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How Walmart Uses E-Commerce in Its Supply Chain

In: Business and Management

Submitted By Ambrosi
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How Walmart Uses E-commerce in Its Supply Chain

In 2011, Walmart’s sales amounted to $419 billion and were ranked first in Fortune 500’s list of world’s largest companies by revenue. (Walmart 2011). What contributed to Walmart’s success? With heavy investment into their supply chain management system it has enable them to reduce overall costs, minimize inventory levels, and optimize logistics and distribution thus making them more successful. Analysis will be made as to why Walmart is concentrating on supply chain projects, why some suppliers are not in compliance with mandatory RFID tags, and how e-commerce improves transaction processing.

Why Walmart is Concentrating on Supply Chain Projects
Walmart is investing heavily in projects to constantly improve their supply chain which will allow them to lower overall costs and increases profit margin. An illustration of this is that prior to the efforts on supply chain management in 2002, on sales of $218B, they generated a return of 3%. In 2011, their profit margin increased to 6.1% while doubling revenue. By constantly upgrading the management of product through the various distribution channels and the process in which consumers receive products, time and money can be saved by Walmart which in turn benefits the consumer. In order for Walmart to remain successful on a global level, being competitive is the key. To be competitive in the “front of the house”, they must remain competitive in the “back of the house”. In order to maintain Walmart value proposition, it must always be aware of bigger and better ways to get things done.
One method that Walmart utilized to improve their supply chain is data mining. Data mining is the process of examine Walmart’s large information warehouses to discover patterns of distribution to give the analysts the necessary information to create a better distribution system…...

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