To extend its reach further back into the supply chain, Wal-Mart plans to use its private fleet and third-party logistics providers to pick up product directly from manufacturers. Currently, Wal-Mart’s fleet only moves goods from its DCs to stores.
The retailer says the plan will improve on-time delivery rates and trailer utilization and allow the company to negotiate better fuel prices. The ultimate aim is to reduce the cost of goods sold and improve margins.
Kelly Abney, Wal-Mart’s vice president of corporate transportation, says the company is working with more than 100 manufacturers, some of which have already shifted their transportation services to Wal-Mart.
Wal-Mart says the strategy is part of its “productivity loop”—a focus on supply chain efficiency that ultimately reduces retail prices to consumers.
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