Wal-Mart Used Technology to Become Supply Chain Leader

by Todd Traub  on Monday, Jul. 2, 2012 12:00 am  

“Two IBM 370-148 computers record performance of each store daily,” Wal-Mart bragged in its 1979 annual report.

Wal-Mart’s approach meant frequent, informal cooperation among stores, distribution centers and suppliers and less centralized control. Furthermore, the company’s supply chain, by tracking customer purchases and demand, allows consumers to effectively pull merchandise to stores rather than having the company push goods onto shelves.

In recent years Wal-Mart has used radio frequency identification tags (RFID), which use numerical codes that can be scanned from a distance to track pallets of merchandise moving along the supply chain. Even more recently the company has begun using smart tags, read by a handheld scanner, that allow employees to quickly learn which items need to be replaced so that shelves are consistently stocked and inventory is closely watched.

RFID and smart tags are just the next generation in supply chain innovation that dates back to the 1960s, when Sam Walton personally attended an IBM school in upstate New York with the intention of landing experts to computerize operations.

Wal-Mart reaps the benefits of its supply chain management in time saved, faster inventory turnover, increased warehouse space and accurate forecasting of inventory levels.

“They really understand that if I’m going to build some stores and build some distribution centers, how am I going to service them?” Crowell said. “If you look at some of their competitors, sometimes they would put a store in and then think, ‘How am I going to service it?’”



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