CASE STUDY: LOGISTICS AT

WALMART
Logistics is one of the fundamental factors for success of a retail organisation. Nowadays,
spike in the level of competition among retailer organisations has waged a price war in the
industry. As a result, a majority of retail organisations are constantly trying to reduce
operational costs and providing finished goods at low prices to customers. Therefore,
many retail organisations are sourcing materials from different global sources from which
these materials are available at cheap rates. Established retail organisations such, as
Walmart, ship agricultural products from India, China and Brazil. Managing a global logistical
network is a highly intricate task. It involves managing thousands of suppliers from wide
geographical locations along with managing the logistics networks, warehouses, storage
facilities, transport systems, etc.
For example, a retail organisation like Walmart owns about 3,000 long-haul trucks and
12,000 trailers for the transportation of materials. On the other hand, Walmart’s
competitors depend on outsourcing the transportation of materials. Walmart efficiently
utilizes information technology in increasing the effectiveness of its logistics activities. A
number of distribution centers of retail organisations are linked via advanced information
technology tools to ensure viable coordination.
A highly effective logistical system of Walmart has enabled it to source materials globally. It
has helped Walmart keep the operational costs low and deliver its promise of making
finished goods available at low prices. Highly efficient logistics is the prime reason behind
the highly satisfied customers of Walmart.
Questions:
1. How has logistics helped Walmart?
Ans. Walmart to maintain the competitive advantage needed to source best quality
products from different parts of the world. Well managed logistics helped Walmart to
ensure that. Instead of being dependent on outsourcing companies to handle transportation
and logistics efficiently, Walmart did it on its own with more than 3,000 long-haul trucks and
Logistics & Warehousing Management
12,000 trailers. They can move commodities at their own planning and operational needs.
Walmart has been able to get supplies from all around the world thanks to its very
Logistics
sophisticated logistics At Walmart
infrastructure. Case
It has aided StudyinDiscussion
Walmart keeping operational expenses
low and delivering on its promise of low-cost final items. Walmart's highly delighted
consumers are largely due to its highly efficient logistics.

By Group 1:
2. What is the importance of logistics in achieving customer satisfaction?
Ans. Logistics refers to the mechanism that ensures product deliveryRishabh acrossJain
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supply
chain. Transportation, packing, storage and handling procedures, and information flow are
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all included. It is impossible to overestimate the importance of logistics in a company's
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capacity to serve its clients. The issue is to deliver time and location utility at aSuraj 21DM227
reasonable
price. If a company achieves this goal, it will acquire a substantial competitive advantage
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the marketplace and will be able to maintain high customer satisfaction levels. Consumer
satisfaction is critical for organisations seeking a competitive advantage because they

recognize that if they fail to meet customer expectations, competitors whose actions are
more focused on customer expectations will take their position.
Customers are served by logistics activities of an organisation by meeting time and location-
related market difficulties, as well as by the cost and quality of the service supplied, taking
into account the customers' wants and purchasing power. Customer satisfaction is
significant since it gives a statistic for marketers and business owners to utilize, manage and
improve their businesses. Consumer happiness can also be used to determine a company's
or a product's long-term viability by gauging customer loyalty. If clients are happy and
satisfied, sales will continue to flow, which implies the business will continue to operate.

3. What is the reason behind the price war among retail organizations?
Ans. A pricing war happens when two or more competing enterprises cut the prices of
similar goods or services in order to attract customers and market share. In the retail
industry, price wars are prevalent, as is fierce competition and a wide range of related
products. In a brief, a pricing war occurs when one company lowers its price, other
businesses follow suit, and rounds (often several) of price reductions occur.
Reasons behind price war among retail organisations:
● Increase revenue
● Take customers from competitors
● Gain market share

4. Where does Walmart procure its materials from?

Ans. Walmart obtains material from a variety of international sources, many of which are
reasonably priced. Agricultural items are shipped from India, China, and Brazil. Managing a
worldwide logistics network is a complex undertaking. It includes managing, monitoring
and controlling thousands of suppliers from all over the world, as well as logistics networks,
warehouses, storage facilities, and transportation systems.

5. How is Walmart so efficient in its logistic function?

Ans. The core of Walmart's efficiency is its logistics strategy and supply network which has
highly automated distribution centers. These are operational round the clock and are
supported by Walmart's own truck and trailers fleet. The company enjoys full control over
the movement of goods and supplies since it owns the transportation infrastructure. When
the company enters a new geographic market, it first assesses whether the area has enough
retailers to support a distribution center. Within a 250-mile radius, each distribution center
supports 75 to 100 retail outlets. After a shopping mall is constructed, stores are developed
around it to saturate the area, and the distribution network is reorganised to improve
efficiencies through a process known as reoptimization. As a result, there is a "trickle-down"
effect: trucks don't have to drive as far to deliver to retail outlets, transportation costs and
lead times are reduced, and shorter lead times mean holding less safety inventory. Because
retailers receive daily deliveries from distribution centers, replenishment may be done more
rapidly if shortages occur.