Executive Briefings

The IT Component of Wal-Mart's Plan to Take Greater Control of Its Transportation

Supply chains don't get a lot of love from IT. They're not sexy; no customer-facing payment systems or kiosks to love, just pallets, diesel and rubber. But Wal-Mart is about to change that. Retail's $405bn gorilla is taking over the trucks that deliver products from thousands of its suppliers. That may not sound like it has much to do with IT, but boy, does it ever. True to its contrarian roots, Wal-Mart is turning just-in-time inventory inside-out - and taking back its supply chain.

Officially, Wal-Mart hasn't said anything about IT's role in the trucking plan, which is spearheaded by Transportation Vice President Kelly Abney. He says it's all about squeezing out costs by keeping Wal-Mart's own trucks busy and by accepting delivery of merchandise at the supplier's loading dock instead of at a Wal-Mart distribution center. Wal-Mart figures it can cut wholesale prices by 6 percent if it hauls the merchandise itself. The company is also positioning the change as a benefit for suppliers, who can "focus on what they do best, manufacturing products for us," Abney told Bloomberg news.

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Supply chains don't get a lot of love from IT. They're not sexy; no customer-facing payment systems or kiosks to love, just pallets, diesel and rubber. But Wal-Mart is about to change that. Retail's $405bn gorilla is taking over the trucks that deliver products from thousands of its suppliers. That may not sound like it has much to do with IT, but boy, does it ever. True to its contrarian roots, Wal-Mart is turning just-in-time inventory inside-out - and taking back its supply chain.

Officially, Wal-Mart hasn't said anything about IT's role in the trucking plan, which is spearheaded by Transportation Vice President Kelly Abney. He says it's all about squeezing out costs by keeping Wal-Mart's own trucks busy and by accepting delivery of merchandise at the supplier's loading dock instead of at a Wal-Mart distribution center. Wal-Mart figures it can cut wholesale prices by 6 percent if it hauls the merchandise itself. The company is also positioning the change as a benefit for suppliers, who can "focus on what they do best, manufacturing products for us," Abney told Bloomberg news.

Read Full Article