Walmart's supply chain management and delivery time cycle efficiency

Walmart's Delivery Time Cycle

Walmart is the largest discount retailer in the world, and it has a great deal to offer to the people who shop there as well as those who work there. One of the reasons that Walmart is so successful is because of the way it handles its delivery times and supply chain (Barstow, 2012). While all companies have to make certain they have the products their customers want on their store shelves, Walmart has mastered the ability to keep shelves stocked without having a lot of extra inventory setting around (Gereffi & Michelle, 2009). Items come into the stores, and they are placed on the shelves nearly right away. Very little stock is kept in the back room, which means that space does not have to be large. That allows Walmart to have more actual floor space, where the company can place larger numbers of items for customers to choose from. That is an excellent way to ensure that people who come to the store looking for merchandise will be able to find what they want, and that everything that is offered to them is actually available on the sales floor, instead of being overlooked in the stockroom.

The way items are delivered is important, but when they arrive is even more significant. If Walmart's items come in too late, there will be many empty shelves that will have to be dealt with. That can mean customers who do not find what they want, and who leave without buying anything. Naturally, that is not something that should ever be allowed to happen, mostly because it can cost a company a great deal of money. Explored here is how Walmart handles its supply chain, and the ways in which the delivery time cycle can be used to improve upon the experience had by customers and employees.

Mission, Goals and Differentiation Strategy

The mission of Walmart has always been to have a great selection and low prices (Gereffi & Michelle, 2009). The company has focused on that, and has provided that experience to its customers for a number of years. Even as prices for goods and services have risen throughout the country and around the world, Walmart has found ways to keep its prices lower than the other retailers with which it competes. There are several ways it does that, and they all help to differentiate Walmart from its competition. Many of the products purchased at Walmart are inexpensive because they have been made in other countries, where the labor is cheaper than what would be found for products made in the United States (Fishman, 2006). That does not mean that these products are poor quality, but that they are not designed to be as high-end and to last as long as some of the products from more expensive stores. For most people, the quality of products purchased at Walmart is perfectly acceptable.

Another way Walmart is able to meet its goals is through buying in bulk (Lichtenstein, 2009). It has so many stores, and each one of them holds so much merchandise, that the company buys vast quantities of the goods it offers to its customers. By purchasing in such volume, it can receive discounts that other companies would not be able to get (Walton & Huey, 1993). Some of that savings goes to the company's profit, but much of it is also passed onto the customers. These customers get the products they want at a price they can afford, and Walmart makes a profit. In that sense, everybody wins. It helps that Walmart offers so many different types of products, as well. By doing that, the retailer can get a wider array of customers, and is able to differentiate itself even further from its competition (Vance & Scott, 1997). There are companies that do compete with what Walmart has to offer, but they cannot match both the selection and the prices.

Supply Chain and Value Chain Management

The supply chain of Walmart is relatively complicated. That comes about from the number of suppliers that are needed in order to bring in that many different types of goods. Not all Walmarts carry all of the same products, and some of them have different services contained within them, as well (Barstow, 2012). Hair salons, fast food restaurants, banks, nail salons, eye doctors, and other services can all be found in different Walmart stores around the country (Barstow, 2012). Many Walmarts are also Super Walmarts, meaning they have a grocery section where they carry everything from frozen foods to produce (Barstow, 2012). By having so many different choices, a person who comes to Walmart can get nearly everything he or she needs. It is not just about groceries or a new pair of shoes, since there are a number of great options to look through, right there in the store. Without a strong supply chain and a good value chain that is properly managed by Walmart, the stores would not be able to give customers what they need (Walton & Huey, 1993).

A supply chain matters, because the products absolutely have to get to the stores and to the customers (Walton & Huey, 1993). A value chain is also very important, though, because people who are looking for a product or a service need to feel they are getting value for the money they are spending. If Walmart cannot have the products customers need on their shelves, they will lose business (Gereffi & Michelle, 2009). Additionally, if they cannot show their customers that the products on the shelves have value, they will also lose business. People do not want to pay for something if they feel they are paying too much and not getting a good value for their money (Gereffi & Michelle, 2009). That is especially true for places like Walmart, as many of the people who shop there are on tight budgets and do not have a lot of money they can readily spend. In order to help them stretch their money farther, the company gives them value and plenty of product choices.

Delivery Time Cycle and Competitive Advantage

Any retailer knows that having available inventory is one of the most important things when it comes to staying in business and keeping customers happy (Barstow, 2012). When a retailer does not provide the inventory that is needed, most customers will not wait for the item to come in. They will simply go somewhere else and buy it, provided they can get it, or something like it, for a similar price. By doing that, they stop the first retailer, who did not have the needed item, from making any money. If that happens on enough items, for a long period of time, the retailer can end up in financial trouble and may even go out of business (Walton & Huey, 1993). One of the reasons that Walmart enjoys so much success is because it is very rarely out of the products it carries. Instead of providing its customers with only a few things, it offers such a variety that the vast majority of customers can find what they are looking for -- and that item will generally be in stock, because Walmart understands the delivery time cycle. The understanding of that time cycle is what provides Walmart with most of its competitive advantage.

Companies that can gain a competitive advantage in the marketplace then need to focus on keeping that advantage (Fishman, 2006). Otherwise, there is little point to getting the advantage at all. For places like Walmart, the number of items available, how often those items are in stock, and what the items cost are all significant when it comes to making sure customers are happy. It is not all about price, although that is a serious consideration for many people who shop at Walmart. Without a competitive advantage, Walmart would be just another retailer struggling to survive (Walton & Huey, 1993). That does not mean other stores cannot compete with Walmart, but it is not likely that any will be able to surpass it. The advantages it has are too strong, and they cannot be overtaken or wiped away by other companies.

Conclusion, Recommendations, and Implications

The delivery time cycle is one of the reasons Walmart is doing so well, but it is not the only reason. Instead, it is part of the supply and value chains that Walmart offers to its customers. The company understands that customers have to be able to get what they want, when they want it, and that they need to be able to get it at a price they can afford. If that is not the case, customers will go elsewhere. They may give the company a second chance, but they may not, and retailers cannot afford to lose too many customers. Even though they seem like they are making a lot of money, they can operate on relatively thin margins that can get them into trouble very quickly if they do not continue to bring in plenty of customers who want to buy the available merchandise. Rather than spend a lot of time recruiting new customers, it is easier to keep the ones they have. Walmart does have options to continue to stay on top of the retail game, though. It must focus on keeping its competitive advantage, and it has to be aware that retail can change quickly.

So far, Walmart has been able to change as its customers have changed, so it can stay on top. If it can continue to do that, it will continue to be the top retailer. There are few recommendations to make, since Walmart is already doing well in the marketplace. The only recommendation that can be made for Walmart is to continue to do what it has been doing. Obviously, its choices as a company have been working for it, its employees, and the customers who shop there.