Network Distribution Assignment.
In addition to the case study that sets the stage for this chapter, I don’t think a company exists that has leveraged their supply chain in general and distribution in particular as Wal-Mart. I also know that their story has been chronicled over the years in more magazines, journals and newspapers than you can imagine. I want you to write a short report (2-3 pages – whatever it takes to do a good job) that details the different distribution strategies that Wal-Mart employs and the impact that these have had on their success. Please use the on-line library resource and fine a couple of relevant articles about Wal-Mart and distribution to ...view middle of the document...
Wal-Mart has invested heavily in its unique Cross Docking inventory system which is the process of unloading and loading materials with little or any storage thus avoiding potential inefficiencies in the distribution system. Products are received on one side of the warehouse and leave out of the other side, virtually eliminating the requirement for the storage of goods.
With this system, goods are continuously delivered to stores within 48 hours and often without storing them as inventory. Materials are picked-up directly from the manufacturing plant or from the supplier of the finished goods, sorted and directly supplied to the customers. By focusing on the supply to demand chain Wal-Mart has been able to dispense with the requirement for a centralized distribution system and through there sophisticated IT inventory systems allow customers to pull products the moment they are needed.
The benefits of Cross Docking have resulted in a reduction in material handling and storage of finished goods. It has also provided Wal-Mart a competitive edge by having an efficient supply chain management system that includes the reduction in lead time, quicker inventory turnover, accurate forecasting of inventory levels, Economic Order Point and reduction in safety stock. Overall, the Cross Docking helped in the reduction of storage, labour and handling costs.
Wal-Mart has also adopted a strategy of managing its own In House Transportation Fleet and hiring there own dedicated drivers who to ensure they are ready and responsible to be able to adopt procedures such as the Private Fleet Driver Handbook. This handbook contains check-lists to ensure the safe distribution of goods and the driver’s roles and responsibilities. By monitoring the drivers Wal-Mart is assured that they are able to perform their roles and not cause unnecessary delays which could hamper the efficiency of its supply chain. This has allowed Wal-Mart to replenish their shelves 4 times faster than any of its competition
Wal-Mart’s scheduling process is a well-organised and efficient process for the loading and unloading time of materials providing a constant and smooth flow of its distribution process. Thus Wal-Mart is assured that everything has been unloaded and distributed on time accordingly. The advantage of having an in-house fleet provides Wal-Mart with the benefits of low cost transportation for the delivering of goods to the different stores and distribution centers. It has been said that Wal-Mart’s capabilities of replenishing the shelves, is four times faster than the other competitors. One disadvantage is that Wal-Mart is responsible for the repairs and maintenance of their fleet which could be expensive. However the effectiveness of its in-house fleet transportation system far outweighs this disadvantage.
Wal-Mart owns the largest and most sophisticated computer system in the private sector. It uses a MPP (massively parallel processor) computer system to track stock and...