Walmart is a large multinational retail corporation founded in 1962 in Arkansas. It operates stores worldwide and has over 2 million employees. Walmart pioneered strategies like just-in-time inventory and data-driven merchandising that helped drive down prices. However, its expansion into Germany in the late 1990s met with difficulties due to cultural and management differences from its American operations. Walmart ultimately exited Germany in 2006 after failing to adequately adapt to the local market.
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Introduction to Wal-Mart
An American public corporation that runs a chain of large discount department stores & warehouse stores.
World's largest public corporation by revenue.
Largest private employer in the world.
Fourth largest utility or commercial employer.
Largest grocery retailer in the United States.
Largest toy seller in the United States.
World’s biggest retailer.
Introduction to Wal-Mart
An American public corporation that runs a chain of large discount department stores & warehouse stores.
World's largest public corporation by revenue.
Largest private employer in the world.
Fourth largest utility or commercial employer.
Largest grocery retailer in the United States.
Largest toy seller in the United States.
World’s biggest retailer.
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2003, ICFAI Center for Management Research. All rights reserved. No part of this publication may be reproduced, stored in a
retrieval system, used in a spreadsheet, or transmitted in any form or by any means – electronic or mechanical, without
permission.
To order copies, call 0091-40-2343-0462/63/64 or write to ICFAI Center for Management Research, Plot # 49, Nagarjuna
Hills, Hyderabad 500 082, India or email [email protected] Website: www.icmrindia.org
This case was written by P. Mohan Chandran, under the direction of Vivek Gupta, ICFAI Center for Management
Research (ICMR). It is intended to be used as a basis for class discussion rather than to illustrate either effective or
ineffective handling of a management situation.
The case was compiled from published sources.
WAL-MART'S SUPPLY CHAIN
MANAGEMENT PRACTICES
OPER - 020
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This case was written by P. Mohan Chandran, under the direction of Vivek Gupta, ICFAI Center for Management
Research (ICMR).
2003, ICFAI Center for Management Research. All rights reserved. No part of this publication may be reproduced, stored in a
retrieval system, used in a spreadsheet, or transmitted in any form or by any means – electronic or mechanical, without
permission.
To order copies, call 0091-40-2343-0462/63/64 or write to ICFAI Center for Management Research, Plot # 49, Nagarjuna
Hills, Hyderabad 500 082, India or email [email protected] Website: www.icmrindia.org
OPER/020
WAL-MART'S SUPPLY CHAIN MANAGEMENT PRACTICES
“When you start to collapse the supply chain, accuracy in execution becomes critical. Any lack of
accurate information and processes creates costly bottlenecks in the flow of goods and materials.”
-- Bruce Richmond, Global head, Andersen Consulting.
INTRODUCTION
The US-based Wal-Mart ranked first in the global Fortune 500 list in the financial year 2001-02
earning revenues of $219.81 billion (Refer Table I). Wal-Mart was the largest retailing company in
the world. The company was much bigger than its competitors in the US – Sears Roebuck, K-
Mart, JC Penney and Nordstrom combined (Refer Exhibit I). In 2002, Wal-Mart operated more
than 3,500 discount stores, Sam’s Clubs and Supercenters in the US and more than 1,170 stores in
all major countries across the world. The company also sold products on the Internet through its
website, walmart.com.
TABLE I
GLOBAL FORTUNE 500 LIST (2002)
Rank Company Revenues (in $ millions)
1 Wal-Mart Stores 219,812.0
2 Exxon Mobil 191,581.0
3 General Motors 177,260.0
4 Ford Motor 162,412.0
5 Enron 138,718.0
Source: www.fortune.com
Wal-Mart was one of the largest private sector employers in the world, with employee strength of
approximately 1.28 million. The company’s founder, Sam Walton (Walton) ha.
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Senior Project and Engineering Leader Jim Smith.pdfJim Smith
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The case study discusses the potential of drone delivery and the challenges that need to be addressed before it becomes widespread.
Key takeaways:
Drone delivery is in its early stages: Amazon's trial in the UK demonstrates the potential for faster deliveries, but it's still limited by regulations and technology.
Regulations are a major hurdle: Safety concerns around drone collisions with airplanes and people have led to restrictions on flight height and location.
Other challenges exist: Who will use drone delivery the most? Is it cost-effective compared to traditional delivery trucks?
Discussion questions:
Managerial challenges: Integrating drones requires planning for new infrastructure, training staff, and navigating regulations. There are also marketing and recruitment considerations specific to this technology.
External forces vary by country: Regulations, consumer acceptance, and infrastructure all differ between countries.
Demographics matter: Younger generations might be more receptive to drone delivery, while older populations might have concerns.
Stakeholders for Amazon: Customers, regulators, aviation authorities, and competitors are all stakeholders. Regulators likely hold the greatest influence as they determine the feasibility of drone delivery.
Artificial intelligence (AI) offers new opportunities to radically reinvent the way we do business. This study explores how CEOs and top decision makers around the world are responding to the transformative potential of AI.
Comparing Stability and Sustainability in Agile SystemsRob Healy
Copy of the presentation given at XP2024 based on a research paper.
In this paper we explain wat overwork is and the physical and mental health risks associated with it.
We then explore how overwork relates to system stability and inventory.
Finally there is a call to action for Team Leads / Scrum Masters / Managers to measure and monitor excess work for individual teams.
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3. History
Founed: 1962 in Arkansas, USA
Founder: Sam Walton
Headquarter: Bentonville, Arkansas, USA
Industry: Retail
Area served: worldwide
Revenue: US $404.16 Billion
Employees: 2,100,000
4. What is
Walmart?
• WALMART IS A MULTINATIONAL RETAIL CORPORATION THAT RUNS A LARGE
NUMBER OF STORES GLOBALLY.
• IF WALMART WERE A COUNTRY, IT WOULD BE THE 26TH LARGEST ECONOMY IN THE
WORLD.
• IF WAL-MART WAS AN ARMY, IT WOULD HAVE THE SECOND LARGEST MILITARY IN
THE WORLD, BEHIND CHINA.
• ONE OF EVERY FOUR DOLLARS AMERICANS SPEND ON GROCERIES IS SPENT AT
WALMART.
• CHINA'S EXPORTS TO WALMART ACCOUNTED FOR 11 PERCENT OF THE GROWTH OF
THE TOTAL U.S. TRADE DEFICIT WITH CHINA BETWEEN 2001 AND 2006.
6. WALMART COMPETITORS WITH OTHER
RETAIL STORES
Target is the main competitor of Walmart , ranked #36 in the
Fortune 500.
Costco Wholesale
The largest wholesale club operator in the US
Carrefour SA :
The second-largest retailer (behind Wal-Mart)
(3rd quarter sale in 2013)
7. LOW TO HIGH
The major reason that Wal-Mart has had
such a abnormal rise is that it offers its
products for consistently lower prices than
its competitors. Its motto is "Always Low
Prices. Always." And it has lived up to that
promise.
8. PROFIT
Wal-Mart has opened more than 3,029 "supercentres'" since 2012
alone.
The CEO of Wal-Mart makes more in a single hour than a full-time
Wal-Mart associate makes in an entire year.
The company owns a fleet of more than 6,500 tractors and 55,000
trailers
9. Walmart’s strength
Wal-Mart is the largest employer and ranked #1 in
fortune 500 .
Wal-Mart had global net sales of $375 billion, over 2.2
million employees, and 60,000 suppliers located in more
than 55 countries.
10. PRICES
The average U.S. family now spends more than $4000 a
year at Wal-Mart
EVEN Two Weeks After Launch, Walmart Drops Price of
the iPhone 5c to $45
12. A Simple But Powerful Idea:
Minimize the “Bad I” - Inventory
Walton figured out that most of the costs gets
added after the product leaves the factory and
moves through the supply chain:
Mfg. Wholesaler Retailer
• 20% - 30% of retail price spent on keeping
inventory in 3 warehouses
• Walton eliminated the wholesaler
• He instituted JIT inventory practices using “real-
time” flow of information from a store’s sales
floors to the supplier’s plants that
dictated:
13. All That Data Is Mined!
- Doing it since 1990
Analysis of its 90 million shopping cart transactions per week
- To see how the purchases of the different items are related.
- Company can then better identify items to market together.
Obvious examples:
- Charcoal and tongs go alongside the barbecue grills
- Tiny baggies next to the pretzel boxes so Mom can pack snacks
for the kids
A not so obvious example!
- Customers who buy Barbie dolls (it sells one every 20 seconds)
have a 60% likelihood of buying one of three types of candy bars
14. Helps to time merchandise deliveries -
Its shelves stay stocked, but NOT overstocked
“Predict what is going to happen,
instead of waiting for it to happen”
Example : Analysis of purchases during Hurricane
Charley indicated products to be stocked in Florida’s
Wal-Mart ahead of Hurricane Frances that hit a few
weeks later
“Not just the usual flash-lights, but, for example,
strawberry Pop-Tarts whose sales rates was 7 times the
normal rate. The Pre-Hurricane top-selling item was beer!
”
Value of the Data Warehouse
- Wal-Mart’s Buyers
15. IT is Critical for Wal-Mart’s
“Everyday Low Price” Strategy
Invested in most of the waves of retail IT systems earlier and
more aggressively than its competitors
- Set industry standards in IT
1969 : Used computers to track store inventory
1980 : Adopted bar codes
1985 : Electronic Data Interchange (EDI) with suppliers
Late 80’s : Wireless scanning guns
2003 : Mandated its 100 largest suppliers to place RFID (Radio Frequency
Identification) tags on the boxes and pallets shipped to Wal-mart
stores by January 2005
Focus of IT Investments:
Applications that directly enhanced its core value proposition – EDLP
– and increase sales through micromerchandising
16. Walton recognized early on that timely information is the key to
maximizing sales and minimizing costs. The better your information
about what’s selling and what’s not, store by store, the better you
can avoid the twin perils of retailing
too little inventory or too much
IT: Only Area Where Wal-Mart Outspent
Competitors
Very Secretive About Its Information Systems
Custom-designed systems built by employees kept competitors
off the trail
Hardware and software vendors bound by non-disclosure
agreements
In 2001, Wal-Mart summarily announced that it would no longer
share sales data with market research vendors like Information
Resources Inc and AC Nielsen, since the reports of the vendors
are available to all retailers who subscribe to that service.
17. Sharing Sales Data With Suppliers
- Key to Low-Price Leadership
Treat Suppliers as Partners, NOT Adversaries
Implemented a Collaborative Planning, Forecasting and
Replenishment (CPFR) Program
JIT Inventory Program Reduced Carrying Costs
- for Both Wal-Mart AND Its Suppliers
Wal-Mart’s Cost of Goods : 5% - 10% Less Than Competitors
“CPFR has blurred the lines between Wal-Mart and the Supplier:
You’re both working to the same end: To sell as much product as
possible without either of us having too much inventory”.
29. Walmart in Germany
Wal-Mart’s entry into German Market was
encouraged by the facts:-
Germany, the third largest national economy
Germany's importance as a basis for
expansion in Europe.
Wal-Mart entered Germany in December 1997
It acquired the 21-hypermarket stores of a food
store chain company Wertkauf in 1997.
30. •In 1998, Wal-Mart acquired Interspar's
(an international retail chain) 74
hypermarket stores to raise the total
number of Wal-Mart stores in Germany
to 95.
•With the acquisition of Interspar's
stores, Wal-Mart became the fourth
largest hypermarket retailer in
Germany.
CONTINUED…..
32. The Death of
Wal-Mart
Poor locations
American-style management practices in the workplace
Poor attention to target market detail
Cultural differences
Lack of Experience with acquisitions and mergers
Merchandising mistakes
Refused to acknowledge the differences in customer
behavior in Germany
Legal barriers