Walmart
Uploaded by
juma emmanuelWalmart
Uploaded by
juma emmanuel1
Walmart's Management Approaches
2
Walmart's Management Approaches
Walmart's unparalleled success in the retail world is attributed to unending efforts at cost
leadership, which are realized through highly effective and efficient practices in supply chain
management. It serves as a beacon of effective strategic partnerships with an increased ability to
efficiently control costs through perfect planning and the application of innovative technologies
for quality service. Here are four reasons that explain why Walmart has been able to achieve cost
leadership through supply chain management:
Economics of scale: Its massive size allows Walmart to use its purchasing power to reduce
the prices of goods with suppliers, making bulk purchases at very low unit costs. These
economies allow Walmart to transfer savings to consumers while ensuring nice profit
margins.
Advanced Technology Integration - Walmart has highly invested in advanced technology
tools such as inventory management sources of just-in-time systems, RFID tracking, and
predictive analytics (Mehrotra et al., 2024). They control levels of stock, diminish stockouts,
reduce shrinkage, and optimize overall supply chain efficiency.
Just-In-Time Inventory Management: Pioneered by Walmart, it is based on holding the
minimum inventories that shall help avoid storage costs and decrease waste (Lin, 2019).
Through a tight reign over logistic processes that stay very close to the demand patterns as
they are established, Walmart keeps the level of stocks as low as possible without risk to
product availability, therefore minimizing carry costs and obsolescence.
Efficient Distribution Network: Walmart has a very sophisticated chain of distribution
centers, located in such a manner as to incur the minimum possible transportation expense
and at the same time improve delivery time (Mehrotra et al., 2024). With the revolutionary
3
routing algorithms in place, cross-docking facilities ensure that there is the most effective and
rapid movement of goods from the suppliers to the retail stores to inculcate reduced transit
time and cost of transportation.
4
References
Mehrotra, P., Fu, M., Huang, J., Mahabhashyam, S. R., Liu, M., Yang, M., ... & Furner, J.
(2024). Optimizing Walmart’s Supply Chain from Strategy to Execution. INFORMS
Journal on Applied Analytics, 54(1), 5-19.
Lin, R. (2019). The importance of successful inventory management to enterprises: A case study