WalMart and Mattel: Supply Chain Management Best Practices

1
Wal-Mart and Mattel Supply Chain Management Best
Practices

• Chapter 6 Case 5
• Page 216

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Team Members

• Elisabeth Cates
• Yvonne Hildebrand
• Jesse Janis
• Mary Napier
• Nina Wolf
• Eric Young

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Walmart

• www.walmart.com

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CEO John B. Menzer

• Executive Vice President and President and Chief
  Executive Officer, Wal-Mart International
  Division since 1999
• 1995 1999 Executive Vice President and Chief
  Financial Officer for Wal-Mart Stores, Inc.
• 1999 CFO Excellence Award from CFO Magazine
• Prior to joining Wal-Mart, he was President of
  Ben Franklin Retail Stores, Inc

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History - Founder

• Sam Walton in 1962
• On this picture in 1984 he does the hula at high
  noon on Wall Street, making good on promise to
  associates after company achieves pre-tax profit
  of 8 percent in 1983.

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History some important dates

• 1962 Company founded with opening of first
  Wal-Mart in Rogers, Ark.
• 1967 Wal-Mart's 24 stores total 12.6 million in
  sales.
• 1970 Wal-Mart opens first distribution center
  and home office in Bentonville, Ark.
• 1977 Wal-Mart makes first acquisition, 16
  Mohr-Value stores in Michigan and Illinois.
• 1978 Hutcheson Shoe Company acquired
• 1981 Wal-Mart makes its next acquisition with 92
  Kuhn's Big K stores.
• 1983 U.S. Woolco Stores acquired.
• 1990 Wal-Mart becomes nation's No. 1
  retailer.1990McLane Company of Temple, Texas
  acquired.
• 1997 Wal-Mart replaces Woolworth on the Dow
  Jones Industrial Average.
• 2003 Wal-Mart named by FORTUNE magazine as the
  most admired company in America.

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Product / Services

• wide variety of general merchandise
• 36 departments including family apparel, health
  beauty aids, household needs, electronics, toys,
  fabrics crafts, lawn garden, jewelry and
  shoes
• Pharmacy Department, Tire Lube Express, garden
  center, snack bar or restaurant, Vision Center
  and One-Hour Photo Processing
• Alaska Bush Shopper If you're in Alaska and far
  from a Wal-Mart store, order items and have them
  shipped to you through our Alaska Bush
  Department.

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Stock Split History

• In 1970, Wal-Mart offered 300,000 shares of its
  common stock to the public at a price of 16.50
  per share. Since that time, it has had eleven
  (11) two for one (2/1) stock splits. On a
  purchase of 100 shares at 16.50 per share on ist
  first offering, the number of shares has grown as
  follows

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Stock development
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Economic Impact for Year Ending Jan. 31, 2002
(USA)

• WAL-MART Stores1,636
• Supercenters 1,093
• Neighborhood Markets 31
• Sams Clubs 502
• Distribution Centers 106
• Associates employed in U.S. 1,043,970
• Community involvement 196 million
• Total amount spent with U.S. suppliers 107
  billion
• Totoal federal, state and local taxes paid 1.2
  billion
• Sales taxes collected and remitted 8.5 billion

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Net Sales 2003 (in millions) 244,524
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Mattel

• www.mattel.com

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Robert A. Eckert, Mattel's chairman and chief
executive officer

• Robert A. Eckert is chairman of the board and
  chief executive officer of Mattel, Inc., the
  worldwide leader in the design, manufacture and
  marketing of toys with approximately 5 billion
  in annual sales.
• Eckert joined Mattel in May 2000 from Kraft
  Foods, Inc., the largest U.S.-based packaged food
  company in the world.
• He received a Bachelor of Science degree in
  business administration from the University of
  Arizona in 1976 and an M.B.A. in marketing and
  finance from Northwestern University in 1977.

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• 1945 Mattel is foundet by Ruth and Elliot
  Handler and Harold Matt Matson
• 1959 First Barbie
• 1960 Mattel becomes apublic owned company
• 1974 Mattels enters into in a Consent Decree
  with the Securities and Exchange Comission
• 1986 Mattel acquires Hong-Kong based ARCO
  industries
• 1986 Joint Venture with Bandai
• 1988 Purchase of Corolle S.A. (France)
• 1989 Acquisition of Corgi Toys Ltd.
• 1992 Acquisition of International Games Inc.
• 1994 Acquisistion of Kransco and J.W. Spear
  Sons

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Products/ Partners
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Net Sales in thousands
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Summary

• Case 5

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Summary

• Mattel as a supplier
  of Wal-Mart
• Supply Chain Management
• Benchmark company
• Used cutting edge technology to build IT
  infrastructure that includes all aspects of the
  chain
• First to use Radio Frequency Identification
  (RFID)
• Implemented a collaborative planning,
  forecasting, and replenishment (CPFR) program,
  beginning a Just-In-Time Inventory Program

• Sharing of ideas and data is key to the
  just-in-time practices that are in place within
  Wal-Mart
• Data sharing from a retailers on a global basis
  allows suppliers to reduce their inventory costs,
  resulting in a lowering of overall costs
• Efficiency in supply chain is key for low-price
  leadership, resulting in far lower margins for
  suppliers and retailers
• Wal-Marts system can work well for all
  businesses and has been studied in-depth

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Question 1

• Do you agree that Wal-Mart is the best supply
  chain operator of all time? Why or why not? in
  the workplace?

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Question 1

• Wal-Mart is one of the best supply chain
  operators at the moment
• Using a supply chain management system that is
  progressively against its competitors and they
  dont even stop evolving.
• Pushing the limits of supply chain management,
  searching for and supporting better technology
  that promises to make its IT infrastructure more
  efficient.

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Question 1

• Wal-Mart uses radio frequency identification
  (RFID) microchips that replace bar codes and
  security tags with a combination technology that
  costs less money.
• Wal-Mart shares its data with its suppliers.
• By implementing a collaborative planning,
  forecasting, and replenishment system (CPRF),
  Wal-Mart began a just-in-time delivery program
  that reduced costs for both the retailer and its
  suppliers.

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Question 1

• The system is still not perfected.
• The system still is too expensive for low-budget
  products.
• Signals cant be send over a long distance.
• Metal impedes the funk signals, so Wal-Mart must
  still improve the system.

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Question 2

• What has Mattel learned from Wal-Mart? How well
  are they applying it to their business?

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Mattels knowledge gained from Wal-Mart

• Optimization of the supply chain for Wal-mart by
  utilizing data gained from Wal-marts inventory
  databases
• Maintaining a efficient supply chain so that
  there less excess inventory

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Applications

• Utilize the sales data on a daily basis to tailor
  to the needs of supply and demand
• Pinpoint what product is selling and where so
  Mattel can accommodate to the manufacturing needs
• In doing so, both Wal-Mart and Mattel are
  successful in the way that they both are working
  simultaneously to fulfill the needs of retail
  customers

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Question 3

• What can other businesses learn from the
  experiences of Wal-Mart and Mattel that could
  improve their supply chain performance? Use an
  example to illustrate your answer.

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Question 3

• Important to save time and reduce costs
• Example Hospital
• Usually small margins
• Surgical instruments and products listed in a
  database, which is connected to their supplier
• Everything will be recorded in the database
• Advantage
• Knowledge who has used what
• Knowledge what every department need
• Reduce stock
• Receive only products, that they really need
• Supplier can optimize its production/stock

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Questions?

• Thanks for your attention!