CASE STUDY ON WAL-MART DISTRIBUTION

SUBMITTED TO
PROF. MR. SHAM SHARMA M.A. (LUCKNOW), D.M.M.(LONDON)

SUBMITTED BY
SUMIT GUPTA SUSHANT MISHRA UMESH GUPTA VIKASH SINGH VISHAL SINGH VIVEK RANJAN

INSTITUTE OF PRODUCTIVITY & MANAGEMENT, MEERUT

PAGE 1

warm response and for filling every gap in our personal development and knowledge enlightens and valuable idea that made this assignment successful.ACKNOWLEDGEMENT We would like to show our gratitude to Resp. Mr. We thank him whole heartily for his consent encouragement. Prof. Mr. We are grateful to Resp. Sham Sharma. for providing us with the golden opportunity to prepare an intellectual report. Without his kind support it would have been difficult for us to complete the report. so meaningful and interesting in a short period of time. MEERUT PAGE 2 . on Distribution & Logistics Management of ³WAL-MART´. INSTITUTE OF PRODUCTIVITY & MANAGEMENT. Sham Sharma. Prof. for guiding us to prepare an aesthetic report on Distribution & Logistics Management of ³WAL-MART´ with the proper information and knowledge of sixteen elements of formal report writing.

........................................................................... 2 EXECUTIVE SUMMARY ................. BIBLIOGRAPHY .........................................................................................................................................................................................................................CONTENT ACKNOWLEDGEMENT ..................................... 10 INSTITUTE OF PRODUCTIVITY & MANAGEMENT..... 4 INTRODUCTION .. 8 SUPPLY CHAIN SYSTEM OF WAL-MART ............................ QUESTION AND ANSWER .................................. Error! Bookmark not defined............ MEERUT PAGE 3 ................... 6 SWOT ANALYSIS ............................. 5 HISTORY............................................. Error! Bookmark not defined......

Then we have described the supply chain system of Wall-Mart. WalMart has four Parts of their corporate strategy. INSTITUTE OF PRODUCTIVITY & MANAGEMENT. including the standard set by the Wal-Mart for its supplier. and International Markets. Its public affairs strategy enables the company to move into other sectors of the marketplace and expand into foreign countries. In this report first we have done the SWOT analysis of Wal-Mart. MEERUT PAGE 4 .Mart has a very active Political Action Committee that gives almost a quarter million dollars annually. Branch Out into New Sectors of Retail. Expansion in the U. This case study is based on the Distribution Channel and Supply system of WallMart. 2. The public affairs strategy also involves gaining access to politicians who can help Wal-Mart achieve its goals. Dominance in the Retail Market. 1. Creation of Positive Brand and Company Recognition. 4. is the largest retail company in the United States and has been ranked number one on the Fortune 500 Index by Fortune Magazine. Wal-Mart¶s public affairs strategy must work to make implementation of these policy goals happen. Finally we tried our best to answer all the questions.EXECUTIVE SUMMARY Wal-Mart Stores Inc. 3. Wal.S.

Sam's Club. Walmart employs 2. Walmart ranked first among retailers in Fortune Magazine¶s 2010 Most Admired Companies survey.S.INTRODUCTION Wal-Mart Stores. Inc. with an estimated 20% of the retail grocery and consumables business. Wal-Mart is the largest grocery retailer in the United States. is an American public corporation that runs a chain of large. corporate philanthropy and employment opportunity. MEERUT PAGE 5 .747 retail units under 55 different banners in 15 countries. INSTITUTE OF PRODUCTIVITY & MANAGEMENT.1 million associates worldwide. With fiscal year 2010 sales of $405 billion. It is the largest private employer in the world and the fourth largest utility or commercial employer. A leader in sustainability. discount department stores. Walmart serves customers and members more than 200 million times per week at more than 8. It is the world's largest public corporation by revenue and is founded by Sam Walton in 1962. It also owns and operates the North American Company. as well as the largest toy seller in the U.

Target.1 million associates. With this infusion of capital. Our history is a perfect example of how to manage growth without losing sight of your values. there were 1. Our most basic value has always been. 1972 ± WALMART GOES PUBLIC Discounters such as Kmart quickly expanded in the 1960s. the first Sam¶s Club members-warehouse store opened. and Walmart first opened. while Sam only had enough money to build 15 Walmart stores. Employment had increased tenfold. But actually. and 36 departments of general merchandise. INSTITUTE OF PRODUCTIVITY & MANAGEMENT. 8.747 stores and club locations in 15 countries employ 2.HISTORY THE BIRTH OF DISCOUNT RETAILING Most people think discount retailing began in 1962 ± the year that Kmart. The first Supercenter opened in 1988. Sam traveled the country studying everything he could about discount retailing. By 1989. the chain of variety stores Sam Walton owned during the 1950s faced stiff competition from many regional discount stores. Ark. serving more than 176 million customers a year. Sales had grown from $1 billion in 1980. In 1972. 1962 ± WALMART BEGINS Before opening Walmart. and always will be. Sam and his wife Helen put up 95 percent of the money for the first Walmart store in Rogers. to $26 billion. Walmart stock was offered for the first time on the New York Stock Exchange. THE 1980S ± WALMART COMES OF AGE In 1983. our company grew to 276 stores in 11 states by the end of the decade. customer service. Trusting his vision. MEERUT PAGE 6 . featuring a complete grocery. THE 21ST CENTURY ± ONE OF THE MOST SUCCESSFUL RETAILERS IN THE WORLD Today.402 Walmart stores and 123 Sam¶s Club locations. He became convinced American consumers wanted a new type of store.

and a pleasant shopping experience. You love it when a store exceeds your expectations. the lowest possible prices. gives you a hard time. and you hate it when a store inconveniences you. guaranteed satisfaction. MEERUT PAGE 7 . Sam said. or pretends you're invisible. "« if you think about it from the point of view of the customer. knowledgeable service." INSTITUTE OF PRODUCTIVITY & MANAGEMENT. you want everything: a wide assortment of quality merchandise.SAM¶S SECRET ² GIVE YOUR CUSTOMERS WHAT THEY WANT In his autobiography. friendly. convenient hours.

With the help of this system it can analyze the performance of its product in different country. convenience and a wide range of products all in one store. merge with. INSTITUTE OF PRODUCTIVITY & MANAGEMENT.  Wal-Mart uses the information technology to support the international logistic system. food.  Since Wal-Mart sell products across many sectors (such as clothing. it may not have the flexibility of some of its more focused competitors. OPPORTUNITIES  To take over. focusing on specific markets such as Europe or the Greater China Region. or stationary).  Employee of Wal-Mart is considered as a greatest strength. it gives value for money.SWOT ANALYSIS STRENGTHS  One of the greatest strength of Wal-Mart is that. but has a presence in relatively few countries Worldwide. WEAKNESSES  Wal-Mart is the World's largest grocery retailer and control of its empire.  The stores are currently only trade in a relatively small number of countries. Therefore there are tremendous opportunities for future business in expanding consumer markets. or form strategic alliances with other global retailers. A trained employee helps to save the cost of the organization. despite its IT advantages.  The company is global. Wal-Mart spends a large amount of money to train its employee. Wal-Mart is considered as a powerful retail brand in US. Wal-Mart acquired ASDA retailer in United Kingdom. could leave it weak in some areas due to the huge span of control. MEERUT PAGE 8 .  Wal-Mart has expended their business in other countries. such as China and India.

Intense price competition is a threat.  Opportunities exist for Wal-Mart to continue with its current strategy of large. super centers. MEERUT PAGE 9 . locally and globally. resulting in price deflation in some ranges. This has lead to price competition.  The cost of producing many consumer products tends to have fallen because of lower manufacturing costs.  Being a global retailer means that you are exposed to political problems in the countries that you operate in. Manufacturing cost have fallen due to outsourcing to low-cost regions of the World. New locations and store types offer Wal-Mart opportunities to exploit market development. INSTITUTE OF PRODUCTIVITY & MANAGEMENT. to local and mallbased sites. They diversified from large super centres. THREATS  Being number one means that you are the target of competition.

In many cases the same truck can even be used for inbound and outbound shipments including those carrying new merchandize to store and those carrying returned outdated or unneeded merchandize from store thus minimizing wrong trip shipping cost. and the hardware that went along with it. IN SOME CASES WELL BEYOND THEIR CORE COMPETENCY. which tracked consumer behavior. However most of the time we have found that the suppliers are getting help from the Wal-Mart in term of technology and various other sources. ANS: As we know that. and pricing information between central store inventory system and personal with scanner on the store shelves. This degree of connectivity allows rapid response to the inventory needs and reduces dramatically the amount of inventory required. transmission of product UPC. the cornerstone of Wal-Mart's increased efficiency was its trend-forecasting software. began developing a program called Retail Link. eventually costing $4 INSTITUTE OF PRODUCTIVITY & MANAGEMENT. The information then could be used to examine consumer taste trends. gauge demand and eliminate the need for warehousing -manufacturers would deliver "just in time.RELATIONSHIP OF WAL-MART WITH SUPPLIERS Q) WAL-MART WAS SINGULARLY EFFECTIVE IN UP GRADING THE TECHNOLOGY OF ITS SUPPLIERS. By the early '80s. WalMart had always invested heavily in infrastructure. thereby increasing efficiency and lowering the company's inventory costs. A satellite system connection all the stores was initially installed in 1983. Put simply as each store sells and items a message is automatically send to the supplier of that item who then knows to include a replacement in the next shipment to the nearest distribution hub. However. To take on powerful brand-name suppliers." And so. Wal-Mart is one of the biggest retail chains in US. Wal-Mart establish a network of innovative hub which use cross-docking. took years to perfect. This system facilitated a modified just in time process of inventory control. In this model as shipment arrives at the warehouse merchandize is moved directly to the trucks carrying the outbound shipments to the specific store. Walton would make a massive bet in information technology. Wal-Mart was one of the earliest to take advantage of the bar code to increase efficiency at the checkout counter. to minimize distribution center inventory and to facilitate the need based inventory delivery system enabled by the satellite network. a feat virtually unheard of in general merchandize retailing. and grew into a complex communication network that included all stores. there most valuable infrastructure investments were made at the significantly higher level. sometime the relationship with the suppliers has been taken in a positive way and sometime it is taken in a negative way. The aim now was to find a way for technology to help Wal-Mart come up with the right mix of goods for its individual stores. The software. They were among the first to use point of sale uniform product codes (UPC) scanning and intra store radio frequency (RF). A second area of major investment was in distribution technology. In 1985. headquarters and distribution centers as well suppliers. The idea was to transmit point-of-sale information in real time to manufacturers. Walton and his chief lieutenant. David Glass. MEERUT PAGE 10 .

drawn from the data imbedded in the barcodes that passed through checkout counters. in order to help them meet the retailer's needs more efficiently. more resilient. sees it as a way to make suppliers leaner.. It turned the supplier-retailer relationship upside-down. ³Walmart.billion. but that¶s not necessarily why they are doing it. and more competitive." Example: At the heart Wal-Mart's offer to share its software program was a Faustian bargain for suppliers: Use our Retail Link program. It drew them into what Sam Walton liked to call a partnership: Wal-Mart was plugged into the supplier and the supplier was plugged into Wal-Mart. goods whenever possible.S. But Wal-Mart had the upper hand: By gaining access to its supplier's books. that¶s great news for the environments. the program recorded a 5% improvement in over 100 factories and determined that the ³suppliers had the capacity to do much more. many Wal-Mart suppliers were American firms with factories in the U. MEERUT PAGE 11 .´ INSTITUTE OF PRODUCTIVITY & MANAGEMENT. packaging. in its first year. According to a recent BSR Insight article. Wal-Mart has decided to raise the bar. Wal-Mart Boosts Energy Efficiency of Chinese Suppliers In 2008. Businesses for Social Responsibility (BSR) has been recruited to help them achieve that goal. by sharing Retail Link. In fact. the company was in a position to virtually dictate the terms of its contracts on price. And it allowed the giant retailer to set the profit margin each supplier would get. Wal-Mart gained command over its suppliers and effectively penetrated their executive decision-making. Wal-Mart shared this revolutionary software with suppliers at no cost. but they would have to upgrade their operations and improve productivity to "fill our requirements. which focused on using domestic manufacturers. Or refuse. and be shut out of America's dominant retail chain. delivery schedule. volume. a relentless cost-saver. This revolutionary system delivered sophisticated information on consumer behavior. But Walton also insisted on ruthless efficiency. and so sharing the Retail Link system dovetailed with Sam Walton's "Buy American" campaign. An impressive figure. As he wrote in a letter to his suppliers in 1985. play by our new rules and we will be your gateway to sales beyond your wildest dreams. They have now announced that they will eliminate 20 million tons of GHG emissions for its supply chain. In the early years. Wal-Mart CEO Mike Duke announced that the company would improve the energy efficiency of its top 200 Chinese suppliers by 20% by the year 2012. and quality.´ Building on that achievement. According to BSR¶s Ryan Schuchard.S. he was committed to buying U.

unlike some other countries. including a company¶s supply chain into account. Wal-Mart is in a unique position to make this happen because of their size. MEERUT PAGE 12 . According to the BSR report. is cost effective. and it¶s great that they are doing it. Show the road map. The good news is that energy efficiency in China. a concerted energy efficiency program in China could conceivably reduce global energy demand by 5%. but when it comes to GHG emissions. Address barriers like the lack of infrastructure that makes energy savings hard to verify.Given this December¶s scheduled rollout of the Scope 3 GHG Accounting Principles . The bad news is that in China. it is a land of low-hanging fruit. Chinese factories use roughly 11 times as much energy than their Japanese counterparts. Of course. Not only is China the source for many of the goods that eventually end up in the US. Get senior management buy-in. They need to be shown the essential linkage between productivity and growth. it makes good sense that others should follow their lead. Implement. According to Schuchard. In many ways. INSTITUTE OF PRODUCTIVITY & MANAGEMENT. Make sure that goals and timelines are explicit and clear. Chinese business owners are focused on growth.´ He recommends the following five steps: y y y y y Establish common ground. Build capability. And because China¶s energy demand is so high. ³The job of international companies in supply chain energy efficiency is to keep China¶s specific challenges in mind and build bridges between ESCOs (energy service companies) and suppliers. it helps when their biggest customer is looking over their shoulders. Make training a priority and provide backup support. since the ones paying the utility bills are often not the building owners and also because of government energy subsidies. Identify and deploy efficiency solutions. the market is inefficient. which takes a number of extended entities. now is a good time to start looking in to this. insofar as the price signals don¶t always reach the ears of the decision makers. Now that the doors have been opened. Require accountability.

Wal-Mart has more than 10. Ma said. "Before Wal-Mart only cared about price and quality. seems to have an eye for detail. Its 200 biggest suppliers in China have already trimmed 5 percent of their energy use. it would be China's fifth. It switched from Styrofoam to recycled paper and saved enough Styrofoam to cover four football fields. Energy-saving details. you're out of business. And China and Wal-Mart have come under sharp criticism for conditions in factories. "Wal-Mart says if you're over the compliance level. Wal-Mart presses suppliers on labor. environmental standards. Now Fung's biggest customer -. So the company hopes that small measures taken by all suppliers start to add up. says it treats four tons of wastewater that it used to dump into the municipal sewage line. Many China experts say Wal-Mart's guidelines could be more important than the government's.Benny Fung. SHENZHEN. Now new suppliers are screened for environmental practices. which has been here since 1991. They could lose contracts because competition was so fierce on price." which has become a touchstone for many companies. MEERUT PAGE 13 . In addition.or sixth-largest export market. it almost certainly wasn't. As a result." INSTITUTE OF PRODUCTIVITY & MANAGEMENT. director of the Institute of Public and Environmental Affairs.Wal-Mart Stores -. That water was supposed to be treated by the city. but like three-quarters or more of China's wastewater. the head of Hong Kong-based soap and cosmetics maker Lutex.In China. Not just everyday low prices. Wal-Mart held a conference in Beijing for a thousand of its biggest suppliers to urge them to pay attention not only to price but also to "sustainability. That will send a powerful signal. Environmental details. In the past. about a million farmers supply produce to the company's 281 stores in China. If Wal-Mart were a sovereign nation. "They are the rule setters. environmental concerns have taken a back seat to growth in China and to costs for WalMart. CHINA -. but low greenhouse gas emissions. In October 2008." Wal-Mart's suppliers have been forced to get serious about pollution. And Lutex. Lutex has been paying attention to more efficient light bulbs. better ventilation and less packaging. a Beijing-based group.is urging him to pay attention to other details." said Ma Jun.000 suppliers in China. so that encouraged companies to race to the bottom on environmental standards.

com/swot/walmart-swot.html http://marketingteacher.com/article/497559/Wal_Mart_Orders_Suppliers_to_Go_Green_an d_Some_See_Red http://allman.soopertutorials.files.cio.inter-disciplinary.BIBLIOGRAPHY BOOKS MARKETING MANAGEMENT PHILIP KOTLER INTERNET http://www.html INSTITUTE OF PRODUCTIVITY & MANAGEMENT.com/business/strategic-management/1846-wal-martswot-analysis.pdf http://www.com/2008/01/wal-mart.pdf http://www.itam.net/ati/Monsters/M6/besserman%20paper.mx/~oromero/Wal_Mart_CaseStudy.pdf http://mohanchandran.net/cost-and-investment/wal-mart-39-s-supply-chainmanagement-of-the.html http://www. MEERUT PAGE 14 .tekbar.wordpress.rhon.

Sign up to vote on this title
UsefulNot useful

Master Your Semester with Scribd & The New York Times

Special offer: Get 4 months of Scribd and The New York Times for just $1.87 per week!

Master Your Semester with a Special Offer from Scribd & The New York Times