Optimizing Walmart’s Supply Chain from Strategy to Execution
Abstract
Walmart takes a holistic approach to its supply chain, which integrates strategic and operational decisions consisting of three components: (1) network planning and transformation, which recommends the long-term network with step-by-step recommendations on how to achieve the end state; (2) a routing and loading system (Load Planner), which determines how to efficiently move products across the network; and (3) a simulation platform, which combines strategic and executional decision engines to enable a holistic decision-making process. Walmart built a set of scalable and fast optimization decision engines and deployed them using underlying innovative algorithms and models. The company fully adopted this next-generation optimization capability throughout its entire grocery supply chain in the United States, and approved optimization model-based network design and transformation plans for long-term investments involving billions of dollars. As a result of this efficient routing and loading executional system, Walmart prevented 98.6 million pounds of CO2 emissions and saved $91.5 million by eliminating 108,000 truck routes covering 33 million miles in fiscal year 2023 (FY23). Moreover, this optimization-empowered decision framework is evolving and transforming Walmart’s supply chain while keeping its Every-Day-Low-Price (EDLP) promise to its customers.
