E-commerce in Walmart

WALMART is a perfect example for a logistics class as it has the most efficient supply chain management in the world.

For those who don’t know Walmart, it is an American multinational retailer selling groceries and a wide variety of products at a very cheap price. Its revenues in 2014 were more than $485.000 billion. It has managed it well to have a high bargaining power with suppliers –as it is the biggest retailer in the USA – so he can agree low-priced products –which does not need to mean low quality- from them. Walmart has also strong loyalty with customers.

The article talks about e-commerce, as Walmart was never a pioneer on it, but now it is increasing its investment on e-commerce to catch up Amazon in the race of online costumers.

However, I would also like to explain to you why Walmart manages its supply chain so good and can establish low prices:

Its distribution method is called cross-docking: it consists of unloading products from one vehicle and directly loading them to another with little or no storage in between. There are no warehouse costs. This allows Walmart to speed up the flow, reduce transportation costs and storage costs and reduce inventory.

Moreover, it relies mostly on IT, and inventory management provides information from stores into a centralized database, and this data is shared with suppliers who know when to ship more product.

By: Mireia Sánchez

Source: NewYork Times

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