Inside the Vendor Management System of Walmart

Walmart is one of the world's largest retail giants, known for its low prices, a wide range of products, and massive supply chain network. Its sophisticated Vendor Management System is ...
Published on
March 15, 2023
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Walmart is one of the world's largest retail giants, known for its low prices, a wide range of products, and massive supply chain network. Its sophisticated Vendor Management System is a critical element in Walmart's success. In this case study, we’ll dive deep into the inner workings of Walmart's VMS and explore how it fosters strong relationships with its vendors while ensuring seamless operations and customer satisfaction.

Walmart Supply Chain Automation Spend
Walmart Revenue Chart

Walmart's Vendor Management System

Importance of VMS

The VMS is crucial for Walmart to maintain control over its vast network of suppliers and products. It streamlines the procurement process, from onboarding new vendors to managing orders, inventory, compliance, and performance. The system allows Walmart to efficiently coordinate with thousands of vendors, ensuring a steady flow of products to its stores.

Benefits for vendors and Walmart

Vendors benefit from Walmart's VMS as it provides a structured framework for doing business with the retail giant, offering clear expectations and support. Walmart, in turn, benefits from increased efficiency, cost savings, and improved relationships with its suppliers, ultimately leading to a better shopping experience for its customers.

The Onboarding Process

Application and approval

Vendors interested in working with Walmart must apply through its online portal. Walmart then reviews the application, considering product quality, pricing, and the vendor's capacity to meet demand. If approved, the vendor proceeds to the next steps in the onboarding process.

Vendor number assignment

Once approved, the vendor receives a unique vendor number. This identifier is used throughout the VMS to track and manage all transactions, communications, and performance metrics related to the vendor.

Product Submission and Approval

New Item Setup (NIS)

Vendors must submit detailed product information through Walmart's New Item Setup (NIS) system. The data includes product descriptions, images, dimensions, weights, and other relevant specifications. Walmart's team then reviews the information to ensure accuracy and compliance with its standards and policies.

Cost and Pricing

Walmart negotiates product pricing with its vendors to ensure the best value for its customers. Factors such as product quality, market trends, and the vendor's cost structure come into play during these negotiations. Once both parties agree on the pricing, the product is ready to be listed and sold in Walmart's stores or online platforms.

Purchase Order Management


Walmart uses Electronic Data Interchange (EDI) to communicate and exchange essential documents like purchase orders, invoices, and shipping notifications with its vendors. Vendors send advance Shipping Notices (ASNs) to notify Walmart of incoming shipments, which helps Walmart manage its warehouse operations and plan inventory distribution more effectively.

Invoice submission

Vendors submit invoices electronically via EDI, ensuring accurate and timely payments. Walmart's VMS allows vendors to monitor the status of their invoices and payments, providing transparency and facilitating communication between the parties.

Inventory Management

Walmart's inventory model

Walmart follows a Just-In-Time (JIT) inventory model, which minimises stock levels while ensuring products are available when customers need them. Vendors play a crucial role in this process, as they must maintain tight control over their production and delivery schedules to meet Walmart's demand.

Collaborative forecasting and replenishment

Walmart and its vendors work closely on forecasting and replenishment, using data-driven insights to predict customer demand and optimise inventory levels. The VMS supports this collaboration by providing vendors access to relevant sales and inventory data, enabling them to make informed decisions about production and shipping.

Compliance and Performance

On-Time In-Full (OTIF) requirements

Walmart's On-Time In-Full (OTIF) program sets strict vendor guidelines regarding timely and accurate deliveries. Vendors must meet these requirements to maintain goodwill with Walmart and avoid penalties. OTIF performance is monitored and tracked within the VMS, ensuring vendors clearly understand their responsibilities.

Scorecard and evaluation

Vendors receive regular scorecards that evaluate their performance against key metrics, such as OTIF compliance, product quality, and customer feedback. The VMS enables Walmart to identify areas for improvement and work with vendors to address issues, fostering a culture of continuous improvement and collaboration.

Technology and Integration

Retail Link

Retail Link is Walmart's proprietary data-sharing platform, which gives vendors access to a wealth of information, including sales data, inventory levels, and store-specific performance metrics. Vendors can use this information to optimise their operations, improve their product offerings, and better align with Walmart's strategies and objectives.

APIs and integrations

Walmart's VMS is built to integrate seamlessly with various software applications and systems through Application Programming Interfaces (APIs). This flexibility allows vendors to connect their existing systems with Walmart's platform, streamlining data exchange and communication.

Continuous Improvement and Support

Vendor training and resources

Walmart offers various training programs and resources to help vendors succeed within its VMS. From webinars and workshops to comprehensive guides and best practices, vendors can access a wealth of knowledge to improve their performance and grow their businesses.

Feedback and communication

Open communication and feedback are essential components of Walmart's VMS. Regular reviews, performance discussions, and issue resolution processes ensure that Walmart and its vendors maintain a strong working relationship focused on delivering the best possible experience for customers.


Walmart's Vendor Management System is a robust and sophisticated platform that streamlines the retailer's interactions with its vast network of suppliers. By leveraging advanced technology and fostering solid relationships, Walmart's VMS ensures efficiency, compliance, and collaboration throughout its supply chain. As a result, vendors and Walmart alike can reap the benefits of this system, ultimately providing customers with the high-quality products and services they expect from the retail giant. Caantin's Vendor Management System is designed to help restaurants and vendors replicate similar success stories, enabling them to build strong relationships, optimise operations, and achieve the same efficiency level as Walmart. By adopting these best practices, businesses in various industries can harness the power of vendor management systems to drive growth, profitability, and customer satisfaction.

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