Would Wal-Mart Do Away With Inventory?
from the strategies...-strategies... dept
While most of this NY Times article on Wal-Mart focuses on what Wal-Mart does with your data (which goes well beyond what others do) the more interesting element may be what Wal-Mart does with all that data. Beyond just the expected data mining for better product selection (the example given says Wal-Mart discovered that approaching hurricanes in Florida drive sales of PopTarts and beer), it looks like Wal-Mart may go even further in leveraging the technology to improve their bottom line. There is the speculation that Wal-Mart may use their data tracking to do away with inventory on their books. What would happen is that suppliers would technically "own" the product until it was bought -- basically making Wal-Mart something like the largest consignment store in the world. Vendors may not be thrilled, but Wal-Mart still holds so much clout that suppliers will be swept along. While it would wipe a lot of inventory off the books for Wal-Mart, it would do exactly the opposite for their suppliers. Of course, what happens when you take this even further, and suppliers refuse to take inventory of products from their own suppliers, and you have virtual suppliers upon virtual suppliers? To some extent, it's all a mirage, since it's just a question of how the accounting falls out, and the actual practice of producing, distributing and selling the goods remains the same.