Monday, December 13, 2010

Midnight Shopping and Supply Chain Management

I heard a very interesting story on NPR several weeks ago.  Wal-Mart noticed a spike in sales on the first day (perhaps even the first hour) of the month and this story attributes at least some of that demand to government aid funds not being available until just after midnight on the first of the month.  Wal-Mart even changed their stocking patterns to accommodate the demand for larger packs of items earlier in the month.

Leaving aside the politics of this issue and viewing it as strictly a supply chain issue I thought about the bullwhip effect this has on the supply chain.

It's also interesting to note that Wal-Mart has taken strong actions to level demand (through their "every day low prices" for one) to capture the resulting supply chain savings that this yields.  Here the timing of the government aid distribution is counteracting their efforts and even making Wal-Mart change their stocking patterns.

Perhaps distributing these funds weekly rather than monthly would aid everyone involved - recipients would be able to hold less inventory (anyone with kids would understand the advantage of this - kids frequently 'burn out" on certain foods), Wal-Mart would have a more level demand pattern and resulting lower inventory, etc.

Let me know of other examples where government action (or inaction) is negatively impacting the effectiveness of an organization's supply chain.  

No comments:

Post a Comment