Case Study on excellence in Supply Chain Management

Founded by Sam Walton in 1962. Headquartered in Bentonville, Arkansas, US. Largest grocery retailer in the world. Bigger Private Employeer in the world 10130 stores in 21 countries More than 100,000 Suppliers.

Walmart - United States Walmex Mexico Asda United Kingdom Seiju Japan Best Price - India

Creating Jobs
2.2M 443 B 1.4M

201 B 43 B
0.25M

2.4B

371K

Earnings
1962 $ 30,000 2012 $ 15.8 Billion

25

No of Associates

RFID in Retail How do costs get add upSupply Chain in a supply chain?? Raw material Inventory Selling costs, Admin and overheads WIP FG Inventory Inventory Handling / Carrying Costs Store Inventory carrying costs Pilferage Logistics Admin and Overheads

Logistics

Working Capital needs to be effectively managed to keep financial costs down.

Stores in Smaller towns Profit Sharing with Staff Partnership with Suppliers

EVERYDAY LOW PRICE

Leverage through IT Obsessive focus on Cost Innovative Supply Chain Practices

Just In Time
Hub and Spoke Cross Docking Own Fleet RFID / Own Satellite Network

Saturation Strategy

Treat Suppliers as Partners

CPFR Program Not dependant on single supplier Electronic Data Interchange Vendor Financed Inventory

Tough Negotiator

Each Store as Investment Centre Store within a Store Pilferage Incentive to Associates 10 Feet Attitude & People Greeter Profit Sharing with Employees Open Door Policy

Wal-Mart 20.18 Five Year Return on Equity (%) 18.58 Five Year Sales Growth (%) 22.63 Five Year net income growth (%)

2008-2012 Costco Target Sears 12.35 17.71 -4.35 36.78 10.26 -18.01 33.59 2.81 -476.51 2012 Data 69.87 72.2% 27.8% 20.2% 6.4% 4.2% 6.5 19%

Amazon 16.02 223 32.56

Sales ($B) As a percentage of Sales Cost of Goods Gross Margin Selling and Administration Operating Income Net Income Inventory Turnover Return on Equity (%)

443.85 75.5% 24.5% 19.2% 5.5% 3.6% 8.7 20.7%

99.14 87.6% 12.4% 9.6% 2.8% 1.7% 12.4 13.7%

41.57 76% 24% 25% -2% -7% 3.64 -4%

48.08 80.0% 20.0% 18.2% 1.9% 1.3% 9.38 8.1%

People think we got big by putting big stores in small towns. Really, we go big by replacing inventory with information Sam Walton,
Founder of Wal-Mart