Professional Documents
Culture Documents
600 stores
1984 Sales about $4.5 bn. Profit $ 200 million.
Inventory
Management
m Procured goods directly from manufactures.
m A tough negotiator.eg-P&G
m Spent significant time meeting vendors & understanding
their cost structure.
m 40 distribution centers in US; over 80,000 items stored in
the year 1998.
m Own warehouses provided 85% inventory; replenishment
within 2 days; shipping cost was roughly 3%
m Different sections on the basis of quantity of goods
received.
m Goods meant for distribution in US arrived in pallets.
m Imported goods arrived in re-usable cases.
m Delivery of automotive goods directly to the stores.
m Use of Barcode technology & Hand-held computer
systems.
m Barcodes provided an access to real time information
regarding inventory levels to every employee.
m Hand-held computer displayed all information about
storage, packaging and shipping of all products.
m Fast & responsive transportation system.
m 3,500 company owned trucks.
m Experienced drivers driven more than 3,00,000 accident-
free miles, with no major traffic violation.
m A coordinator scheduling all dispatches.
m Scheduled unloading time; gap of 2 hours between each
trailer.
m Private Fleet Driver Handbook.
m Use of ´cross- dockingµ ² logistics technique.
´Supply chainµ to ´Demand chainµ
Retailer ´pushingµ to Customer ´pullingµ
m Heavy investment in IT & communication system.
m Satellite Communication System in 1983.
m Also networked its supplier through computers.
m Collaboration with P&G; built automated re-ordering
system.
m ´Magic =andµ ² hand-held computer linked to in-store
terminals through a radio frequency network.
m Use of Point-of-sales (POS) system, sophisticated
algorithm system, centralized inventory system.
m Barcode & Radio frequency technology.
m $4 billion investment to build a retail link system.
m Efforts made to capitalize each cost saving opportunity
passed to consumers , Low pricing ensured high &
consistent sales volume.
m Low transportation cost
m Efficient supply chain management enabled reduction in
lead time; faster inventory turnover; accurate forecasting;
increased warehouse space; reduction in safety stock &
better utilization of working capital.
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