Walmart’s Retail Link

Satyadev Mussai
Where does Walmart’s supply chain start? What triggers
Walmart’s Retail Link system to ship goods to local Walmart
Stores?
• What is Supply Chain Management?
– Supply Chain Management (SCM) includes all the activities that must take
place to get the right product into the consumer’s hands in the right quantity
and at the right time – from raw materials extraction to consumer purchase
Cross Dock System:
Goods arriving on inbound trucks from manufacturers were unloaded and
reloaded on outbound trucks within 24h. This eliminates the need for extra
storage
 Retail Link System (RLS)
• In 1991, WM invested approx. $4bn to RLS. RLS connects WM’s network with an
extranet, accessible to WM’s suppliers.

• A decision support system gives the supplier 100 weeks of product sales history
and tracks the product’s performance globally and by market. Hence the suppliers
know exactly what goods are being sold and how to plan their production.

• Through a global satellite system, RLS is connected to analysts who forecast

supplier demands to the supplier network, which displays real-time sales data
from cash registers and to WM’s distribution centers.

• Companies then synchronize their demand projections under a collaborative

planning, forecasting and replenishment scheme.

• Use of smart tags, read by a handheld scanner, that allow employees to know
which items need to be replaced so that shelves are always stocked.

• This allows for faster inventory turnover, WM / Supplier collaboration, acute

forecasting of inventory levels
Why is the detailed knowledge of the consumer
purchases at each store important to WalMart
success?
• Detailed Knowledge of the customers is possible thanks to Big data
analysis is essential for Walmart success because:

• Offer better services to customers:

– Offer products needed by geographically regions
– Know local culture (Texas sells more hats)
– Local perceptions (California for its wine)

• Forecast needs:
– Weather conditions (more sales of Strawberry ice cream during storm
seasons)
– Product always available; hence assuring continuous supply

• Marketing:
– Increase brand equity thanks to amazing service
– Achieve top of mind
Why can't other large retailers easily duplicate
the Walmart's Retail System?
• The investment Walmart has made in supply
chain management and the fact that it has the
largest IT system of any private company in
the world, make it a strong global force that
other retailers cannot easily duplicate.
• Examples of the use of MIS
– Store Keeping Units
– Business Intelligence and Data Mining
– Inventory Management
 Walmart’s Business Model
• Focused on continuously improving operations (thanks
to R&D and Innovation), lowering costs and improving
customer service

• Effective management the supply chain (thanks to MIS

Structure)

• Leading edge of logistics, distribution, transportation

and technology

• Unmatched economies of scale

Why does Walmart encourage its vendors to learn
how to use Retail link?

• Wal-Mart is committed to improving operations,

lowering costs and improving customer service. But the
key to retailer Wal-Mart’s success is its ability to drive
costs out of its supply chain and manage it efficiently.

• Every Wal-Mart store operates like a small company.

Store managers are trained to manage one store at a
time, one department at a time, and one customer at a
time. With established vendor partnerships with top
manufacturers, Wal-Mart has implemented advanced
logistics solutions like RFID (radio frequency
identification).
• Wal-Mart is leaning on its vendors to work with transportation and
logistics providers to consolidate less-than-truckload deliveries into
truckload freight before it reaches a store.

• Wal-Mart wanted more and smaller deliveries faster, something of

a challenge when goods are coming from overseas in bulk.

• The company suggested vendors partner with carriers and logistics

providers to have their LTL freight consolidated into truckloads at
third-party distribution centers.

• Wal-Mart offers its online Retail Link software for vendors to enter
and review purchase orders, make carrier appointments and get
data on consolidated loads. It compiles vendor scorecards to assess
on-time performance and other metrics.