It was noted above that some very large companies can be bigger than some small

Question

It was noted above that some very large companies can be bigger than some small countries (for example in terms of company revenue when compared to country GDP). How such large companies arrange their logistics activities is thus highly relevant for various stakeholders.

Take a large company with which you are familiar and attempt to evaluate its logistics activities. Examining company annual reports, company websites, and other information sources should generate information of interest. Detailed investigation may highlight specific issues of interest from a logistics perspective: for example, it is not uncommon for some sea ports to be highly dependent on individual large manufacturers in their hinterland. Try to identify linkages such as these and their implications. For example, what would happen to such a port if the manufacturer decided to relocate production to another factory in its global network?

Explanation / Answer

Walmart is the company which I choose to evaluate the case.

Introduction:

Walmart is the world’s largest retailer with annual turnover of $500 billion. Walmart supply chain is considered as most innovative and highly competitive compared to competitors. It is estimated that Walmart spends mere 1.6% of cost of goods as logistics expenses which is much lesser than its competitors who spend 3.5% of cost of goods as logistics expenses. This makes goods sold in Walmart cheaper than its competitors.

It is estimated that 91% of goods sold in Walmart are imported from china. Hence Walmart needs robust logistics.

Innovations in logistics:

Walmart uses innovative ways in logistics to keep logistics cost low. Few of them are listed below

While going through Walmart logistics technique, one thing is clear. China is excessively dependent on Walmart. Around 90% of goods sold in Walmart are imported from china. Which means any trade tension with USA has potential to hit $450 billion trade between Walmart & China. Say tomorrow Walmart decides to import goods from other emerging countries like India, Indonesia and Malaysia, china would be in trouble.

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