Wal-Mart Supply Chain Essay

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Wal-Mart Delivery Time Cycle

The author of this report is asked to speak to Wal-Mart and their delivery time cycle performance vis-a-vis its benefit to Wal-Mart and how it allows Wal-Mart to remain so dominant in the retail sector. Indeed, there are other big-box stores that closely or loosely match what Wal-Marts sells including Kroger, K-Mart/Sears, Target, and so forth. However, in its half-century or so of existence, Wal-Mart has become the juggernaut of the world retail sector and there is little to no chance of that changing anytime soon barring a cataclysmic even in the retail sector or broader business or cultural world. While Wal-Mart has taken its share of proverbial black eyes for wages and benefits and how much it buys from China, its position as the retail cost leader and how much its supply chain and delivery time cycle figure into this calculus is something that cannot be denied or ignored.


Wal-Mart, as noted in the introduction, is the global leader in retailing and they certainly dominate the United States. To be sure, there are other players in the market and they are not irrelevant. However, there is not a single retailer in the United States that rivals Wal-Mart's blend of hard goods and grocery. Kroger and Target are making a decent amount of inroads but Wal-Mart is still far out in front. One of the main reasons for this fact is Wal-Mart's supply chain. The genius of Wal-Mart's system is that the vast majority of goods replenishment is incurred automatically as goods are sold at the register. Each item is assigned a "max shelf" which defines how much can fit on the floor at a given time and this figure as compared to the count on hand will trigger the order when the count gets to a certain level. Tangentially, the presence of Wal-Mart distribution centers around the United States and broader world allow Wal-Mart to have the vast majority of its goods for sale within a few days reach at most. They use separate receiving bays for grocery and hard goods as the handling for each is obviously very different. Wal-Mart also makes use of what are known as "break packs." These are reusable boxes which are used to send goods that, for whatever reason, are not sold to Wal-Mart or distributed to stores by the case. These loose goods are put into break packs, which are boxes of varying sizes that are bought and used by Wal-Mart. When the boxes are emptied at the store, they are either folded down and sent back to the distribution centers for reuse or, if they are damaged, are recycled along all the other cardboard in the baler. However, Wal-Mart is also careful to not be "too" efficient in terms of delivery. They operate very much on a "just in time" guideline whereby goods are delivered on time and before the shelf is empty but also not to excess. Shipping too much can especially be a problem when a good is perishable or storage space in a store is at a premium (Wal-Mart, 2014).

The above is impressive enough but there is a lot more to tell about Wal-Mart's supply chain and its delivery turnaround time frame. One such dimension is the use of packaging that is both efficient but not excessive. Of course, there is a "sweet spot" whereby goods are packaged well enough to get to the store intact the vast majority of the time but without overdoing it and spending too much on packaging. Wal-Mart suppliers do this and Wal-Mart itself does this with its break packs, its store-marketed goods and so forth. Wal-Mart is unique in that not all companies have the money and resources to use green tools and tricks to a relevant degree but Wal-Mart is certainly one of the companies that has the needed money and resources. In addition to the packaging amount/type equilibrium, there is also the idea of using materials that are biodegradable. Indeed, the vast majority of the goods that Wal-Mart takes on are in cardboard boxes that are emptied, broken down and immediately recycled. However, there are necessary exceptions to this. Bags of dog food, for example, are typically enwrapped in shrink wrap so as to minimize and prevent shifting and toppling in transit. However, most goods do just fine in moderate to small cardboard boxes and all of those boxes are recyclable and biodegradable. However, some other packaging materials that may seem less obvious are coming out of the woodwork. Examples include materials made of ethanol, biomass and other sources that are recyclable and/or biodegradable. Not all customers care about this level of environmental concern but it is certainly on the radar of a lot of current and potential Wal-Mart buyers. In some markets, Wal-Mart goes a bit further with the "green" ideas by having full-fledged recycling centers in their stores. One such store is in Lawrence, KS. This store and others like it show that Wal-Mart itself is committed to being "green" and they help their customers do the same. Indeed, a lot of that recycled product comes from goods bought at that same or a different Wal-Mart store (Dharmadhikari, 2012).

Of course, green initiatives are not always cost-efficient or time-efficient. As such, there are other measures that Wal-Mart has engaged in over the recent or distant pass in one form or another. One thing that is somewhat minimal in the retail sector but is growing in use and prevalence is the use of radio frequency identification (RFID) technology to track and move product. Wal-Mart has been at the forefront of advocating this technology and this has been true for at least the better part of a decade. Indeed, being able to manage and sell goods through automated radio signature management rather than hand-counting or relying on barcodes is very attractive but it takes some major logistics to pull off such technology. However, the overall framework that Wal-Mart uses or advocates as it relates to RFID is quite brilliant. A radio tag on a good transmits to a receiver and the signature is then used to update the database regarding the movement or change that just occurred. This means no manual handing and even automation already in place can be executed even quicker than with prior-established technology. The benefit to Wal-Mart and other adopters of the technology is quite obvious. Less human intervention and management is needed and goods can be allocated and routed to the stores in a quicker fashion. The same technology could be used at the store level as a way to more accurately track inventory and in real time. This can wash out or make obsolete miscues at the sales registers such as ringing up to different varieties of a good using the same bar code or something else along those lines. Indeed, the RFID framework can be used for the inbound and outbound goods movement function and this is true at the store level as well as the distribution center level. If taken far enough, people could ring up their purchases at a store without removing anything from the cart except to bag it for transport home. This would be a dream compared to manually ringing up everything as is the norm for now (Langer, 2007).

Wal-Mart has also been able to leverage its resources to ensure efficient and complete deliveries in areas like China. To be sure, the infrastructure, culture and supply chain capability of China is an entirely different animal than it is in the United States. While the two countries are comparable in terms of aggregate gross domestic product (GDP), the country of China has 3-4 times as many people as the United States and the overall standard of living and work conditions in that country are vastly different on a number of levels. Further, China can have situations such as protectionism and the like. While this is not absent from the United States and other Western markets, it can run rampant in countries like China. However, this is a challenge that any multi-national corporation (MNC) has to face head-on if they are going to operate on a global fashion. The interesting thing about China is that so many of the goods imported and sold in the United States by Wal-Mart come from China but this also does not lead to automatic success for Wal-Mart as they try to sell the same or similar goods in China. Indeed, China making money off exports from an American company is quite a different proposition from a company from American that operates in China. Because of the protectionism, the delivery time mandates and arrangements can be harder to create and maintain. However, Wal-Mart does fairly well as it is quite good at acclimating to the culture and rules of different countries (Huffman, 2003).

A huge buzzword when it comes to delivery, just-in-time and supply chain discussions is sustainability. In addition to what has been mentioned before, Wal-Mart has actually…[continue]

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