Post by: King Siu, Communications Coordinator, PMAC

Jeff Kelly, General Manager – Western Region at Supply Chain Management Inc., explains that in the past supply chain strategies often focused on filling a warehouse rather than a store. This strategy often sacrificed the needs of the store for the sake of logistical requirements at the distribution centre.

Recognizing this problem, Wal-Mart worked to establish a system that was designed to fulfill the requirements of its stores. Purchase orders are now generated based on total store repleshment requirements. The need for a traditional distribution centre was eliminated and the required inventory was now held in the distribution network. This model was based on a method that was used in Wal-Mart’s UK operations to create a stockless environment. The main differences in the Canadian model are the scale and distance to stores, both of which are smaller because of our population base and our ready access to many vendors south of the border.

The new system has resulted in:

• Cleaner, more organized facilities
• Reduced labour costs
• Improved efficiencies
• Reduced receipt-inventory-cash cycles
• Reduce/delay the need for further brick and mortar assets for years
• Reduce inventory control costs
• Flexibility in changing product lines

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