Walmart\'s Retail Link System PDF

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Working Capital Management...

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Randa Taher Due: 2/19/20 Professor Elliot Sherman Working Capital Management Walmart’s Retail Link System As a means of differentiating yourself from the competition, a retailer must be focussed on two dimensions. In Walmart’s case, their brand is associated with low prices for a large array of products. These low prices are a direct result of the supply chain process of the company because it highlights how to drive out costs while maintaining shelf stock of various items. The SKUs on the shelf have to be within consumer demands to optimize the margin dollar which requires category management. This ensures that the store will have the SKUs the consumer wants and would propel them to purchase as a means of increasing the gross margin on the market basket. The company does so by managing inventory aggressively to lessen the burden of operating costs. Walmart has eight-plus inventory turns a year across thousands of products in all of their 4000 or more stores. The company has the retail link system in place to address this large volume. The Retail Link is an online hub for the data, documentation, reports, and special applications that suppliers use to manage their business with Walmart. The retail link system gives suppliers more power and autonomy. It provides a way for suppliers to manage their own products because it gives them the ability to monitor their own data to account for changes in sales or inventory volume. By Utilizing retail link the company is able to hand suppliers tangible data by SKU, every hour and in every individual store. They also relay important information to vendors by SKU

including on-hand inventory, inventory turns, metric of GMRO, and the in-stock percentage. This has effectively created a vendor managed inventory system in which the suppliers themselves have the autonomy to decide where to place the SKUs as well as personalize their shipping method preference. This holds vendors accountable for their own KPIs. This helps keep Walmart profitable because they are able to leverage data to maximize margin and keep the lowest level of inventory possible. This allows the company to maintain low inventory without running into the out of stock issue. To achieve the maximum gross margin return on inventory investment, you must be able to maximize the inventory turns while still keeping stock as low as possible. The company runs a risk running very low on the stock to the point where the shelf is empty when the customer tries to purchase an item. To maintain the key brand differentiator, Walmart must make sure that their products are in stock. In terms of the end consumer, the only important aspect of the companies supply chain is making sure that the product is on the shelf at the time of purchase.

Sources: https://blog.8thandwalton.com/2015/08/what-is-retail-link-for/ https://18knowledge.com/blog/walmart-retail-link-talks-to-suppliers-through-data/ https://www.krunchbox.com/making-the-most-of-walmart-retail-link-data...