Sa Walton (1918–1992), Founder H. Lee Scott, CEO Key people S. Robson Walton, Chairman Tom Schowe, CFO Industry Retail Products Discount stores, grocery stores, and hypermarkets Revenue US$351.1 billion (2007) Industry US$11.3 billion (2007) Products 1.9 million (2007) Website http://www.walmart.com • Purchasing and Distribution • Retail Strategy • Information systems • Remix – High Velocity(food) Distribution centers • Use of RFID Technology Source: Adapted from Garrison Wieland for “Wal-Mart’s Supply Chain,” Harvard Business Review 70(2; March–April 1992), pp. 60–71. • Cut the Middleman • Source Product globally - China(1980) • Private label - low price as compared to brand • Enormous power over its supplier • Approx 90000 supplies including P&G, Nestle and Unilever etc. • Hub and Spoke system – Design of high volume DC serving a cluster of stores • Cross docking – See next slide • ‘Back – Haul’ Revenue by trucks by transporting unsold merchandise on the way back Cross-docking means to take a finished good from the Manufacturing plant and deliver it directly to the customer with little or no handling in the process. • Everyday low prices (EDLP) - prices on items at relatively low compared to the everyday market price (maintaining customer trust in pricing and customer loyalty) • Clicks and bricks model - allows the customer to order products either online or physically in one of their stores, also allowing them to either pick-up their order directly at a local branch of the store • Price match guarantee it has challenged other competitors to reduce their • Demand was smoothed out to reduce the bullwhip effect • Low advertisements – give saving back to customers • 1980 -Retail Link System – 570TB , largest civilian database • Store level POS data • UPC bar code Implementation • VMI- Vendor Managed Inventory – Diapers by P&G • Collaborative Planning , Forecasting, and Replenishment(CRPF) • Help in higher service level and low outs(out of stock) • Satellite Network – POS data transfer , broad cast videos message by senior management A means of optimizing Supply Chain performance in which the manufacturer is responsible for maintaining the distributors inventory levels. The manufacturer has access to the distributors inventory data and is responsible for generating purchase orders. Manufacturers generate orders, not distributors or retailers Stocking information is accessed using EDI A first step towards supply chain collaboration Increased speed, reduced errors, and improved service Point-of-sale Data is Orders are Merchandise is Customer Merchandise The store will re- system transmitted to generated from loaded onto made a is delivered to stock the shelves captures data warehouses previous-day trucks using purchase the store with merchandise in real-time for Inv. Mgmt. sales cross-docking
Retail Link Merchandise is
Merchandise transmits manufactured is shipped to data to based on historical warehouses supplier and real-time data • Automated Data collection based on an electronics – not a barcode • Tag can be imbedded in the product or stuck on the exterior case or pallet • Reader instead of a barcode scanner • Allows fully automated data collection with the use of portals • Can read many ID tags at a time • Wal-Mart replaced bar-code technology with RFID technology to reduce costs and increase the efficiency, in July 2003, and asked its top 100 suppliers to be RFID compliant by January, 2005. The company believed that this replacement would reduce its supply chain management costs and enhance efficiency.
• Due to implementation of RFID, employees were no longer required to
physically scan the bar codes of goods entering the stores and distribution centers • Cost reduction and less numbers of outs Thank you !!