Supply Chain Management.
In order to achieve this goal, the company used a logistics technique called cross docking. Using cross docking, products are routed from suppliers to Walmart's warehouses, where they are then shipped to stores without sitting for long periods of time in inventory (University of San Francisco). This strategy allows Walmart to reduce significantly cost and offer to customer high competitive prices. Then, Walmart focused on developing a more structured and advanced supply chain management strategy to exploit and enhance this competitive advantage.
Components of Supply Chain Management: the main elements of supply chain are purchasing, operations, distribution, and integration. Purchasing managers are typically responsible for determining which products their company will sell, sourcing product suppliers and vendors, and procuring products from vendors at prices and terms that meets profitability goals. Supply chain operations focus on demand planning, forecasting, and inventory management. Moving the product from warehouses or manufacturing plants to stores and ultimately to customers is the distribution function of the supply chain.
Supply chain integration refers to the practice of developing a collaborate workflow among all departments and components involved in the supply chain to maximize efficiencies and build a lean supply chain. Walmart over the time have become able to obtain a market leadership position due to its relationship and integration with their suppliers, manufacturing, warehousing, and distribution to stores. Their supply chain strategy has four key components: vendor partnerships, cross docking and distribution management, technology, and integration. Walmart uses technological infrastructures such as information technology and state-of-the art communication system in order to keep up-to-date and efficient processes in the logistic operation.