Walmart’s overall methods of supply chain management differ little from the main components of most supply chains: purchasing, operations, distribution, and integration. But the retailer has refined the methods.
A supply chain begins with purchasing managers who determine which products will sell, find vendors and arrange deals for the products.
The operations portion of a supply chain focuses on demand planning, forecasting and inventory management. Forecasts estimate consumer demand for a product based on historical data, external drivers such as sales and promotions and changes in trends or competition.
Demand planning is used to create accurate forecasts, a critical step toward effective inventory management. Forecasts are compared to inventory levels to ensure warehouses have enough, but not too much, inventory to meet demand.
Moving the product from warehouses or manufacturing plants to stores and ultimately to customers is the distribution function of the supply chain.
Supply chain integration connects the flow of work and information among all links in the supply chain to maximize efficiencies.
For Walmart, its SCM methods yield lower costs for products and inventory, better control over selection in its stores and the ultimate result of lower prices that can be passed to customers, TradeGecko said.