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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 STORES
CENTER

• 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 Weakness
Cost advantage Ignore store decoration
Low price & customer-oriented Since Wal-Mart sell products
Strong supply chain across many sectors (such as
People are key to success clothing, food, or stationary), it
may not have the flexibility of
some of its more focused
competitors.

Opportunity Threat
Build its own brand Other competitors
Put efforts on social welfare Intense price competition
 better image
New locations and store types
Overseas markets

WALWal-Mart Stores, Inc.


and SWOT Analysis
Bibliography

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

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