Walmart Logistics Failure
The recent news out of Bentonville is a little disconcerting as are very good at what they do and now there are indications of a Walmart logistics failure. There is little doubt for anyone that is involved or has been in the logistics field how Walmart leveraged their advantage to deliver and grow to scales at historic levels.
I have not personally seen these empty shelves at any of the Walmarts that I have been in except for the ammunition section and the one closet to my house, which is a separate subject, so I can not speak to the accuracy. I was never a big fan of the store and always tried to sneak in and out through the garden section, but I learned to admire what they have done from my time in Northwest Arkansas.
There stores run much more efficient and you can see the vision of Mr. Sam Walton when you visit one of their stores near the home office. Mr. Walton was such a treasure and I am sure that they miss that. There are still a lot of brilliant people in charge and they are still very demanding. I could not help to think that perhaps there was something else.
I was reminded of the article I posted about what if the trucks stop rolling. There is huge risk that a JIT inventory presents to a company, but also a local society. If something happens and delays the transit of goods you can have widespread outages and in some cases panic. The current ammunition shortage exemplifies that.
The big question is exactly what is going on at Walmart? There is no doubt that they have inventory challenges, but a full scale Walmart logistics failure would be troubling. They built there business on the efficiency and rewards of their logistics and I find it hard to believe that there is more to the story.
Things have come a long way since Mr. Walton’s first store and times have changed. I think we may be seeing the downfall of the JIT system to some extent. That was built on the tenets of transportation availability and cheap fuel. Both of those have been pressured. The buyers will have to forecast better and the DC’s may actually carry a little more inventory to ensure empty shelved are reduced. That will drastically improve their bottom line.
The reality is that things will have to change or the reasons to be prepared increases exponentially. What in the world would we do without a cheap trinket from China to purchase.