Walmart is, with nearly $611.298 billion in fiscal year 2023, the biggest grocery chain in the United States. With over 10.400 stores worldwide, including 5.300 in the U.S. alone, Walmart has built a complex system to satisfy the needs of their customers. Their efficient and innovative supply chain has revolutionized the retail industry. Accordingly, it is not surprising that the supply chain is one of the key factors behind its ability to offer low prices daily and discount promotions. But how does Walmart manage to cope with high customer demand every day?
Table 1: Walmart worldwide from fiscal year 2012 to 2024 (Source: Statista)
Global sourcing, in-store warehousing and cross-docking 
Like many other companies, Walmart sources its products from various suppliers around the world. However, its supply chain spans across numerous suppliers, which is why the prices of their products can be offered at low conditions. In addition, Walmart offers a wide product portfolio. The company sells a variety of goods in more than 18 categories. A store allows you to buy everything from groceries to larger technical devices.
This wide product portfolio also requires a certain amount of warehouse space. That is the reason why many Walmart stores are designed with upper-level storage areas to hold extra inventory. This in-store warehousing reduces the need for frequent deliveries, keeping costs low and shelves full. Of course, Walmart has a large network of distribution centers in addition to the in-store warehouses. They are the backbone of regional logistics processes, but also used for storage and packaging for online orders.
Moreover, with the help of new delivery methods, Walmart is also able to use the resources available to distribute its products in a cost-effective and time-efficient manner. With its early adoption of cross-docking techniques, a method that eliminates the need for warehousing by transferring goods directly from inbound to outbound shipments, Walmart has significantly accelerated its supply chain. The cross-docking technique involves that suppliers are delivering their already commissioned products to a distribution center, where they. are then loaded onto trucks that are waiting (see figure below). The store receives the individually compliant order from these trucks after that. This reduces unloading and loading times, ensuring that products reach shelves faster. Coupled with its centralized distribution centers, which automatically distribute goods to stores, Walmart can streamline operations and minimize costs.
Figure 1: Cross-docking (Source: waredock)
Technology and Automation
Technology plays an important role in Walmart’s supply chain efficiency. The company has been an early adopter of new technologies, including artificial intelligence (AI), radio frequency identification (RFID), and autonomous robots. RFID technology enables faster restocking by tracking inventory with precision. Since implementing RFID, Walmart has reduced stockouts by 16% and accelerated restocking by three times.
Walmart integrates AI and the Internet of Things (IoT) to predict demand and manage stock levels. These technologies give the company the ability to adjust quickly to shifts in consumer preferences, ensuring that products are always available. Walmart also uses real-time data analysis to rebalance shipment across regions, maintaining efficiency and reducing delays. With the goal of automating 55% of fulfillment volume by 2026, Walmart is pushing the boundaries of supply chain innovation.
Walmart’s investment in automation is substantial, with the company spending $14 billion in 2021 alone on supply chain automation. This investment includes automated warehouse management systems, picking robots, and sorting technology, all of which help improve efficiency. Walmart’s use of high-speed robots for palletizing and sorting has further optimized its distribution processes, allowing for faster fulfillment and reducing errors. Walmart uses different sorts of robots to improve their supply chain. Robots like the autonomous robot “Alphabot” help Walmart pick up items for online orders. This marks a shift toward automated fulfillment centers, where robotics and AI collaborate to handle large volumes of orders with minimal human intervention. In addition, Walmart is retrofitting older distribution centers with cutting-edge technology, doubling their storage capacity and processing capabilities. New distribution centers, like the one in Lancaster Dallas, are built to manage twice the number of orders compared to traditional centers.
Walmart has also streamlined its relationship with suppliers by implementing vendor-managed inventory (VMI) systems. Through the in-house Retail Link system, Walmart provides real-time sales and inventory data to suppliers, allowing them to manage and replenish their own stock levels in Walmart’s stores. This reduces overstocking, cuts costs, and ensures that products are always available to customers.
Workforce Management as third largest employer in the world
But Walmart also relies on other systems to manage its 2.1 million employees worldwide—1 out of 160 Americans. Walmart gives its employees the option to work in five distinct business areas. The sectors include retail and clubs, corporate, healthcare, technology, and distribution, fulfillment, and drivers. The employees using Apps like Me@Walmart. Walmart’s proprietary application app offers its staff members a variety of tools to make their jobs easier. Workers can view shifts up to two weeks in advance by using the app on the smartphones the company provides. Other beneficial features include Mobile Clock In and push to talk, which allows for instantaneous employee communication, and the option to clock in using a mobile device. Walmart is working to streamline its internal procedures and improve employee collaboration.
Figure 2: One of Walmart’s distribution centers (Source: Fulcrum Construction)
Conclusion
We can see that Walmart’s supply chain is characterized by modern logistics, combining technology, automation, and global sourcing to deliver everyday low prices on a massive scale. With continued investment in innovation, Walmart is setting the standards for what a future-ready supply chain can look like in the retail industry.
