WALMART: SUPPLY

CHAIN
MANAGEMENT
BY:
HINA YOUNIS
MAIRA FAYYAZ
MASHAL IDREES
RUMAN TARIQ
 Problem
• Redesigning Of the supply chain strategy To deal with the
challenges based by the company , i.e. Increasing
competition from the giant online traders like Amazon.
 Company
• Number 1 retailer in the world
• Walmart conducted businesses in 27 countries and served nearly 275
customers each week In Its more than 11300 stores
• Its strategy was to provide a broad assortment of quality products
And services at everyday low prices.
• They have 3 main online programs
1. Walmart.com
2. Marketplace
3. Jet.com
 Customers

• Target audience:
• People who aimed for value in terms of the cost incurred.
• Wal-Mart set itself apart (in terms of its customers value enhancement)
based on its two pricing strategies:
• High lo pricing: Keep prices of everyday goods at a market level with
discounts on a few items (helps increase gross profit as consumers are
expected to buy high priced item as well.
• EDLP pricing strategy: Prices of items kept consistent on week to week
basis and kept as low as possible in order to generate customer traffic
• Pricing strategy in terms of its online programme:
• Walmart.com (launched in 2000) – Low Price, value conscious buyers as
target markets.
• Marketplace (2009) a seamless platform that hosted third party sellers
• Jet.com purchased in 2016 a high end retailer of customer goods – Urban
Millennial online features for low price.
• By acquiring Lord & Taylor, Bonobos, Moosejaw, hayneedle and shoe buy;
Wal-Mart took a step at reaching towards a more high end income group
in the departments of clothing, furniture, etc.
• Increased in demand for home delivery especially from millennial.
 Collaborators
• Ford on the development of the Self driving cars for grocery deliveries.
• Lord and Taylor and Advance Auto parts to bring upscale brands to Walmart.com
• Purchased Bonobos online designer and seller of high-end men’s clothing
• Purchased Moose jaw an online outdoor product retailer
• Purchased Hayneedle an online furniture and home décor shop
• Purchased Shoebuy an online shoe retailer
• 2018 – Expanded operations to India - Bought 77% of India’s Flipkart an ecommerce
retailer
• Established international purchasing offices in China and other countries to expand
company’s private label products.
• Many suppliers opened offices in Bentonville to support Wal-Mart’s expansion (Where
buyers are located) to facilitate the supply chain process as every quarter suppliers held
meetings to discuss new merchandise, exchange information and review prototypes.
• Worked with suppliers based on medium to long range strategies (product
trends, capacity management, etc.)
• Insisted on single invoice pricing and did not approved to any online or in store
advertising.
• 2019 – Wal-Mart changed its advertising strategy for key clients like Unilever,
P&G – essentially allowing them to advertise on online and physical Wal-Mart
stores (a response to Amazon’s increasing advertising revenue).
• 60,000 suppliers with 200 key global suppliers (Nestle, Procter &Gamble,
Unilever and Kraft).
• 173 Distribution centres in the U.S, 125.8 million sq feet of space. (Regional
centres, grocery points, fashion stores, import points, e-commerce fulfilment
centres, pharmaceutical stores.)
• 8000 truck drivers in US ,6000 tractors ,53500 trailers 5600 refrigerated trailers
• In 2019 hired 40000 store workers to pick groceries for online.
• Four types of inventories:
1.Finished goods
2.Transit
3.Buffers
4.Anticipation (seasonal)
• Retail Link system – increased cooperation with and accountability of
suppliers.
• Bought inventories in bulk, (goal was to maximise savings for
consumers).
• 2019- Suppliers expected to meet delivery orders, expected to meet their
two-day windows 87% of the time from 85% to prevent products going
out of stock
 Store Culture
• Associates kept up to date with a daily 10 minutes long meeting about
day, week and month store sales.
• 2018 – Increased hourly wages for entry level associates in order to
attract and retain talent
• Experimenting with organizational models that would give more
decision making power to its ground level employees.
• Aimed to design the store as a ‘Store of community’ to enhance a
sense of community amongst employees.
 Context
1.Technology:
• Walmart used Bar code scanning, self scanning shelves, mobile apps for
convenience, pick up towers, food traceability programs, etc.
• Sold Brazilian operations to attract higher income customers online and to
invest in labour saving technology.
2. Social :
• Increased consumer satisfaction.
• High low pricing and every day low (EDLP) pricing strategies.
• Millennials preferred maximize convenience in terms of home (spurred by
Amazon and other online retailers)
• In 2019, Walmart introduced consolidation centres to improve supply
chain efficiency.
3. Political:
• New country laws, like in India where new e commerce restrictions
have prevented foreign online retailers from selling their own
products
• led Walmart pulling of thousands of products off its market online.
 Competitors
• Traditional one-store, owner operated retailer, discount stores,
department stores, variety and convenience stores, specialty stores and
super markets.
• Internet Retailers and catalogue retailers – Biggest online competitor
Amazon
• Amazon - 40%of the total online sales in US ($206.96 Billion)
• Amazon had 75 fulfilment centres and 25 sortation centres in North
America. It attracted higher income consumers.
• Facing competition from large ticket general merchandise products
• Big competitors in the U.S - Costco , Target , Home Depot , Ikea , Kroger
• Adi
• Walgreens
• CVS
• Safeway
 Solution
Wal-Mart (in order to compete with Amazon in terms of online
business and to cater to millennial consumer’s need for convenience)
should focus on moulding its supply chain strategy to compete online
retail centres like Amazon.com as both are different business models
that require different supply chain strategies, designs, and processes.