Walmart case study

1. PRESENTATION ON
CASE STUDY
WAL–MART’S SUPPLY CHAIN MANAGEMENT
PRACTICES
Presented By
Priyanka Bhardwaj
Lovisha Sharma
Anil Tiwari
Sandeep Yadav

2. SAM WALTON
COMPANY’S FOUNDER

3. • World largest retailing company .
• Revenues of $219.81 million (2001-02) .
• Approx. 1,170 stores across the world.
• Employee strength approx. 1.28 million.
• Revenue of $378.799 million(2008).

4. WAL-MART has been able to achieve
respectable leadership in the retail industry
because of its focus on supply chain
management. Discuss in detail the
distribution & logistic system adopted by Wal-
Mart..

5. DISTRIBUTION SYSTEM
• Procured goods directly from manufacturers.
• Establish long –term relationship with vendors.
• Barcode Technology.
• Hand-Held computer system.

6. LOGISTICS MANAGEMENT
• Distribution centers were serviced by more
than 3500 company owned trucks.
• Hired only experienced drivers.
• Drivers had to report their hours of service
to a coordinator daily.
• Private Fleet Driver Handbook.
• Cross- Docking

7. How IT benefited
Wal-Mart’s
Inventory & logistic
management

8. Information technologies benefit in
Inventory management
 Satellite communication system.
 Expansion of Wal-mart stores in the US
 Wal-mart set up its own SCS in 1983
 By using IT capabilities Wal-Mart check & make the availability
of customers demand.
 Automated Reordering System.
 Entered into collaboration with P & G
 Maintaining the inventories in its stores
 ARS as a link b/w P&G and all computers, stores & distribution
channels
 Radio frequency system.
 Proofs to be magic wand
 Helps in keeping track of the inventory in stores
 Algorithm system to forecast exact quantities.
Centralized inventory data system
.

9. Contd…
•Centralized Inventory data system.
• Bar Coding & fixed optical reader for
efficient picking, receiving & proper
inventory control & for physical counting of
inventory.
•Internet enabled technologies.

10. Information technologies benefit in
logistic management
•Accelerated Delivery system
 Various technologies made supply chain more convenient
 Irrespective of geographical area
•Cross –docking
 Make distribution process more efficient.
 Finished goods directly supplied to customers from manufacturing plant.
 Reduces handling & storage of finished goods.
 Eliminating the role of distribution centers &stores.

11. By making effective use of
computers in all its
company’s operation, Wal-
Mart was successful in
providing uninterrupted
services to its customers,
supplier, stock holders and
trading partners.

13. ???????? ????????
• Q3- What were the supply chain
management process adopted by Wal-
Mart and how far were they
effective?Dicuss.

14. • 1- Procurement and Distribution.
– Procured Directly from manufacturers.
– Generally, preferred local and regional vendor
and suppliers.
– Use of barcode technology and hand held
computer system.
How it is effective?
– Low price to customers.
– Less cost effective.
– Help supervisor to monitor their employees
closely.
– Help to satisfy customer need quickly.

15. 2-Logistic Management
• Use more than 3,500 trucks for transportation.
• Hire only experienced driver.
• Transfer from supply chain to demand chain.
• Use five type of cross docking.
How it is effective?
• Goods picked directly from manufacturer.
• Reduce the handling and storage charges.

16. 3-Inventory Management
• Use of IT and Communication system.
• Setup own satellite communication.
• Collaboration with P&G.
• Use of algorithm system and bar-coding
system.
• Tie-up with Atlas Commerce.
How it is effective?
• Help to communicate with stores.
• Help to reduce unproductive inventory.
• Help in Distribution of needed product.
• Help in accurate distribution of goods.

17. Q4: What was the nature of
benefits derived by Wal-mart
from the efficient supply chain
management practices and how
far it has contributed to its
sustainable competitive
advantage? Explain.

18. Low transportation cost(3% as compared to
5%)
Reduction in lead time (within 48 hours)
Wal-Mart can replenish the shelves four
times faster than its competitors
Purchase huge quantities→ Good bargaining
power (price variation) →competitive price
(higher discounts) →benefit to consumers

19. Continue…..
• Accurate forecasting of inventory levels
• Increased warehouse space
• Reduction in safety stock
• Better working capital utilization
• Elimination of old stocks and maintained
quality of goods

20. Thank you