INTRODUCTIONThe company was founded by Sam Walton in 1962,Wal-Mart has 8,500 stores in 15 countries, under 55 different names.The main strength of this company is logistics & supply chain management.Wal-Mart focus on improving sales & innovative technologies, constantly reducing cost.Wal-Mart operated more than 3500 discount stores.Competitor of this company are: Carrefour ,Ahold, Metro AG .
BACKGROUNDWalton was born in 19181940-set up own store1969-80s-expanded business1984-640 Wal-Mart stores1992-Joint venture with Cifra1997-largest volume discount retailer2002-largest company in terms of revenues
PROCUREMENT AND DISTRIBUTIONThe main emphasis of Wal-Mart was to reduce its purchasing cost and to offer the best prices to all its customers.The goods available at Wal-Mart were really low which the customers were sure that they would not get at any other store.Goods were directly procured from manufacturer, passing all the intermediariesBig manufacturers like proctor and gamble were also spared. The manufacturing process of it was made transparent so that manufactured had any way to grab extra price.
CONTINUED….• Wal-Mart had approx. 40 distribution centers located in different geographical locations.• About 85% were available at the stores and those were passed through distribution centers Automotive and drug products were directly available to the stores.• Sophisticated barcode technology and hand held computer system were easier and more economical.• The handled computers the packaging department to get accurate information .
LOGISTICS MANAGEMENTFast responsive transportation systemMore than 3500 company owned trucksCompany hired highly experienced drivers only
TRANSPORTATION.REPORTING DISTRIBUTION CENTRES LOADED TRUCKS RETAIL STORES REPORTING UNLOADING AT TWO HOURS GAP
LOGISTICS TECHNIQUESCross docking:- MANUFACTURING f PLANT CONSUMER
INVENTORY MANAGEMENTAn accelerated delivery system by which stores located within a certain distance of a geographical center could receive replenishment within a day.Wal-Mart invested heavily in IT and communications systems to effectively track sales and merchandise inventories in stores across the countryWal-Mart set up its own satellite communication system in 1983.Reduce unproductive inventory by allowing stores to manage their own stocks, reducing pack sizes across many product categories, and timely price markdowns
WALTON SAID……Walton said, “I can walk in the satellite room, where ourtechnicians sit in front of the computer screens talking onthe phone to any stores that might be having a problem withthe system, and just looking over their shoulders for aminute or two will tell me a lot about how a particular day isgoing. On the screen, I can see the total of the day’s bankcredit sales adding up as they occur. If we have somethingreally important or urgent to communicate to the stores anddistribution centers, I, or any other Wal-Mart executive canwalk back to our TV studio and get on that satellitetransmission and get it right out there. I can also go everySaturday morning around three, look over these printoutsand know precisely what kind of work we have had."
WALMART AND P&GAutomated Reordering System:- LOW STOCK ITEM SIGNAL TO P&G RESUPPLY ORDER DISTRIBUTION WALMART NEAREST P & G CENTRE STORES FACTORY
CONTINUEDThe ‘Magic Wand’Point-of-Sales (POS) systemCentralized inventory data systemIn 1991, Wal-Mart had invested approximately $4 billion to build a retail link systemused Massively Parallel Processor (MPP)
BENEFITS REAPEDLow transportation costPriced its goods economically and the prices varied from day 2 dayOffer higher discountsFaster inventory turnoverAccurate forecasting of inventory levels
CONTINUED…Increased warehouse spaceEstimated old stocks and maintained quality of goodsBar coding and radio frequency technologiesCross docking-to reduce inventory costCut down labour cost and other handling cost involved in loading and unloading
STRENGTHLoyal customersGreat pricingGood locationsGood benefits for full time employeesWal-Mart appeals to mostly middle and lower economic clienteleWal-mart competitive strength is their remarkable logistics system.
CONTINUED.......Walmart believed the logo of EDLP.20% prices is lower than other stores.Walmart not only targeted rural areas but it also started in dealing with urban areas.Technology of Walmart is very appreciable that it is able to invest in to improve their company.