The Supply Chain of Wal-Mart Stores Limited

The reason why Wal-Mart's business can grow rapidly and become one of the well-known companies is that Wal-Mart has made great achievements in cost saving, logistics distribution system and supply chain management.

Steve Jobs, president of Apple, once said that if there are only three IT companies left in the world, it must be Microsoft, Intel and Dell. If there are only two, it will be Dell and Wal-Mart. This is obviously just a joke. Although Wal-Mart is the leader in the retail industry, IT is not an IT enterprise in any case. However, Wal-Mart's persistent pursuit of information technology is obvious to all, and because of this, Wal-Mart's low-price strategy has been tried and tested. Anyone who knows a little about Wal-Mart knows that the low-cost strategy keeps the logistics cost low, which is a trump card for a cheap retailer like Wal-Mart. It is Wal-Mart's consistent business purpose to reduce the cost as much as possible in the process of logistics operation and let the saved cost benefit consumers.

In the whole logistics process, the most expensive part of Wal-Mart is transportation, so when setting up new stores, Wal-Mart should start from its existing distribution center as far as possible, and stores are generally located around the distribution center to shorten the delivery time and reduce the delivery cost. Wal-Mart's investment in logistics is also very concentrated in the construction of logistics distribution centers.

1, a fast and efficient logistics distribution center

Logistics distribution centers are generally set in the center of retail stores above 100, that is, distribution centers are set in major sales markets. This enables a distribution center to meet the needs of more than 0/00 sales outlets in nearby surrounding cities. In addition, the transportation radius is relatively short and uniform, and a distribution center is basically established with a business circle of 320 kilometers.

The order information of Wal-Mart's branches is transmitted to the distribution center through the company's high-speed communication network, and the distribution center formally orders from suppliers after integration. The supplier can send the goods directly to the ordering store or distribution center. Some people describe Wal-Mart's distribution center as follows: the average area of these giant buildings exceeds 1 10000 square meters, which is equivalent to the size of 24 football fields; It contains all kinds of goods that people can imagine, from toothpaste to TV sets, from sanitary napkins to toys, with more than 80 thousand kinds of goods. Wal-Mart has more than 62 distribution centers in the United States, serving more than 4,000 shopping malls. These centers are carefully deployed according to the trade areas of various places. Usually, starting from any center, a car can reach the store it serves within one day.

In the distribution center, the computer is responsible for everything. After the supplier sends the goods to the distribution center, it goes through the procedures of checking the purchase plan and commodity inspection, and then sends them to different locations on the shelf for storage. When each commodity is put into storage, the computer will record their position and quantity one by one; Once the store puts forward the purchase plan, the computer will find out the storage location of these goods, print out a label with the store code and stick it on the goods. The whole package of goods will be sent directly to the conveyor belt, and the scattered goods will be taken out by the staff and sent to the conveyor belt. Commodities go in and out on several kilometers of conveyor belts. The bar code on the conveyor belt can be recognized by laser and sent to the right place. The output of goods on the conveyor belt can reach 200,000 cases a day. For scattered goods, there are some signal lights on the conveyor belt, including red, yellow and green. Employees can determine the store to deliver goods according to the signal light to pick up these goods and put them in boxes to avoid wasting space.

2. Loading table

One end of the distribution center is a loading platform, which can load 130 trucks at the same time, and the other end is an unloading platform, which can park 135 trucks at the same time. The distribution center operates 24 hours a day, with an average of more than 200 trucks loading and unloading goods every day. Wal-Mart uses trucks as big as possible to transport goods. There may be about 65,438+06 meters long containers, which are longer or taller than container transport trucks. This kind of motorcade can often be seen on American highways. Wal-Mart's trucks are all its own, and the drivers are also Wal-Mart employees. They run on the highway between American States, and every cubic meter of the car is filled with oil, which is very helpful to save costs.

The company's more than 6,000 transport trucks are all equipped with satellite positioning systems, and the headquarters can see the location, cargo and destination of each vehicle at a glance. Therefore, at any time, the dispatching center can know where these vehicles are and how far they are from the store, and also know where a commodity has been transported and how long it will take to get to the store. In this respect, Wal-Mart is accurate to the hour. If employees know that the arrival time of the motorcade is delayed due to weather, road maintenance and other reasons, the stevedores can arrange other work instead of waiting.

Flexible and efficient logistics and distribution make Wal-Mart have an advantage in the fierce retail competition. Wal-Mart can guarantee that the delivery time of goods from the distribution center to any store will not exceed 48 hours, and the shelves of Wal-Mart stores can be replenished twice a week on average, while other stores in the same industry can only replenish goods once every two weeks on average; By keeping as little inventory as possible, Wal-Mart not only saves storage space, but also reduces inventory costs.

In the study of American retail enterprises, the economist Dr. Si Tong found that among the three major retail enterprises in the United States, the proportion of commodity logistics cost to sales was 1.3% for Wal-Mart, 8.75% for Kmart and 5% for Sears. If the annual sales amount is $25 billion, the logistics cost of Wal-Mart is $65.438+$86.25 million less than that of Kmart and $425 million less than that of Sears, which is staggering. One end of the distribution center is the loading platform and the other end is the unloading platform, so the two operations are separated. It looks no different from the way of loading and unloading, but the working efficiency is greatly improved. The distribution center is a large warehouse, but it is conceptually different from the warehouse.

Cross Docking CD(Cross Docking) works in a unique way and is extremely efficient. When the goods are purchased, they are directly loaded and delivered, and there is no warehousing and sorting operation, which reduces the cost and speeds up the circulation.

800 employees work in shifts 24 hours a day, and the wages of Wal-Mart workers are not high, because these workers are basically junior high school students and high school students, and they are only specially trained by Wal-Mart.

The goods stay in the distribution center for no more than 48 hours. Wal-Mart has tens of thousands of goods to sell, including food, clothing, housing, use and transportation. In particular, the residence time of food, fast-moving consumer goods and other commodities directly affects the use.

How does Wal-Mart continuously improve the organizational structure of its distribution center?

Every store delivers goods 1 time every day (competitors deliver goods 1 time every five days), and at least once a day means that the inventory in the store or retail store can be reduced. This greatly reduces the cost of retail space and manpower management. To achieve this goal, we must constantly improve the organizational structure, so that the establishment of the operating model can meet this demand.

190 There were 14 distribution centers in the world, and 70 distribution centers were established in 5438+0 in 2006. As a Fortune 500 company, Wal-Mart operates only in a few countries, and only in areas where it is sure to develop. Wal-Mart is very cautious in its operation, and under such circumstances, it has grown to 70, indicating that the organizational structure adjustment of its logistics distribution center is in place.

Distribution cost accounts for 2% of sales, which is 50% of competitors' (while only 50% of competitors' goods are distributed centrally). Wal-Mart's distribution cost accounts for 2% of its sales. Generally speaking, the logistics cost accounts for about 10% of its total sales, and some food industries even reach 20% or 30%. Wal-Mart's consistent philosophy is to sell the best things to consumers at the lowest price, which is also where its success lies. In addition, only 50% of competitors' goods are distributed centrally, while more than 90% of Wal-Mart's goods are distributed centrally, and only a few of them can be sent directly to the store from the processing plant, so the cost is much different from that of competitors.

Application of logistics information technology;

Wal-Mart's success is largely due to the ingenious combination of cutting-edge technology and logistics system of its leading competitors for at least 10 years. As early as 1970s, Wal-Mart began to use computers for management. In the early 1980 s, they spent another $400 million to buy commercial satellites and realized global networking; In 1990s, the world-leading satellite positioning system (GPS) was adopted to control the company's logistics, which improved the distribution efficiency and won the satisfaction and loyalty of users with speed and quality.

All Wal-Mart's systems are based on a distribution system called UNIX, and adopt conveyor belts and a very large open platform, as well as product coding, automatic replenishment system and laser identification system, which have saved considerable costs for Wal-Mart. Wal-Mart has always advocated the adoption of the most modern and advanced systems, reasonable transportation arrangements, and ultimate success through computer systems and distribution centers.

Establish the world's first logistics data processing center;

In 1970s, Wal-Mart established the Logistics Management Information System (MIS), which was responsible for processing system reports and speeding up operation. In the early 1980s, Wal-Mart cooperated with Hughes to launch a logistics communication satellite, which made Wal-Mart develop by leaps and bounds. 1983 adopts POS machine, namely point-of-sale data system. 1985 established EDI (electronic data interchange) system, which is paperless and all information is operated on the computer. 1986 established QR, that is, rapid response mechanism to quickly stimulate market demand.

Wal-Mart is the first in the world to realize 24-hour computer logistics network monitoring within the group, which integrates procurement, inventory, ordering, distribution and sales. For example, customers shop in Wal-Mart stores and then print invoices through POS machines. At the same time, the information will be displayed on the computers of the personnel in charge of production planning and procurement planning and suppliers, and each link will complete their work in time through the information, thus reducing a lot of unnecessary time waste and speeding up the logistics cycle. Radio frequency technology /RF (radio frequency) can be used in combination with bar codes in daily operations.

Portable data terminal equipment /PDF, the traditional way is to make a phone call, send an email or send a report after the goods arrive, and the goods can be directly inquired through the portable data terminal equipment.

Logistics bar code /BC, using logistics bar code technology, can collect and track enterprise logistics information timely and effectively.

Radio frequency identification (RFID) is a non-contact automatic identification technology. It can automatically identify the target object and obtain relevant data through radio frequency signals. The identification work can work in various harsh environments without human intervention.

In 2004, Wal-Mart, the largest retailer in the world, required its top 65,438+000 suppliers to use RFID technology when sending pallets and packing boxes to its distribution center before 65,438+0 in 2005, and put them into use in a single commodity before 65,438+0 in 2006. Experts predict that from 2005 to 2007, Wal-Mart suppliers will use 5 billion electronic labels every year, and Wal-Mart will save 8.35 billion dollars every year. About 5,000 sets of RFID systems have been installed around the world, with actual annual sales of about 964 million US dollars.

With these information technologies, Wal-Mart has made great progress.

The meaning of logistics includes not only the flow and storage of materials, but also the degree of cooperation between upstream and downstream enterprises. Wal-Mart's success is largely due to its "seamless point-to-point" logistics system. "Seamless" means to make the whole supply chain reach a very smooth connection. Wal-Mart refers to the supply chain, which means that the process from the factory to the store shelves should be as smooth as possible, just like a seamless coat. In the supply chain, every supplier is a link in this chain, and Wal-Mart makes the whole supply chain a very stable, smooth and smooth process. In this way, Wal-Mart's transportation, distribution, order and purchase processing are all part of a complete network, which greatly reduces the logistics cost.

In terms of connecting upstream customers, Wal-Mart has a very good system that allows suppliers to directly access Wal-Mart's system, which Wal-Mart calls the "retail link". Through the retail link, suppliers can know the sales situation at any time, predict the future demand for goods and decide the production situation, so that their product costs can also be reduced, thus making the whole process a "seamless" process. The success of Wal-Mart can be said to be an organic combination of excellent business model and advanced information technology application, and it can also be said that Wal-Mart has surpassed the status of "commercial retail enterprise".

Through the above analysis and research on Wal-Mart, we can find that the most impressive thing about Wal-Mart is its advanced and efficient logistics and supply chain management system. Wal-Mart's distribution centers, chain stores, warehouses, cargo transport vehicles and partners (such as suppliers) around the world are all managed and optimized through this system, forming a flexible and efficient product production, distribution and sales network. To this end, Wal-Mart even spared no expense to buy logistics satellites to ensure the information transmission of this network.

The successful experience of Wal-Mart may make a considerable number of enterprises in China feel "sighing at the ocean", not to mention that Wal-Mart has its own satellites and large servers all over the world. Just because each of its cargo carriers has a satellite mobile computer system, it is difficult for China enterprises to follow suit. Similarly, the IT investment and upgrade management costs of maintaining this huge network are not affordable for most enterprises.

Many enterprises in China are stepping up information construction, and some of them are also implementing and applying supply chain management systems, but the results are hard to compare with those of Wal-Mart. The reason is that some supply chain management software is more developed by IT technicians and programmers, and the management ideas and concepts representing the world's advanced level are difficult to imitate. On the other hand, when building a nationwide supply chain management system, enterprises in China may encounter difficulties in terms of experience, personnel and funds, and more often they are faced with the problems of weak basic management and low overall informatization of domestic enterprises. In the trend of global logistics and supply chain management triggered by "Wal-Mart Phenomenon", China has gradually become the manufacturing center of the world, and is welcoming a good opportunity for the development of logistics management and supply chain management.