Walmart is an American multinational retail corporation that operates a chain of discount departmental stores and warehouse stores. Known for its working style “everyday lowest price”, the selling proposition of Walmart is that it provides the products at the least price in the market. It has got over 11000 stores in 28 countries, under a total of 65 banners. Walmart does no production on its own and hence just provides the service of making the products available, employing 2.2 million employees and hence becoming the world’s largest company in terms of employees. Also Walmart is the world’s largest company by revenue.
Over the past ten years, Walmart has become the world’s largest and arguably most powerful retailer with the highest sales per square foot, inventory turnover and operating profit of any discount retailer. All this success can be attributed to the logistical and operational triumphs of the retail giant by effective supply chain management. Walmart works in this direction and manages to keep an average inventory of $32 billion, bringing products from over 70 countries.
The biggest issue faced is due to the advent of technology enabling consumers to shop sitting at their homes via online apps. Also changing shopping habits due to increased taxes etc. have affected the sales. People on normal shopping days are more inclined to buy cheaper goods and hence the revenues are falling. Many researchers have also brought into light problems related to internal functioning.
With the right use of technology and excellent implementation of supply chain management and six sigma it has shortened its processes to the extent that today its annual turnover is 500 billion $. The business process reengineering done by keeping in mind the latest changes in technology and the money value of time, since its inception, Walmart has never looked back. Careful calculation and analysis of the current scenario, what the customer wants (customer centricity), demographic characteristics and changing patterns of consumption. Seeing the orientation of people of America towards healthy food, in January 2011, Walmart introduced a program to improve the nutritional value of its brand stores. This was aimed to be achieved in the coming five years, with main focus on reducing the content of sugar, salt and Trans-fats.
Walmart also knows how to harness the power of technology to minimize its cost of work and hence provide the customers with the lowest price and high living standards. An apt example of this can be P&G, which is one of the primary suppliers to Walmart. P&G and Walmart are both major players in their fields and have shown an effective partnership by using information technology, sharing data across their mutual supply chains. Since the activities are well coordinated and effective communication, inventory has been reduced to what the customers actually want. . This integration of the supply-chain information systems will become increasingly important both for enhancing business-to-business electronic commerce and for supporting the increasing volume and customization in business-to-consumer electronic commerce.
Six Sigma is a meticulous methodology that makes use of information management by facts and statistical analysis to define measure and improve a company’s operational performance, practices and systems. Walmart also uses six sigma to find out if a product is good or defective. The aim is to find out the flaws occurring in the sample.