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Wal Mart Final

Wal-Mart is the largest company in the global Fortune 500. It operates a chain of large discount department stores and warehouse stores. Wal-Mart achieved its leadership status through an effective supply chain management system focused on low costs. This included direct procurement from vendors, efficient distribution centers, cross-docking, inventory management technologies like barcoding and RFID, and their own transportation fleet. These supply chain practices helped Wal-Mart reduce costs and prices while increasing inventory turnover to benefit customers.

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Faizan Usmani
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60 views

Wal Mart Final

Wal-Mart is the largest company in the global Fortune 500. It operates a chain of large discount department stores and warehouse stores. Wal-Mart achieved its leadership status through an effective supply chain management system focused on low costs. This included direct procurement from vendors, efficient distribution centers, cross-docking, inventory management technologies like barcoding and RFID, and their own transportation fleet. These supply chain practices helped Wal-Mart reduce costs and prices while increasing inventory turnover to benefit customers.

Uploaded by

Faizan Usmani
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Wal-Mart

Zain akhtar
Wal-Mart Introduction
 Wal-Mart is an American public multinational corporation that runs a chain
of large discount department stores and a chain of warehouse stores.
 Wal-mart ranked first in the global fortune 500 list in the financial year
2001-02 earning revenues of $ 219812 millions.
 Wal-mart was able to achieve a leadership status because of its effective
supply chain
 To sustain competitive advantage, a firm must ensure that its competition
finds it hard to imitate its chosen position.
Revenues
Rank Companies
($ millions)
1 Wal-Mart Stores 219812
2 Exxon Mobil 191581
3 General Motors 177260
4 Ford Motor 162412
5 Enron 138718
“Offering significant discounts on prices, he became
successful and acquired a second store in 3 years.”
SO
SIMPLE

If you sell something


at a really low
price…
Key Issues
 Inflation Rate.

 Growing Competition & Globalization.

 Strategy of Cost Leadership.

 Maintaining and Managing Bulk Inventories.

 Maintaining IT.

 Catering of Customer needs.


Key Issues
 Reducing Transportation and Shipping Cost.

 Relationship with Vendors, Employees & Customers.

 Efficient Distribution Process & Cross Docking.

 Continuous Demand Chain.


Wal-Mart Strategy and Structure

WAL-MART STRATEGY & OPERATIONS


STRUCTURE
Enable everyday low prices and above average profitability by procuring, distributing, and
selling products, when and where needed, at lower costs than any competitor.

Operations Structure
Operations Strategy
• Fast Transportation System
• Cross Docking
• Short Response Times
• Low Inventory Level
• Retail Link
• RFID
Strategies
Procurement & Distribution
 Wal-Mart’s focus has always been to sell goods at a lower
price to the customers.

 They ensured direct purchase form the companies


bypassing the intermediaries. This by passing is one of
the ways to reduce cost.

 Wal-Mart preferred local and regional vendors to the big


players however the vendor who provides the best price
qualifies and gets the deal.
Strategies
Procurement & Distribution
 Because of bar code technology and hand held computer
systems, managing the center become easier.

 Different bar codes were used to


label different products, shelves and
bins in a center.

 The hand held computers guided an


employee with regard to the location
of a particular product from a
particular bin or shelf.
Strategies
EDI
 The computer systems of Wal-Mart were connected
to those of its suppliers.
 EDI enabled the suppliers to download purchase
orders along with store-to-store sales information
relating to their products sold.
 On receiving information about the sales of various
products, the suppliers shipped the required goods
to Wal-Mart’s distribution centers
Strategies
Logistic Management
 Wal-mart has fast and responsive transportation system

 The distribution centers were serviced by more than


3,500 company owned trucks.

 Wal-mart believed that, it needs driver who are


committed and dedicated to customer service.

 The retail stores were considered customers by the


distribution centers.
Cross Docking

 To make its distribution process more efficient,


Wal-Mart also made use of a logistics technique
called “cross-docking.”

 In this system, the finished goods were directly


picked up from the manufacturing plant, sorted
out and then directly supplied to the customers.
Cross Docking
Benefits

Reduce Labor Reduce handling


Costs costs

Reduce
Reduces product
inventory
Benefits obsolescence
storage costs
from
Cross
Docking
Strategies
Inventory Management

Heavily investment in IT and communication


systems.
Inventory Management Strategies

Magic
Wand

POS
MPP
system
IT
Systems

Retail
Link RFID
System
Impacts
 Wal-Mart’s Supply chain management practices
resulted in increased efficiency in operations and
better customer service.

 Wal-Mart was one of the first retailers that seriously


invest in it's IT infrastructure. This gave Wal-Mart
stronger foundation in information technology
comparing to competitors.

 Cross Docking also helped Wal-Mart to reduce


inventory storage cost.
Benefits

Faster Inventory Turnover Elimination of Stock out

Increased Other
Reduction in
Warehouse Spaced Benefits safety stock

Reduction in Lead Time


Bar coding enabled
accurate distribution of goods
Benefits Reaped
Wal-Mart enjoyed the benefits of low transportation cost since it has its
own transportation system.
This helps Wal-Mart in delivering the goods to different stores within ( or
sometimes less than) 48 hours

The company enjoy good bargaining power as it purchased huge


quantities.
The company offered higher discounts than any other retailer .

The savings on cost were passed on to the customers, thereby adding value
at every stage and process
Conclusion

 The case examines the supply chain management


practices at Wal-Mart, the leading retailer in the
world.

 Wal-Mart has been able to achieve respectable


leadership in the retail industry because of its focus
on supply chain management.

 They used the innovative information technology


tools that benefited Wal-Mart’s supply chain
management.
Thanks for your attention!

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