transportation costs, reducing transportation time and eliminate inefficiencies.The credit for their efficiency in supply chain management is due to their information technology. Walmart currently has the largest information technology infrastructure for a private company in the world. They state of the art technology and network design, allowing accurate forecast of demand, the ability to track and predict inventory levels, create highly efficient transportation routes, and manage customer relationships and service response logistics.
"Supply Chain Management is moving the right items to the right customer at the right time by the most efficient means, and no one does that better than Walmart."
- Army Colonel Vernon Beatty
Military Training with Industry Program
Sustainability
In an attempt create sustainable processes, ten years Walmart began to set goals to "be powered by 100% renewable energy, to create zero waste, and to sell products that are sustainable to people and the environment. In executing this goal, Walmart instilled a Global Responsibility Report. Their priorities include promoting responsible sourcing by supporting the growth of small business, women-owned business and support local and small farmers. They also want to reduce the environmental impact through considering their effects on the environment not just in retail, but on all levels of the value chain. Walmart plans to provide access to affordable, safer, healthier food and products by working with suppliers to promote innovation and transparency in bringing customers the best options. Lastly, Walmart hopes to support their measurement and transparency by fulfilling customer desires to be fully informed about the products and allowing a measurement system to which customers can be confident about Walmart's sourcing.
The corporate strategies to achieve their sustainability goals include reducing greenhouse gas emissions, reducing waste, and advancing water and land stewardship.
Their methods to reduce gas emissions include the following:
To reduce waste, Walmart plans to distribute their waste in the following ways:
To advance and land stewardship, Walmart institutes water-efficient equipment and fixtures, which includes their faucets, urinals, water cooling towers, garden centers, and landscaping. They also manage and measure their water use, similar to their implementation of energy measuring. Walmart deploys water treatment facilities at some of their locations to treat and recycle water. Some locations in Africa, Mexico and the United States implemented rain water harvesting technology to offset the facilities demand for water.
Rainwater Harvesting Mechanism
No comments:
Post a Comment