Animals is a well-known leader in the application of network technology to coordinate its supply chain. Walter’s supply chain is the secret sauce behind its claim of offering the lowest prices everyday. It’s able to make this promise because it has possibly the most efficient EBB supply chain in the world. It doesn’t hurt to also be the largest purchaser of consumer goods in the world. With sales of more than $443 billion for the fiscal year ending January 31 , 2012, Walter has been able to use information technology to achieve a decisive cost advantage over competitors.
As you might imagine, the world’s largest retailer also has the world’s largest supply chain, Ninth more than 60,000 suppliers worldwide. In the next five years, the company plans to expand from around 5,000 retail stores in the United States (including Cam’s Clubs) to over 5,500 and increase its selection of goods. Internationally, continued Chapter 2, Case 1 Walla I Link Supply Chain 2 Animals has over 5,200 additional stores in 26 countries outside the United States, giving it a total of over 10,000 retail units.
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The rapid expansion in Walter’s international operations will require an even more capable private industrial network than what is now in place. In the late asses, Walter developed the beginnings of collaborative commerce using an Electronic Data Interchange (EDI)-based supply chain management system that required its large suppliers to use Walter’s proprietary EDI network to respond to orders from Walter purchasing managers. In 1991 , Walter expanded the capabilities of its EDI-based network by introducing Retail Link. This system connected Walter’s largest suppliers to Walter’s own
Inventory management system, and it required large suppliers to track actual sales by stores and to replenish supplies as dictated by demand and following rules Imposed by Walter. Walter also introduced financial payment systems that ensure that Walter does not own the goods until they arrive and are shelved. In 1997, Walter moved Retail Link to an extranet that allowed suppliers to directly link over the Internet into Walter’s inventory management system. In 2000, Walter hired an outside firm to upgrade Retail Link from being a supply chain management LOL toward a more collaborative forecasting, planning, and replenishment system.
Using demand aggregation software provided by Atlas Metatarsi Software, Walter purchasing agents can now aggregate demand from Walter’s 5,000 separate stores in the United States into a single REF from suppliers. This gives Walter tremendous clout with even the largest suppliers. In addition, suppliers can now immediately access information on inventories, purchase orders, invoice status, and sales forecasts, based on 104 weeks of online, real-time, timeline data. The system does tot require smaller supplier firms to adopt expensive EDI software solutions.
Instead, they can use standard browsers and PC’s loaded with free software from Walter. There are now over 20,000 suppliers?small and large?participating in Walter’s Retail Link network. Ay 2012, Walter’s EBB supply chain management system had mastered on a global scale the following capabilities: cross docking, demand planning, forecasting, inventory management, strategic sourcing, and distribution management. The future of Walter’s SCM lies in business analytics?working smarter?rather than simply aging the movement and tracking of goods more efficient.
For instance, in 2012 Animals purchased Quintet Inc. , a supply chain management tool for improving load assignment and dispatch of trucks for large retailers. Quintet’s software will enable Analyst’s managers to optimize the loading of its trucks and to reduce the time required to supply its retail stores. Despite the economic slowdown in 2011-2012, Analyst’s sales grew. In 2011, Walter’s revenues of $443 billion were up 6. 4 percent from 2010, and its net income was $15. 77 billion, up from $15. 36 billion.