Managing the Value Chain Navin Kumar 6010091005085 WALMARTS S !!L" C#A$N MANA%&M&NT !

RACT$C&S 1'( )a* Wal+Mart in 199' ,et u- a ./m-uter terminal net0/r1 t/ ,ta2ili3e a ./mmuni.ati/n lin1 2et0een it, ,t/re, an4 the ./m-an5 hea46uarter,( Thi, ena2le, the ,t/re, t/ ,en4 an4 re.eive me,,age, relating t/ all it, 2u,ine,, /-erati/n( C/mmuni.ati/n lin1, 2et0een Wal+Mart an4 it, ,u--lier 0ere ,ta2ili3e4 thr/ugh &7$ that ena2le4 the ./m-an5 t/ -la.e /r4er, ele.tr/ni.all5 t/ the ,u--lier,( &7$ n/t /nl5 re4u.e the /r4er /8 -r/.e,,ing time 2ut al,/ ena2le, the 4i,tri2uti/n .enter,( $n 19'8 Wal+Mart ,et u- it, 8ull5 aut/mate4 4i,tri2uti/n .enter, t/ 4i,-at.h /8 g//4, t/ the ,t/re, 0ith thi, hel- Wal+Mart ha4 minimum ./,t han4ling( Wal+Mart mail the u,e /8 l/gi,ti., te.hni6ue, .alle4 .r/,, 4/.1ing t/ re.eive the g//4, an4 4i,-at.h 6ui.1l5 &le.tr/ni. 4ata inter.hange 8/r ,ta2ili3ing 4ire.t lin1, 0ith the ,t/re, an4 in,tallati/n /8 ,atellite ./mmuni.ati/n ,5,tem t/ ./ /r4inate all the a.tivitie, /8 it, ,u--l5 .hain( Wal+Mart in,talle4 the -/int /8 ,ale ,.anning ,5,tem in95 Wal+Mart ,t/re,( niver,al -r/4u.t ./4e ,.anner, 0ere in,talle4 0hi.h 0/ul4 rea4 the 2ar./4e, /8 the -r/4u.t, 2eing ,/l4 at the ,t/re,( The 2ar ./4e ,5,tem 0a, e:-an4e4 all a.r/,, the S( $n 198;< it al,/ intr/4u.e, ele.tr/ni. -ur.ha,e /r4er management ,5,tem( $t al,/ in,talle4 a ,atellite ./mmuni.ati/n ,5,tem 2elieve4 t/ 2e the large,t -rivatel5 manage4 ,5,tem in the S( Thi, ,5,tem ,ta2ili3e virtual ./mmuni.ati/n lin1, 2et0een all the 0al mart ,t/re, an4 4i,tri2uti/n .enter, 0ith the ./m-an5 hea46uarter,< thr/ugh a t0/ 0a5 v/i.e an4 4ata an4 /ne 0a5 vi4e/ ./mmuni.ati/n( The ./m-anie, e88/rt at ,trengthening it, SCM ,5,tem, inv/lve4 a4van.e4 $T t//l, -r/ve4 t/ 2e highl5 2ene8i.ial( Wal+Mart em-l/5e4 the m/,t a4van.e4 $T t//l a--li.ati/n in ,u--l5 .hain 8un.ti/n, ,tarting 8r/m 4eman4, 8/re.a,ting< -r/.urement< l/gi,ti., 4i,tri2uti/n an4 invent/r5 management( The real 8/.u, i, /n re4u.ing the t/tal ,u--l5 .hain ./,t( The &7$ ,ave4 time an4 ma4e Wal+Mart, -r/.urement -r/.e,, m/re e88i.ient (A huge am/unt /8 /r4er 0a, -la.e4 8/r the g//4, 0ith it, ,u--lier,( Wal+Mart ./ul4 neg/tiate the 2e,t -ri.e, 8/r g//4, 0ith it, ,u--lier, 25 -la.ing a 2ul1 /r4er the 2ar./4e ,.anner -la.e4 at the .he.1/ut ./unter, in ea.h ,t/re, ,.an, an4 -r/.e,, the 2ar./4e, /n ea.h -r/4u.t m/ving /ut /8 the ,t/re,( #i, in8/rmati/n in.lu4ing the t5-e /8 the -r/4u.t< it, manu8a.turer< an4 it, -ri.e, 0a, re./r4e4 /n the ./m-uter ,5,tem at the ,t/re,( The in8/rmati/n 0a, -a,,e4 /n t/ the .entrali3e4 4ata 0areh/u,e at the ./m-anie, hea46uarter, 0ith the hel- /8 ,atellite lin1,( The ./m-uter ,5,tem /8 Wal+Mart 0a, ./nne.te4 t/ th/,e /8 it, ,u--lier, A 2/ut the vari/u, -r/4u.t the ,u--lier, re6uire, g//4 t/ the Wal+Mart 4i,tri2uti/n .enter( Wal+Mart ha4 gaine4 ,u88i.ient e:-erti,e in 0areh/u,ing an4 l/gi,ti. management it, 8ull5 aut/mate4 4i,tri2uti/n .enter, an4 it, /n 4e4i.ate4 tru.1, hel-e4 Wal+Mart ,hi8t invent/rie, a, mu.h l/0er ./,t ./m-are t/ it, ./m-etit/r,( The ./m-an5 ./ul4 re-leni,h ,t/.1, at an5 time 0ithin 9=hr,( $n S( $t ena2le, t//l, an4 te.hni6ue, t/ 8urther enhan.e it, 0areh/u,e an4 l/gi,ti. management .a-a2ilitie,( WALMART &M!L>"&7 a4van.e4 l/gi,ti. te.hni6ue, 1n/0n a, .r/,, 4/.1ing( Thi, ena2le4 the ./m-an5 t/ re.eive g//4, an4 4i,-at.h them t/ the .u,t/mer, a, ,//n a, -/,,i2le(( Wal+Mart ha4 ;5000 em-l/5ee, -er8/rming l/gi,ti. 8un.ti/n( Wal+Mart al,/ in,talle4 a v/i.e 2a,e /r4er 8illing ,5,tem in all gr/.er5 an4 4i,tri2uti/n .enter,( Wal+Mart 0areh/u,e an4 l/gi,ti. management ,5,tem 0a, remar1e4 25 an anal5,t( ?The5 have ver5 -r/8i.ient 0/r1 ,tati/n, in their 0areh/u,e( The5 have ever5thing /rgani3e4 the5 u,e4 a4van.e4 ,hi- n/ti.e, t/ ,.he4ule4 their 4eliverie,( $t i, an e:tremel5 0ell run ,tan4ar4 4i,tri2uti/n ,5,tem( The5 al,/ r/ute re-leni,hment ,t/.1 8/r their 2a,i. 2u,ine,,( $n 1990< Wal+Mart laun.he4 an a4van.e4 invent/r5 management ,5,tem .alle4 retail lin1( Retail Lin1 ./nne.te4 Wal+Mart, &7$ net0/r1e4 0ith an e:tra net a..e,,i2le t/ Wal+Mart th/u,an4 /8 ,u--lier,( $t -r/vi4e4 ,u--lier, 0ith ,ale, 4ata /8 their -r/4u.t 8/r -a,t 9= m/nth, -eri/4( An4 al,/ ma4e 4eman4 8/re.a,t 8/r their -r/4u.t 8/r the ne,t 19 m/nth -eri/4( Wal+Mart 0ith the hel- /8 retail lin1 ./ul4 4etermine 0ith a rea,/na2le a..ura.5 0hat g//4 t/ /r4er, in 0hat 6uantit5< an4 al,/ 4etermine the 6uantit5 /8 g//4, t/ 2e 4i,-at.he4 t/ vari/u, ,t/re,( The ,u--lier, 0ere a2le t/ -lan /ut their 4eliver5 ,.he4ule /n the in8/rmati/n re.eive4 a2/ut the -r/4u.t, t/ 2e re-leni,he4 at vari/u, 4i,tri2uti/n .enter,( Wal mart i, /n t/ /8 the 2a,i. 2u,ine,, an4 ,/-hi,ti.ate4 0ith !>S 4ata(

)2* @5 the mi4 in 1990, retail lin1, ha, emerge4 int/ an internet ena2le4 SCM ,5,tem 0h/,e 8un.ti/n 0ere n/t ./n8ine t/ the invent/r5 management 2ut al,/ ./vere4 ./lla2/rative -lanning 8/re.a,ting an4 re-leni,hment )C!AR*( $n the C!AR Wal+Mart 0/r1e4 t/gether 0ith it, 1e5 ,u--lier, /n a real time 2a,i, 25 u,ing the internet t/ B/intl5 4etermine4 -r/4u.t 0i,e 4eman4( Wal+Mart al,/ ,hare4 0ith it, ,u--lier, the a.tual ,ale, 4ata in ea.h ,t/re 8/r the -a,t t0/ 5ear,( A../r4ing t/ the v/luntar5 inter+in4u,tr5 ./mmer.e ,tan4ar4, )V$SC* a,,/.iati/n< an /rgani3ati/n /8 ren/0ne4 retailer, an4 manu8a.turer,< ./lla2/rative -lanning< 8/re.a,ting an4 re-leni,hment i, 4e8ine4 a, a 2u,ine,, -ra.ti.e 8/r 2u,ine,, -artner t/ ,hare 8/re.a,t an4 re,ult 4ata thr/ugh the internet( The 2ene8it, /8 C!AR -/tential ri,e in ,ale, at the ,t/re, thr/ugh 2etter invent/r5 -/,iti/n 8a.ilitate4 2etter management 8/r 4i88( .ateg/rie, 8/r the retailer, enhan.e .u,t/mer ,ervi.e at the ,t/re,( Wal+Mart an4 the ,u--lier, t/gether 4etermine the re/r4er 6uantitie, an4 re-leni,hment /8 invent/rie,( With the hel- /8 C!AR ,/8t0are the ,u--lier 0/ul4 get real time in8/rmati/n /n -r/4u.t that 0ere ,elling 0ell ./ul4 in.rea,e the -r/4u.ti/n /8 re-leni,h them 8a,ter at ,t/re,( Wal+Mart laun.he4 C!AR a, a -il/t -r/Be.t 0ith 0armer lam2/r4 0ith it, li,ting -r/4u.e line in 1996( @/th Wal+Mart an4 lam2/r4 ,e-aratel5 their -r/Be.te4 4eman4 8/r li,ting 8/r a ,i: m/nth -eri/4 an4 e:.hange 4eman4 8/re.a,t an4 a.tual ,ale, in8/rmati/n( @5 u,ing the C!AR ,/8t0are the5 arrive4 at a ./mm/n 8/re.a,t( The re,ult, 0ere 6uite en./uraging< Lam2ert 0a, a2le t/ in.rea,e the ,t/.1 -/,iti/n /8 Li,terine 8r/m 8' t/ 98 C(The ,ale, /8 Li,terine gre0 25 D8(5 milli/n in 6 m/nth( The en./uraging re,ult /8 the -il/t -r/Be.t -r/m-te4 Wal+Mart t/ e:ten4 C!AR t/ /ther ,u--lier, in.lu4ing Sara Lee C/r-/rati/n an4 !E %( The -il/t 0a, ./n4u.te4 /n 9; 2ran4, 0hi.h ./n,i,te4 /8 0/men un4er 0are, item,( The ,ale, /8 Sara Lee 2ran4e4 a--arel at Wal+Mart in.rea,e 25 ;5C in =1 0ee1, an4 in the ,ame -eri/4 turn/ver 0a, in.rea,e4 25 ;0C( Wal+Mart 4e.i4e4 t/ e:ten4 the 2ene8it /8 C!AR t/ it, th/u,an4, /8 ,u--lier, thr/ugh it, 0e2 ena2le4 Retail Lin1 S5,tem( Retail Lin1 0a, /ne /8 the 1e5 ./ntri2ut/r t/ Wal+Mart ,igni8i.ant gr/0th in revenue, in the 1990, 0hile the Wal+Mart ,ell in.rea,e4 25 ='C 8r/m D9;(6 2illi/n t/ D1;'(6 2illi/n( The Retail Lin1, 4ata 0areh/u,e in.rea,e4 it, ,t/rage .a-a.it5 8r/m 50 tera25te, t/ 101 tera25te,( The 90 C /8 0al mart ,u--lier, 0ere 4/ing 2u,ine,, thr/ugh Retail lin1( Thr/ugh C!AR 0a, a -r/mi,ing ,u--l5 .hain initiative aime4 at a mutuall5 2ene8i.ial ./lla2/rati/n 2et0een Wal+Mart an4 it, ,u--lier,< it, a.tual im-lementati/n re6uire4 huge inve,tment, in time an4 m/ne5( Wal+Mart trie4 t/ im-lement C!AR ./m-laine4 that a ,igni8i.ant am/unt /8 time ha4 t/ 2e ,-ent /n 4evel/-ing 8/re.a,t, an4 anal53ing ,ale, 4ata< $n ,-ite /8 it, 2ene8it,< the,e ,u--lier, relu.tant t/ 2r/a4en the im-lementati/n /8 C!AT 8/r a l/nger term an4 8/r m/re than /ne -r/4u.t(