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 1930’s, Wal-Mart has actually been said to have promoted the technique, being 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 organizations 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.