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Walmart Is Addressing Inventory Problems With a New System


Supermarket checkout counter. How Walmart’s My Productivity app controls inventory  Even giants can be brought down to their knees, as proven in Walmart’s mammoth fall in 2013 when $3 billion went down the drain, thanks to years of excess goods surging past sales. In the quarter ending on April 30 earlier this year, Walmart announced lower earnings.

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The cause? Aside from its fiscally damaging inventory excess and messy storage spaces, Walmart also had no real, effective inventory software in place to keep goods at an optimal level. As a result, thousands of hours were wasted by managers in the backrooms to track and find products annually. It’s easy to imagine how before long, this messy inventory system leads to frustrated customers who can’t find specific goods, wasted paid time spent by the associates trying to track them down and ultimately, a damaged reputation and lost revenue for the company.

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Something needed to change. In June, Walmart Labs created and launched a My Productivity app, which offers every member of the company’s management team access to real-time data from their smartphones. Discount Store “Gone are the days of a manager having to disappear from the sales floor for huge blocks of time,” Mark Ibbotson, EVP of central operations for Walmart US, writes on the company’s blog. “No more logging into a separate system to gain access to sales, replenishment, warehouse or other data needed to keep the business running efficiently.” [Tweet "Gone are the days of a manager having to disappear from the sales floor for huge blocks of time."] The app allows managers to restock items, access sales, answer customer questions, review feedback from customer receipt surveys as they’re submitted, all while never leaving their location. Additionally, Walmart has upgraded its real-time supplier data through its SPARC (Supplier Portal Allowing Retail Coverage) app, meaning suppliers now have overviews to exactly what’s on Walmart’s shelves at all times. This further warrants optimal in-stock levels and eliminates costly inventory excess.
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Hopefully, Walmart’s new system will be a better way to manage inventory compared to its earlier attempts, like in 2003 when the company became an early adopter of the Radio Frequency Identification (RFID) technology. The rest of Walmart’s suppliers were expected to adopt RFID into their own supply chain by 2006, but the system was abandoned in early 2009. The reason was that the system solved no detectable problem, but most supply chain catastrophes aren’t always so discerning. That’s the whole point of implementing preventable systems, to prepare for blind spots in hopes that these slight errors that could potentially bring the entire business down never happen. Walmart’s My Productivity app aims at giving managers a clearer, broader overview of various streams that affect the business. If managers can do all of this without having to leave the sales floor, then the idea is that the customer’s shopping experience will be redefined for the better. The bottom line: If a business the size of Walmart can receive this kind of financial blow from a lack of inventory control, imagine the kind of damage this would do to small and medium businesses where there’s usually more to be done with less staff. Without an effective inventory management system, an already tight budget can get strained in a blink if employees are wasting hours looking for goods—or if you let inventory exceed sales at any time. Don’t wait until cash you can’t afford go down the drain. Instead, think ahead about advanced solutions and inventory softwares to track, monitor, and access your inventory across shelves, stores, warehouses and websites, leading to high growth and profit.