Case Presentation
Walmart’s transportation network is quite effective at the moment. It is one of the factors determining the network’s success. Walmart’s supply chain is efficient and capable of responding quickly to emerging problems as they arise. However, there is always an opportunity to improvise and optimize the logistics planning process to increase productivity (Vipin, 2021). In the case of Walmart, possible cost savings without sacrificing performance include the deployment of remote-controlled trucks, which save drivers’ costs in the long term.
Evaluation
Constraints Within the Transportation Network
Constraints within the transportation network are its flows and bandwidth limitations. Despite the speed limit on expressways for safety reasons or to increase capacity, only a limited number of vehicles carrying goods to Walmart can still move on the roads (Johnson, 2015). This is reflected in the amount of time the network’s ground transport spends on the way.
Their Impact on Overall Supply Chain Operation
The influence of transportation network limits on overall supply chain operation is related to evaluating the priority of items to send via more urgent air delivery routes. For example, this happens if a customer chooses a fast delivery option and needs the goods urgently within a few days (Vipin, 2021). However, this type of delivery is more costly, increasing the cost of the overall supply chain operations.
Transportation Network Analysis
To rationally organize traffic flows, it is necessary to estimate the maximum flow in the network, find the most efficient flow distribution, and identify bottlenecks. According to statistics, the narrowest roads are 130 miles from the store, and sections are on toll roads (Cariou & Notteboom, 2022). This is because traffic on local roads can be difficult due to their poor quality and queues on toll roads. The remaining sections belong to a high-quality transportation network.
Modes of Transportation
Time
The most optimal modes of transportation are being used in terms of time. However, in the case of ground transportation, Walmart multiplies time for lower costs (Vipin, 2021).
Cost
In terms of cost, the most ideal modes of transportation are being applied. To do this, the network does not use the northwest corner method, which ignores the cost of transportation during deliveries, but the least cost method. When it is necessary to make the fastest deliveries, Walmart chooses air logistics (Cariou & Notteboom, 2022). However, costs are growing significantly at the same time, and although an additional payment from the client covers them, the cost item is still growing.
Quantity
The correct modes of transportation are being used based on quantity. Walmart must consider the indicators that characterize the performance of the rolling stock. To calculate quantity, the network uses the number of rides, the total distance of transportation and mileage with cargo, and the volume of transportation and transport work (Cariou & Notteboom, 2022). At the same time, the indicators characterizing the degree of use of the rolling stock of truck transport are taken into account to avoid increasing the cost for the sake of quantity in the future.
Recommendations
Given the identified constraints, it is possible to enter cars by remote control to improve the transportation network. For example, this will reduce costs by 20% since drivers will not need to pay for business trips on difficult road sections (Vipin, 2021).
Warehousing
Analyzing Warehousing Network
The Walmart warehouse network can be considered a micro logistics system, a structured economic system for managing material and related flows, the interrelated elements of which are competently managed. Walmart’s warehousing network is located on the territory of the main store. The warehouse has all the conditions necessary to store food products (Johnson, 2015). In addition, most of the updated Walmart centers include the addition of high-speed mobile bots and high-speed palletizing robotics, which significantly accelerated the work with the inventory.
Requirements & Recommendations
The requirements and recommendations for appropriately meeting current and future storage needs consist of regular, prompt changes influenced by strategic decisions and external and internal factors. These include changes in demand for the goods being sold, the emergence of new customers, and customer requirements for the level of service (Vipin, 2021). In addition, seasonal changes associated with a change in pricing policy or an increase in the service radius from one warehouse are recommended.
Evaluation
Current Warehousing Infrastructure
Walmart’s current warehousing infrastructure adequately meets storage needs. To calculate the required warehouse space, Walmart uses the maximum inventory indicator expressed in conventional two-axle wagons (Johnson, 2015). The network’s calculations are optimal for the assortment supplied to it.
Eventual Expansion Requirements
Walmart’s eventual expansion requirements may occur during seasonal sales. The need for goods increases during major holidays, such as Christmas, Thanksgiving, or Independence Day (Cariou & Notteboom, 2022). Therefore, a large warehouse area is necessary for this period. This seasonal need for expansion can be realized by renting unused premises in the absence of major holidays.
Constraints & Restrictions
The constraints or restrictions involved in the possible locations are that Walmart supplies food to its warehouses. Therefore, there should be no harmful industries nearby on the territory of possible locations (Johnson, 2015). In addition, to display products as soon as possible without losing their freshness and presentation, warehouses should be located in short proximity to the store itself; being too far from the nearest Walmart branch is not suitable.
Handling of Hazardous Materials
Since Walmart supplies food products, they do not need special handling since there are no hazardous materials. However, some products, such as meat, milk, and ice cream, require a special temperature regime (Vipin, 2021). Therefore, they are transported in cold storage rooms where freon gas is used (Vipin, 2021). It is explosive, so the cameras are regularly checked for leaks, and a special identification mark is glued to the carriers’ cars.
Impact of Hazardous Materials on Warehousing
The impact of Freon on warehousing for the current mix of products that Walmart’s SCM is handling is to be extra careful with the use of open fire. For example, to avoid fires, employees are prohibited from smoking in the vicinity of the warehouse (Cariou & Notteboom, 2022). Periodic verification of the service personnel’s knowledge of the rules, regulatory documents on the maintenance of the refrigeration system, and labor protection increases the costs of warehousing and the requirements for employees.
References
Cariou, P., & Notteboom, T. (2022). Implications of COVID-19 on the US container port distribution system: Import cargo routing by Walmart and Nike. International Journal of Logistics Research and Applications, 3(1), 1-17. Web.
Johnson, F. (2015). Walmart China — Supply chain transformation. Richard Ivey School of Business Foundation.
Vipin, J. (2021). An overview of Walmart, Amazon, and its supply chain. An International Multidisciplinary Research Journal, 11(12), 749-755. Web.