As reported here by AFP, Wal-mart’s quarterly profits jumped 3.2% for the quarter ended October 31, 2009, compared to the same quarter last year.
Nothing unexpected really, except that this is 2009, predictions of recession having ended are still iffy at best and not many retailers are doing better than what they were doing a year earlier. The same news article reported Mike Duke, Walmart’s president and chief executive officer saying of the results: “Increased productivity and improved inventory management led to a better customer experience and contributed to our strong financial performance.”
Wal-mart’s laser-sharp focus on supply chain is not lost on anyone. This is just one more time it has proved the value of the investments that Wal-mart had made into its supply chain.Increased productivity and inventory management are both results that can be achieved through better supply chain planning and operations. Optimizing inventory can lead to lower operating cash requirements by lowering the amount of inventory in the supply chain. Productivity improvements can be achieved in the stores and the warehouses. Wal-mart pioneered the cross-docking concepts for distribution that lowers inventory and increases the distribution efficiencies.
Since supply chains control a wide scope of operations for a retailer, reviewing the supply chain processes with the intent of creating competitive advantages almost always pays off. Ignore your supply chains at your own peril!
© Vivek Sehgal, 2009, All Rights Reserved.
Want to know more about supply chain processes? How they work and what they afford? Check out my book on Enterprise Supply Chain Management at Amazon. You will find every supply chain function described in simple language that makes sense, as well as see its relationship to other functions.