Walmart has established itself as the largest retailer through efficient supply chain management. It reduces costs by partnering with suppliers, cross-docking products at distribution centers, and using technology like RFID tags to track inventory. RFID implementation has led to a 16% drop in out-of-stock items. Walmart's scale also allows it to negotiate lower prices from suppliers. Its supply chain integration has provided competitive advantages like lower product costs and improved in-store variety and selection.

1. SUPPLY CHAIN MANAGEMENT AT WALMART
INTRODUCTION
Wal-Mart Stores Inc is an American well known discount store in the retail industry that
operates worldwide. Almost everything can be found in Wal-Mart stores and it has
everything a homemaker can ever think of. It is arguably the largest retail chain that
deals with millions of product ranging from furniture’s, clothes, groceries, books,
movies, electronic, jewelries, baby products and much more.
Wal-Mart is currently led by three key people, the CEO; Mike Duke, Executive Chairman;
H. Lee Scott and Chairman; S. Robson Walton. They have over 2 million workers
operating in 6500 stores worldwide. In United States alone, it has 3800 stores with each
store as close as sixty kilometers each.
Wal-Mart’s purchases all the goods right from the supplier without 3rd
party involvement, the
suppliers either senddirectly toWal-Mart centralize distribution centers or to individual stores if they
are nearby with the outlet.Wal-Mart has distribution centers in different parts of United States. Each
centreserves approximately 150storesandsupplies80%oftheinventorytoindividualstores.
WALMART’S METHOD OF MANAGING THE SUPPLY CHAIN
Walmart has been able to assume market leadership position primarily dueto its efficient integration
of suppliers, manufacturing, warehousing, and distribution to stores. Its supply chain strategyhas four
key components: vendor partnerships, cross docking and distribution management, technology, and
integration.
Walmart’s supply chain begins with strategic sourcing to find products at thebest pricefrom suppliers
who are in a position to ensure they can meet demand. Walmart establishes strategic partnerships
with most of their vendors, offering them the potential for long-term and high volume purchases in
exchange forthelowestpossibleprices.

2. Suppliers then ship product to Walmart’s distribution centers where theproduct is cross docked and
then delivered to Walmart stores. Cross docking, distribution management, and transportation
management keep inventory and transportation costs down, reducing transportation time and
eliminating inefficiencies.
Technology plays a key rolein Walmart’s supply chain, serving as thefoundation of their supply chain.
Walmart has thelargest information technology infrastructureof any privatecompanyintheworld.Its
state-of-the-art technology and network design allow Walmart to accurately forecast demand, track
and predict inventory levels, create highly efficient transportation routes, and manage customer
relationships andserviceresponselogistics.
COMPETITIVE ADVANTAGE
Wal-Mart has adopted cost leadership strategy to achievecompetitiveadvantagein themarket. Wal-
Mart’s supply chain management strategy has provided the company with several sustainable
competitiveadvantages.
 Lower product costs
 Reduced inventory carryingcosts
 Improved in-storevarietyand selection
 Highlycompetitivepricingfor theconsumer
 Due to its enormous size and large number of stores worldwide, Wal-Mart has the
tremendous bargaining power withitssuppliersandthusitpurchases productsatlower prices.
TECHNOLOGY
Recently, Wal-Mart became the first major retailer to demand manufacturers
useradio frequency identification technology (RFID). The technology usesradiofrequencies to
transmit data stored on small tags attached to pallets or individual products. RFID tags hold

3. significantly more data than bar codes. During the first eight months of 2005, Wal-
Mart experienced a 16 percent drop in out-of-stock merchandise at its RFID-
equipped stores. Once the products arrive at individual stores, it will be stored and display at the
shelf area. It’s stored above shelf area where it will be retrieveif products on shelf run out. When a
product is purchased by a customer, the RFID reader at check-out counters will read the
purchase and be sent to the Electronic Data Interchange (EDI) System called Retail Link . The
information will be passed to thesuppliers, accounting information system, Texlons Devices and CRM
information system. Wal-Mart shares real time information with suppliers for better
ordering accuracy, and transparency throughout the supply chain. Data’s that are sent to the
Customer Relationship Management will be used fordata mining to make forecast. Marketing
managers in Wal-Mart used data-mine technology to develop replenishment plans for their suppliers
and adjust the composition of market baskets in individual stores. They also can learn about the
behavior of their customers of their purchase decision and sending pattern. Therefore they can plan
for peak seasons, to ensurethat theright materials, supplies and personnel arein therightplaceatthe
right time. If a product is low in stock, theEDI system will alert thestoremanager to makepurchases.
At the same time, thedata will besent to suppliers to alert them to start production. Simultaneously,
the data also is sent to the accounting system will than makeconfirmation for therequest purchase.
Oncetherequest has-been approved, supplier can starttodistribute.
This bring great comfort to managers to exactly know where the product whereabouts and able to
inform the customers the actual date the product will be available. RFID System in Wal-Mart Value
Chain- Implementation and RFID is a method to capture data about a single object without using
human tread the data. The implementation of RFID tags at pallet and case level, Wal-
Mart is able to identify and tracks the products as it arrives at their warehouses until
shelving at thegiantretailer.
 RFIDreduce out-of-stocks
 Makeautomated orderfulfillment
 Improved inventory

4.  Producttracking
 Reduce shrinkage
 Improve product delivery timeby providing visibility into the location of goods with RFID
tags
 Track consumers behavior andbuyingpatterns
(As customer pass by theself servicecheck-out counter, thereader receives thedata fromtheproduct
and charge thecustomer credit card.Using twodifferent systems,it hasreduced queuetime ofthe
consumer.Thus Wal-Mart combining its RFID technology with the CRM package can enhance
customer service.)
There alsosomeriskassociateimplementing RFIDtechnology
Mainlyprivacyissuesand cyber terror
It is possible for competitors to steal information regarding shipments, logistics companies, cost &
sensitiveinformation
Wal-Mart has made their tag with limited range to read and write capability for security purpose.
Privacy issues in United States are taken very seriously by consumer advocacy groups. Their concerns
were that once the consumer leaves the store, that thetag can still bemonitored. They believeit will
be an invasion of privacy as large corporation can monitor their activity. Therefore, Wal-Mart
shouldrevisethesefactorsbefore anyfurther allegations inthefuture.
LATEST TECHNOLOGY
Walmart develops the latest technology to connect stores with the largest data warehouses in the
world, as well as definethenext generation of Walmart stores. Using enhanced data analytics, wehelp
predict what customers will need and want next. We’re streamlining operations and back-room
systems in order to increasetheagility and responsiveness of Walmart’s world-class logistics network.
Our Information Systems Divisionexcels at keeping Walmart streamlined, smart and secure. And
through the innovative fusion of retail, social and mobile, Walmart Labs is redefining commerce and
theconsumer experience forthelargestretailer worldwide.

5. Wal-mart technology group is made up of more than 6,700 visionaries globally as a part of the
Leverage and ecommercedivisions. This growing team uses big data and technology to optimizeretail
operations and business practices and change the way people shop through cutting-edge online and
mobileretailexperiences.
RECOMMENDATION
Supply chains have huge potential to improve sustainable business practices. Firstly with smart
technology such as RFID, Wal-Mart could reduce their carbon emission to improvetheenvironment.
This can bedonethrough their logistic activities that directly contributeto environmental degradation.
It can improve their corporate reputation aswell asfurther improvingoperational
efficiencyandlowering cost.RFID tracking functions can reduce unnecessary truck deliveries and
reduce customer’s visitor thestorefor out-of-stock items. Imaginemillions of shoppers visit Wal-Mart
everyday; a few hundred thousand trips that can be saved will save tons of gallons of carbon
emission.Even within its store, theforklifts that runaround canlocatetheproduct with100% accuracy
reducing carbon emission. With hugesavings on fuel emissions, Wal-Mart and suppliersareabletocut
more cost. This is an opportunity for Wal-Mart to improvethewages system and healthcarebenefits
of their employee. Instead of paying millions of dollars in law suitandout-of-courtsettlement,theycan
pay extra to their employees. This can motivate employees and in return they can give extra
service to the customers. By doing this, in the long run, it will becomea win-win situation for
bothparties.
Conclusion
In conclusion, to understand a company, it is important to analyze its environment and operation.
Therefore understanding the business model, the people, organization and technology in Wal-
Mart provides an overview of its operation. Inspirational leaders, open door policy cultureand
using advance technology have made Wal-Mart the number 1 corporation in the world. Wal-Mart
supply chain is legendary which the company key success factor is. Accompanied with RFID

6. technology in place, it is near to perfection. No organization is perfect thus Wal-Mart
can improve by becoming a more sustainable and green organization. Further exploitation the RFID
technology can create abetter livingwhich liesintheircurrent slogan.
Save Money. Live Better´.