Introduction
This report aims to analyze Walmart’s challenges in efficiently moving products through logistics and describe how the COVID-19 outbreak has impacted the company’s logistics approach. An analysis of the organization’s larger network of resources, including the use of Hub and Spoke networks, is required. The report is divided into four sections: the first section examines the role of logistics in modern contexts, followed by an analysis of Walmart’s logistics, a discussion of the impact of COVID-19, and a conclusion.
The Role of Logistics in Contemporary Contexts
Logistics is crucial to business in facilitating the efficient movement of resources throughout an organization. Increased globalization has made logistics management more crucial in modern contexts (Esmaeilian et al., 2020). Industry studies have shown that organizations have had to invest more heavily in effective logistical operations to meet changing customer demands for faster product delivery (Zdaolu & Bahar, 2022). According to research, organizations should establish a hub-and-spoke network of resources to reduce expenses and delivery times (Zdaolu & Bahar, 2022). Their logistical operations will be more effective as a result.
Logistics at Walmart
Walmart places a strong emphasis on logistical operations within its organizational structure. To efficiently source and distribute its products across sixty countries, the company has recognized the need to maintain agility in its logistics (Hong & Najmi, 2020). Walmart employed a variety of operational tactics to accomplish this.
In the US, Walmart adopted a hub-and-spoke system, sourcing goods from various vendors and distributing them to retailers via a network of local distribution hubs (Jin et al., 2019). The US-based strategy was put to the test in other markets, including the UK, where a hub-and-spoke system was implemented, along with a reliance on distribution centers (Piecyk & Allen, 2023). A more structured approach, such as aligning IT systems, was added to this investment in logistical operations, enabling it to enhance the accuracy and effectiveness of its global supply chain.
The Impact of COVID-19
The COVID-19 pandemic has had numerous effects on society, including those related to logistics and supply chain management. The impact of the pandemic on supply chains has created a unique challenge for organizations regarding the movement of resources. Walmart has responded to this challenge by expanding its network of regional distribution centers and improving its online delivery services (Liang, 2022). In terms of the former, Mancuso et al. (2023) report on 12 new fulfillment centers augmented by AI and robotics that Walmart established in the US. Regarding the latter, Walmart installed Aphabot software to increase the speed of goods packaging (Liang, 2022).
It has rapidly increased its workforce and made technological advancements to increase delivery capacity (Liang, 2022). Similarly, the company has attempted to improve the efficiency of its Hub and Spoke system by relocating resources and operations to more cost-effective locations, such as Mexico, Chile, and China (Mancuso et al., 2023). Overall, the pandemic has proven to be a significant motivator for the company.
Conclusion
This report critically evaluates the problems with Walmart’s efficient logistics of goods. It has examined the organization’s broader resource network, including the use of hub-and-spoke systems. It has been discussed how logistics functions in modern settings and the logistical strategies Walmart used before the COVID-19 outbreak. Additionally, the company’s efforts to expand its delivery services and enhance the effectiveness of its hub-and-spoke network have been detailed, along with the impact of the pandemic on its logistical operations. Overall, the report has shed light on the significance of logistics in enabling Walmart to maintain its competitiveness and effectively serve customers even in times of flux.
References
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Hong, S.-J., & Najmi, H. (2020). The relationships between supply chain capability and shareholder value using financial performance indicators. Sustainability, 12(8), 3130. Web.
Jin, B. E., Cedrola, E., & Kim, N. (2019). Process innovation: Hidden secret to success and efficiency. Palgrave Studies in Practice: Global Fashion Brand Management, 1–23. Web.
Liang, H. (2022). Sharing Economy under COVID-19: Evidence from the United States. Atlantis Press. Web.
Mancuso, I., Petruzzelli, A. M., & Panniello, U. (2023). Innovating agri-food business models after the Covid-19 pandemic: The impact of digital technologies on the value creation and value capture mechanisms. Technological Forecasting and Social Change, 190. Web.
Piecyk, M., & Allen, J. (2023). Title Warehousing in the UK: Operations, Planning and Decarbonisation (Briefing Report). Web.