The retail giant, Walmart, is a paragon not only of supply chain management, but also of successful integration of supply chain management into a company’s overall operations. For example, the details of Walmart’s supply chain are staggering. The company operates 160 distribution centers. Every one of its stores is within 130 miles of one of those distribution centers. The company has also adopted cross-docking at those centers, a process in which inventory is offloaded from incoming shipments and immediately sent out to its stores, thus reducing or eliminating inventory holding costs. Walmart’s supply chain grew and evolved over nearly four decades with technology that tracks purchasing, operations, and distribution while feeding all of that tracking information into the bigger picture of cash flow and profits.
Analyzing the companies that have successfully married their supply chain management into their overall structure reveals at least three common features that have led to the success of that combination:
1. Technology that delivers a real-time dashboard to measure and track the supply chain.
ERP supply chain software is a common tool for creating this dashboard. Real- time data tracking that generates reports which are delivered across all internal and mobile platforms gives employees at all levels of a company the critical information they need to handle discrete tasks within their own departments. ERP supply chain software collects and records data automatically to eliminate entry errors and duplicate work.
2. Integration of vendors into the system.
Walmart relies on its vendors and suppliers to manage inventory in its warehouses. This would not be possible unless those vendors had access to the same information about inventory levels that is available to Walmart’s own internal operations. That information includes point-of-sale data and real-time warehouse inventory and sales levels that vendors use to make decisions on when to ship more products into Walmart’s distribution centers.
3. Thorough training of internal personnel.
The starting point of supply chain management is empowering purchasing managers with the information they need to understand how and when products will sell, and then to find vendors and negotiate the best deals for those products. Operations managers then develop the logistical plans to get those products from vendors and onto store shelves. Accounting and finance personnel use purchasing and operations information to manage payables and receivables and to generate reports that big picture management needs to understand and manage the company’s overall structure. Employees at all levels in the system need to appreciate the power of the data generated by ERP supply chain software to complete the fit of that software into the total organization.
When the pieces of a supply chain fit together as intended, managers at all levels of a company’s operations have better insights to do their jobs, which can increase the company’s profitability and position it for growth and expansion. This, in itself, should be sufficient incentive for every company to install an ERP system that integrates supply chain operations into the company’s global efforts.
A company that is looking for the best fit ERP system, whether for management of its supply chain, for integration of a supply chain into its bigger picture, or anything in between, should take care to select a system that is appropriate for the company’s size and that it will coordinate with any existing applications that the company intends to retain. No software system, whether it is an ERP supply chain product or otherwise, will turn a company into the next Walmart, but adopting the right system will position a company to develop supply chain management that rivals both Walmart and every other company that has married its supply chain operations into its big-picture strategy.