WalMart Stores, Inc

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Wal-Mart Stores, Inc

• Presented by Juan Mejia
• MGS 3040, 04
• Successful Usage of Supply Chain Management

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Wal-Mart Background

• Wal-Mart stores, INC was a company founded to
  hold high spots in profits
• Wal-Marts legendary supply chain technology has
  allowed them to break the three-day barrier that
  some economists in the eighties felt was largely
  unbreakable
• Wal-Mart into a successful company with great
  average return due to the investment in
  information technology
• Big issue of How to sustain the companys
  phenomenal performance
• Now, Wal-Mart ranked the first in the global
  Fortune 500 list in the financial year with
  revenues of over 219.81 billions
• Wal-Mart has been able to achieve a leadership
  status in the retail industry because of its
  efficient supply chain management

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STRUGGLES TO SUCCESS

• The idea of discounts stores emerged in the
  United States in the mid-1950s.
• This idea was introduce at the right time since
  consumers were better informed after the World
  War II.
• Wal-Mart has been the only discounter store that
  remained open since 1962 out of the many stores
  functioning at the time.

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STRUGGLES TO SUCCESS

• Value of the dollar and his obsession to keep the
  prices below everybody else
• Wal-Mart being was considered a highly
  competitive company.
• The tremendous diversity between the original
  strategy followed by the founder Mr. Walton and
  the one followed by Mr. Glass and Mr. Soderquist
  due to the challenges and the enormous company
  growth in the market

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Wal-Mart Business Model
Wal-Mart is better able to order inventory on
demand, the company is in a better position to
meet customer demand
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Inventory Management

• Wal-Mart always emphasized in the need to reduce
  its purchasing cost and offer the best price to
  its customers. The Company procured goods
  directly from manufacturers, bypassing all
  intermediaries
• Wal-Mart invested in IT and communications
  systems to effectively track sales and
  merchandise inventory in stores across the
  country
• Wal-Mart reduce unproductive inventory by
  allowing stores to manage their own stocks,
  reducing pack sizes across many products, based
  upon consumer wants
• Wal-Marts superior supply chain technology
  allows the company to better avoid carrying an
  oversupply of fad items

• Wal-Mart is often able to replenish items on the
  Wal-Mart shelf in less than three days not from
  the central warehouse to the shelf, but from the
  manufacturer to the shelf
• Wal-Mart is able to maintain lower levels of
  inventory and still meet customer demand
• Lower inventory levels result in either a reduced
  floor plan with lower carrying costs and lower
  interest expense or a greater diversity of
  products on the store shelves
• Wal-Mart also made use of bar coding and radio
  frequency technology to manage its inventories,
  directing the goods to the appropriate dock

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Logistic Management

• Wal-Mart logistics infrastructure was its fast
  and responsive transportation system
• Wal-Mart maintained a strict vigil over its
  drivers by keeping record on their activities
  through the Private Fleet Driver Handbook
• The distribution centers serviced more than 3,500
  company owned trucks

• Wal-Mart used Cross-docking in order to improved
  their logistics technique. In this system, the
  finished goods were directly picked up from the
  manufacturing plant of a supplier, sorted out and
  then directly supplied to customers
• Handling and storage of finished goods, virtually
  eliminating the role of the distribution centers
  and stores

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The Benefits Reaped

• Wal-Mart strongly believed and constantly
  emphasized on strengthening its relationships
  with its customers, suppliers and employees.
• The Company was very vigilant and sensed the
  smallest of changes in store layouts and
  merchandising techniques to improve performance
  and value for customers
• Wal-Mart also enjoyed the benefits of low
  transportation cost since it hard its own
  transportation system which assisted stores in
  delivering the goods to different locations
  within 48 hours

• Wal-Mart priced its good economically and the
  prices varied from day to day in order to beat
  competitors. This enabled it to price products
  competitively and pass on the benefits to the
  consumers
• The benefits of an efficient supply chain
  management system included reduction in lead
  time, faster inventory turnover, accurate
  forecasting of inventory levels, increased
  warehouse space, reduction in safety stock and
  better working capital utilization.

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THE END