You may know that Wal-Mart runs the biggest chain of discount outlet store in the world and is the largest private employer worldwide with over 2 million workers. However what you might not know is that Walmart is a prime example of how optimized logistical operations can offer businesses the competitive edge they need to out-due their competitors. With the incredible quantity of volume Wal-Mart accomplishes, their efficient supply chain and inventory management is something for the books. Wal-Mart’s refined logistical practices depend upon the distribution technique known as cross-docking.
What Is Cross-Docking You Say?
Cross-docking is when products from a supplier or manufacturer are dispersed directly from the producer or the supplier directly to the customer or the retail chain, with very little handling or storage. Although the cross-docking method has been around since the 1930s, Wal-Mart has actually been said to have promoted the technique, is known in the industry as the cross-docking king.
Wal-Mart embraced this method as a variety of their stores began to increase rapidly, they need to make sure they establish an effective way to obtain product from the distribution centers to their shops.
How Wal-Mart Employs Smart Cross Docking Techniques
Cross-docking has contributed to Wal-Mart’s structured supply chain, which eventually gets the product to the customer faster and less expensive. Wal-Mart has the ability to leverage its logistical volume into core tactical proficiencies. Among other aspects that allow them to continually lower their costs, and acquire a tremendous benefit over their competition.
“Lowered product expenses, minimized stock storage expenses, enhanced inventory management, are simply a few of the continual benefits that Wal-Mart’s supply chain management has been able to achieve using cross-docking.”
Cross Docking Results
The cross-docking strategy has actually been extremely effective for this company due to the fact that they had a few of the essential foundation components already established. The most important of which is a reliable and consistent interaction system.
Since the 1980’s Wal-Mart has utilized a system of Satellite interaction to monitor each transaction at every store. Reliable communication between each link in the supply chain is extremely crucial to consider when looking for reliable cross-docking execution.
The other essential foundation was a reliable inventory management network. Wal-Mart was one of the first adopters of the Universal Item UPC code which permitted them to gather and analyze information on their stock.
Over the last few years Wal-Mart has actually executed a radio frequency network which helps keep consistent, real-time track of inventory. This system enables greater performance in shipments, while likewise supplying details about which items need to be restocked.
Wal-Mart Cross Docking Conclusions
Wal-Mart’s supply chain management is considered the ideal case research study of how imperative supply chain management can be to an organization’s success. There’s also the fact that Wal-Mart has become the home of “Everyday Low Prices” or can use a “Cost Match Guarantee”. There is a lot to be gained from understanding how successful companies accomplish their competitive advantage.