The Wal-Mart Story

Presented by:
Jincy John
• Sam Walton- Born on March 18,1918 in
Oklahoma, US

• 1940: Graduated from University of Missouri

and worked for JC Penney retail store

• Mid 1940s: Business and lessons

• 1969: 18 Wal-Mart stores with an annual sale of $44

million

• Mid 1970s: Acquired 16 Mohr-Value stores in Michigan

and Illinois

• Late 1970s: Established Pharmacy, auto service center

and jewellery divisions
• Offered EDLP, guaranteed customer satisfaction and
hours that were realistic for the way people wanted to
shop

• Membership- Whole sale prices

• 1992 : - Walton Died

- Wal-Mart Expanded into Mexico through a joint
venture with Cifra

• 1994: Acquired 122 Woolco stores from Woolworth,

Canada.

• 1997: - Became the largest volume discount retailer in

Canada and Mexico.
- Acquired 21-store German hypermarket chain.
 Other Expansion efforts
• 40% interest in joint venture with Brazilian
retailer Lojas Americans

• Acquisition of 4 stores and additional sites

in South Korea from Korea Makro

• 1999- Expanded in to German operations

by buying 74 stores of the hypermarket
chain, Interspar
• 2002- Emerged as the world’s largest company.

• Reason for the phenomenal growth

– Continued focus on customer needs
– Cost reduction through efficient supply chain
management practices

• Provided a vast range of products at the least

cost and shortest time. This was possible
because of
– Highly automated distribution centers
– Computerized inventory system
 Managing the supply chain
• Reduce purchasing costs and offer best
prices to customers

• Believed in establishing long-term

relationship with vendors

• 1998: 40 distribution centers across

different geographical locations with 80000
items stocked in these centers
 Wal-Mart Competitors
1.Own warehouses 1. Own warehouses
supplied 85% of supplied 50-65% of
inventory inventory

2. Replenishments took 2. Replenishments took

place within 2 days atleast 5 days

3.Shipping cost was 3. Shipping cost was

approximately 3% approximately 5%
• Distribution center was divided based on
the quantity of goods received

• High inventory turnover rate

• Goods within US arrived in pallets and

imported goods arrived in cases

• Goods like automotives and drugs were

supplied directly to the stores
• Wal-Mart used Bar-code technology and
hand-held computer systems for managing
the center

• Distribution centers had facilities for

maintaining personal hygiene, food, sleep
and personal business.

• Distribution centers were also used for

meetings and paperwork.
 Logistic Management
• Fast and responsive transportation system

• Distribution centers serviced more than 3500

trucks

• Employs experienced drivers

• Strict vigil over drivers- Private fleet driver

handbook
Cross Docking
 Types of Cross Docking
• Opportunistic cross docking

• Flow through cross docking

• Distributor cross docking

• Manufacturing cross docking

• Pre-allocated cross docking

 Inventory Management
• Wal-Mart invested heavily in IT and
communications

• Satellite Communication system

• It networked with its suppliers through

computers

• Collaborated with P&G for maintaining inventory

in its stores
• Hand-held computer- The Magic Wand

• Point-Of-Sales system

• Sophisticated algorithms for forecasting

• Centralized inventory data system

• Bar coding and radio frequency technology

• Retail link system

• Massively Parallel Processor (MPP) computer system

• Contingency plan
 Benefits
• Capitalized on every cost saving opportunity

• Low transportation cost- 4 times faster replenishment of

shelves

• Economic pricing of goods- high sales volume

• Efficient supply chain management

- reduction in lead time
- faster inventory turnover
- accurate forecasting of inventory levels
- increased warehouse space
- increased efficiency in operations and better
customer service
THANK YOU!!!