1. Walmart’s Global Supply
Chain Management System
An Analysis of Technological Advancement
in Supply Chain Networks (Retail Link
System)

2. Identify the problem or situation that needs to be
managed. (Situation Appraisal)
The overall opportunity to fulfill Sam
Walton’s vision of a company that
can:
• Improve sales
• Constantly reduce costs
• Adopt efficient distribution and
logistics management systems
• Using innovative information
technology tools …
is a persistent battle between operative
and strategic business acumen.
The ability to develop and maintain
such a cognitive system of supply
chain management will call upon all
facets of the organization internally as
well as factors externally such as
suppliers, manufacturers and the
consumers.
Walmart always approached their
supply chain system proactively. In
an effort to maintain competitive
advantage in a global market place
where time and accuracy is of the
essence, there is no time to only have
reactionary management practices.

3. Gather data and research information.
Walmart made it a strategic practice to identify their core customer base which
were small towns throughout the United States. They understood the fact that
consumers in these towns wanted:
• low prices every day
• customer satisfaction guaranteed
• hours that were realistic to the way people shop
The data showed that the current competition in these small towns had:
• 45% mark ups on merchandise
• limited selection of goods
• business hours not conducive to the times customers had free to do their shopping

4. Distribution Metrics
Target KPIs (Key Performance
Indicators)
Walmart maintains an 85% flow of
goods to stores through its distribution
network
Delivery of goods to stores <= 48
hours.
Transportation cost of 3%
High inventory turnover rates (less old
stock and min storage costs)
Average Industry KPIs
Competitors supplied roughly 50-65%
of the inventory directly from
warehouses.
5 days to replenish store inventory
Transportation costs of 5%
Low inventory turnover rates (more
aged stock and storage cost)

5. If potential negatives are identified, look for options that will avoid, remove
or more advantageously create more opportunities.
Potential Negatives
More trailers than available dock doors
for unloading
Strict unloading schedule:
• Trailers received in morning and
afternoon only
• Trailers unloaded in evenings only @ 2
hour windows
• No early unloads if drivers arrived
ahead of schedule
Potential Opportunities
Cross docking methods were
implemented in order to facilitate
management of individual store orders
communicated with suppliers through
the “retail link system.”
• Reduced overall size of orders
• Reduced unloading times at stores
• Increased storage space in warehouses
and stores
• Reduced old stock and stock outs

6. Break options down to examine Pros
The ability for suppliers and stores to communicate through this system on a
daily basis makes the distribution process more efficient.
This first was maximized by allowing cross-docking of orders to almost eliminate
old stocks and maintained quality of goods.
Inventory costs were reduced since orders were pulled to ship directly to
respective stores.
In some instances, depending on geographical location and lead time, stores
could get orders the next day.
Indirectly helped decentralize management decisions about merchandising,
pricing, and promotions that historically had been centralized and made at the
corporate level.
• It has been proven through Organizational Theory that the more decentralized decision
making is in respect to operations, the better the ability of those directly making those
decisions will impact their departments in a more organically positive way.

7. Break options down to examine Pros (cont.)
Dynamically, the system of managerial control shifted from “supply chain” to
“demand chain.”
• This means that customers (retail stores) could “pull” what they needed
when they wanted and where they wanted it instead of having items
“pushed” on them from retailers.

8. Break options down to examine Cons
The cons to this system:
• There will be an increase in individual shipments on a daily basis.
• It was already established that trailers were sitting waiting to be unloaded.
• There were set schedules for unloading and drivers were not allowed to be
unloaded if they arrived early. This will be even less effective with the
increased volume
• Unloading was only done in the evenings. Will not be efficient to support
higher volumes of deliveries.

9. Create scenarios and evaluate outcomes
(assessment of each option)
Establish new operation procedures for extended unloading hours
Shorter unloading windows once trailers arrive.
• Pay by Performance incentive program - Engineered Labor System (ELS)
Dedicated team, doors, and equipment for unloading incoming product to the
DC.
Temporary area for unloading (TEMP-SAT)

10. Calculate and analyze the risk involved in each
potential outcome.
Quantify and measure KPI metrics of new procedures compared against current
KPI measures under existing procedures for unloading.
• Data gathered from ELS program
Allow main suppliers like P&G to invest in establishing better distribution
channels to service Walmart DC networks as well as stores. This will minimize
the risk further of product outs.
• Joint venture in strategic planning and placement of Mega Distribution Centers with
P&G (2014)
Conversion to a satellite communication system as a contingent plan will save
time and money, plus keep operations going in the event of a major breakdown
or service interruption of internet services.
• This will minimize risk of losing communications throughout the supply chain and
holding up orders shipped to DCs and retail stores resulting in profit loses.

11. Present and accept the best fit option and be open
to feedback.
If ELS data proves individual unloading teams reduced unloading times and
increased trailer turnover, then consider best fit option.
If suppliers are willing to invest in building better channels to service Walmart,
help in that investment to create those channels and continue to foster the
relationship into a partnership. This will be a best fit option strategically as
Walmart continues to expand.
Retail Link System proven to increase efficiency throughout the supply chain
system and is the best fit option for communications within the global supply
chain network.

12. Implementation of the accepted solution and
continued evaluation
Strict procurement negotiation practices
Development and advancement of the retail link system has given them a
competitive advantage far beyond others in the retail industry.
The major connecting link that makes this supply chain unbreakable is its ability
to move products across the distribution network expeditiously.
Walmart has a commitment to process improvement through technology
solutions and constant evaluation of data generated by IT throughout their
global network of suppliers, distribution centers, and retail stores.
The above recommended solutions will help better maintain the already
competitive advantage held in the industry