Sam’s Clubs

SUPPLY CHAIN MANAGEMENT

Wal-Mart Stores, Inc.
a presentation by Group D
 Content to be Covered
• About Wal-Mart
• Operation
• Procurement and Distribution
Channel
• Logistic Management
• Inventory Management
• Core Competence
• SWOT Analysis
 About WALMART
• According to analysts, “Supply chain management
is moving the right items to the right customer at
the right time by the most efficient means. No one
does that better than Wal-Mart”.
• Sam Walton founder of Wal-Mart.
• US base Wal-Mart ranked 1st in the global fortune
500 list in the financial year 2001-02 earning
revenues of $219.81 billion.
• Largest retailing company in the world.

• Operates more then 3,500 discount stores.

• Focused on improving sales, constantly

reducing cost, adopting efficient distribution
and logistics management systems and
using IT.
 Achievements
2006
• Number of weekly customers grew to more than 176
million around the world, with 6,779 locations.

• Wal-Mart had record net sales of $345 billion.

• The company increased its ownership stake in Seiyu in

Japan, to 53.3 percent, and increased its ownership of
CARHCO to 51 percent, renaming the company Wal-
Mart Central America.
 Cont….

2007
• In August, Wal-Mart and Bharti Enterprises
announced an agreement to establish Bharti
Wal-Mart Private Limited, a joint venture for
wholesale cash-and-carry and back-end supply
chain management operations in India.

• The 3000th international store, a Supercenter in

Sao Paulo, Brazil, opened in November 2007.
 Cont….
2008
• On April 10, 2008, Sam's Club celebrated
its 25th anniversary. In 2008, Sam's Club
operates more than 590 locations
nationwide and more than 100 locations
internationally.
 Operations
• Today, 7,390 Wal-Mart stores and
Sam’s Club locations in 14 markets
employ more than 2 million
associates, serving more than 200
million customers per year.
• Wal-Mart Logistics has approximately
88,000 associates, 7,200 tractors,
and 53,000 trailers.
 PROCUREMENT AND
DISTRIBUTION
• Walmart emphasized on reducing its
purchasing costs and offer the best price
to its customers.

• The company procured goods directly

from manufacturers, bypassing all
intermediaries.

• Walmart spent significant amount of time

meeting with vendors.
• Goods distributed within the us
arrived in pallets.

• Imported goods arrived in re- usable

boxes or cases.

• Wal-mart used sophisticated barcode

technology and handheld computer
systems managing the center.
• Different barcodes were used to label
different products, shelves and bins in a
center.

• Hand held computer also enabled the

packaging department to get accurate
information about the products to be
packed.
 LOGISTICS MANAGEMENT
• Fast and responsive transportation
system.
• More then 3500 trucks.
DISTRIBUTION RETAIL
CENTER STORES

• Two hours gap between unloading of

each trailer.
• “Private Fleet Driver Handbook” for drivers
regarding code of conduct.

• They use logistics technique “Cross- docking”.

 Bullwhip effect
• The Bullwhip Effect (or Whiplash Effect) is a
problem which occurs because of lack
information between demand and supply. It is
also known as Forrester Effect.

• Customer demand is rarely perfectly stable,

businesses must forecast demand in order to
properly position inventory and other resources.

• Bullwhip Effect is a problem in forecast-driven

supply chains, and careful management of the
effect is an important goal for Supply Chain
Managers.
• It is necessary to extend the visibility of customer demand
as far as possible.

• Establishing a demand-driven supply chain which reacts to

actual customer orders.

• In manufacturing, this concept is called Kanban.

• Successfully implemented in Wal-Mart’s distribution system.

• Individual Wal-Mart stores transmit point-of-
sale (POS) data from the cash register back
to corporate headquarters several times a
day.

• This demand information is used to queue

shipments from the Wal-Mart distribution
center to the store and from the supplier to
the Wal-Mart distribution center.

• Better information leads to better inventory

positioning and lower costs throughout the
supply chain.
 INVENTORY MANAGEMENT
• Wal – mart invested heavily in IT and
communications system to effectively
track sales and merchandise inventories
in stores across the country.
• Wal- Mart set up its own satellite
communication system in 1983.
• The company entered into collaboration
with P&G and its stores and other
distribution centers.
 CORE COMPETENCE

• Wal-Mart strongly belived in strengthening its relationships with

its customers, suppliers, and employees.
• Wal- Mart also enjoyed the benefits of low
transportation cost by its own transportation
system by delivering the goods less than 48 hrs
or 48hrs.
• Wal-mart priced its goods economically and the
prices varied from day to day having good
bargaining power as it purchased huge
quantities.
• Reduction in lead time faster inventory turnover ,
accurate forecasting of inventory levels,
increased warehouse space, reduction in safety
stock and better working capital utilization.
• It eliminated old stocks and maintained
quality of goods.

• Bar coding and radio frequency

technologies enabled accurate distribution
of goods.

• Cross-docking also helps in reducing

inventory storage costs, to cut down labor
and other handling costs involved in the
loading and unloading of goods.
 Strength
Cost advantage
Low price & customer-oriented
Strong supply chain
People are key to success
Opportunity
Build its own brand
Put efforts on social welfare
 better image
New locations and store types
Overseas markets
WAL Wal-Mart Stores, Inc.
Weakness
Ignore store decoration
Since Wal-Mart sell products
across many sectors (such as
clothing, food, or stationary), it
may not have the flexibility of
some of its more focused
competitors.
Threat
Other competitors
Intense price competition
and SWOT Analysis
 Bibliography

• www.walmartstores.com
• www.icmrindia.org
• www.supplychains.in
• www.supply-chain.org
• www.ibef.org