Walmart is the world’s largest retail chain store in terms of global market reach and size. The company is operating its business in a changing business environment where the store has to deliver customer orders efficiently and effectively. While dealing with the supply chain and optimizing its operations, Walmart is facing various types of issues. Today, we’ll discuss Walmart supply chain problems; and how the chain store company deals with them.
Before jumping into the discussion of Walmart supply chain problems; it is significant to know that Walmart supply chain management comprises various activities involved in managing, producing, manufacturing, and distributing goods to the customers. Some of the main activities involved in the SCM process of Walmart are as follows;
- Sourcing of raw materials and supplies
- Production and manufacturing
- Assembling of goods
- Distribution of finished goods to retail stores
Walmart Supply Chain Problems
Some of the main Walmart supply chain problems are as follows;
Complex Mega Size & Operations
Walmart has a network of more than 10,000 stores and 2.2 employees, and the chain store company is operating its business in over 24 countries across the world. When you are dealing with such a mega size and sheer volume of operations, then SC and logistical problems would come up. One of the key problems the company faces is its missive size and complicated SC operations.
However, Walmart is dealing with a vast network of suppliers, distribution centers, and stores; thousands and millions of products and goods are flowing in the complicated SC network. It is difficult for the company to establish coordination among all of its activities and processes. The company has to deliver products and goods to the retail store cost-efficiently.
The other SC problem Walmart needs to address is the sourcing of materials and raw supplies from various suppliers and vendors. Thousands and millions of suppliers offer supplies and materials to the chain store brand. The company has to maintain a professional relationship with all of them and deliver the right quality product to the right customers at the right time.
In order to perform various processes correctly; the company needs to implement the right tools, systems, and advanced procurement processes for managing and tracking the performance of suppliers and vendors.
It raises another concern and that’s the sustainability of SC processes and networks. It means that Walmart should make sure that they are implementing sustainable strategies and technologies; decreasing the carbon and greenhouse effect.
Inventory management is the other problem that Walmart faces; maintaining the perfect balance of stock is highly difficult. The retail chain store company has a network of warehouses and stores across the world; the company needs to maintain a balanced inventory at various locations to satisfy customer orders. The company doesn’t have to carry the cost of inventory and unsold products. However, the company requires access to the inventory in real-time and integrates it with online and offline operations to amplify the speed and efficiency of its SC operations.
Changing Retail Industry
The key SC challenge Walmart faces is to operate its business in a rapidly changing environment. The online shopping trends have compelled Walmart to implement the changing SC operation to keep up with the pace. It would require the company to invest in the latest technology and processes to amplify efficiency and speed, and the company should integrate online and offline processes.
Increasing fuel prices and high delivery and transportation costs have made it difficult for Walmart to achieve cost efficiency. The company should consider renegotiating the transportation cost.
How Walmart Deals with SCM Problems
Let’s discuss the steps that Walmart takes to deal with supply chain problems are as follows;
Data analytical technology is the solution to most of the company’s problems. Many sources have confirmed that Walmart has invested a significant amount of resources in AI, machine learning, and data analytical technology to amplify its SC operations. It allows the company to gain a key insight into the company’s operations, rightly analyze various orders, recognize potential issues, and find ways to deal with them.
Collaboration & Partnerships
Developing strategic partnerships and alliances with suppliers and vendors would resolve various problems. Walmart has already established partnerships and alliances with companies to share expertise and resources. It would help the company to look ahead and deal with various SC challenges. For instance, Walmart partnered up with IBM for the development of blockchain technology, which would help the company amplify tracking capabilities and achieve transparency in the SC processes.
Conclusion: Walmart Supply Chain Problems
After an in-depth study of Walmart supply chain problems; we have realized that Walmart is the world’s largest retail chain store brand and company. If you are learning about the SC challenges impacting Walmart, then you should keep in mind the abovementioned problems and steps on how to deal with them.
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