Walmart currently witnesses the most significant operational and logistic success
Introduction
Big box retailer is the store that occupies big space and provides customers with various products. Such stores reach the cost as a result of efficient production through increased production and reduced commodities costs. The main feature of economies of scale is generally the business size. The enormous the enterprise the best the savings of the cost. Examples of big-box stores include Home Depot, Walmart, Ikea, Costco and, BJs. All the stores, as mentioned above, are located in the building, measuring more than fifty thousand square feet which as planned. Big-Box Stores typically serve customers with a multitude of products and services. For instance, the Ikea store offers home décor and furniture on an unprecedented scale while on the other hand, Walmart has vast diversified products.
Walmart Inc.
Arguably, Walmart currently witnesses the most significant operational and logistic success. It operates in 28countries globally with approximately 11,700 stores with 2.3million employees. Moreover, Walmart manages averagely $32 billion inventory which operates under 59 company names. Walmart has an effective and efficient warehousing strategy and system committed to saving customers’ money and better living. The store provides the customers’ goods and services whenever whatever and wherever they need. Below are supply chain management undertaken by the Walmart
Supply chain links
Walmart supply chain innovation had the few link chain from the earliest stage, and this was put in place by Sam Walton, the founder who selectively bought bulk commodities and ferried them to the stores. In the 1980s, for the store to cut cost and manage the supply chain efficiently, Walmart started directly link with manufacturers. Walmart introduced a supply chain initiative called vendor managed inventory which directed the manufactures to responsibly manage their products in walmart’s stores. Fortunately, the effort put Walmart as the retailer of decades in 1989 with less distribution cost and high cost of sales beating its competitors such as Sears and Kmart.
Types of walmart’s inventory
The most significant Walmart’s stock is Finished goods inventory, the goods arrived in the stores and kept, the list gets replenished frequently to enable the company to distribute the commodities to buyers. The second inventory is transit which aims at supporting the renewal of finished goods in stores. Thirdly, the store uses Buffer inventory in keeping a small margin of surplus assets in stores to curb fluctuation of products.
Bullwhip Effect
A small error can result in big failure translating to extreme costs in the supply chain at Walmart. The company minimizes the propagation of error which takes the form of excessive or inadequate merchandise supply through the vendor managed inventory initiative. Additionally, the action officiates the suppliers to access inventory data of the Walmart hence reducing the store’s employees’ possible errors.