This is case study based on Walmart supply chain management

1. Presented by: Group 6
Faculty In-charge:
Avishesk Majumdar
Avinash Singh
Mainak Ghosh
Nishant Jaiswal
Pratik Ganatra
Ranit Das
Sirsha Basu
Snehasish Mondal
Shubhadeep Bhaumik
Tanmoy Roy

2.  The company’s founder is Sam Walton.
 In 1940, he worked for the famous retailer, J C Penney.
 Walmart is Fortune 500 list no. 1 company and its valuation is $ 482
billion .
 Walmart is the world biggest retailer .
 In USA they have more than 4600 stores and more than 1000
suppliers all-over the world & their major cloths supplier is
Bangladesh.
Company Background

3.  This phenomenal growth of Wal-Mart is attributed to its continued
focus on customer needs and reducing cost through efficient supply
chain management practices.
 In the early 1970s, Wal-Mart became one of the first retailing
companies in the world to centralize its distribution system,
pioneering the retail hub-and-spoke system
Company Background – Contd…

4. EDI saved time and made procurement efficient.
Using the bar code scanners, an analysis of daily, weekly, monthly
sales data helped the store manager determine what products were
selling and at what quantity.
Accordingly, the store manager would place orders in the
manufacturing division.
EDI=Electronic Data Interchange
Using EDI for procurement

5. Using EDI for procurement – Contd…
EDI Competitive Advantage

6. In 1977, Wal-Mart set up a Computer Terminal Network (CTN) to
establish a communication link between its stores and the company
headquarters
Real time business operations
In 1978, Wal-Mart set up its first fully automated distribution center
Wal-Mart placed orders for huge quantities of goods with its
suppliers.
Cost of sales worked out to be 2-3 %(very low from industry average)
Information of product, manufacturer, price was recorded on
computer system
Using IT in Supply Chain Management

7. That information was passed to centralized data warehouse
Using voice based technologies: Enhancing warehouse and logistics
management.
 Wal-Mart could replenish stock at any of its 1525 stores in US within
24 hours.
 Cross-docking: It enabled the company to receive goods and dispatch
them to stores in less than a day.
Using IT in Supply Chain Management – Contd…

8. GPS system in trucks
Any truck can be located
Drivers could activate system by voice and interact with staff.
GPS System

9. Wal-Mart emphasized the need to reduce purchasing costs and offer
the best price to the customer.
The company directly procured from manufacturers, by-passing all
intermediaries.
Wal-Mart spends a significant amount of time meeting vendors and
understanding their cost structure.
By making the process transparent, the retailer can be certain that
the manufacturers are doing their best to cut down costs.
Walmart Procurement

10. 10
 An important feature of Wal-Mart’s logistics infrastructure was
its fast and responsive transportation system.
 The distribution centers were serviced by more than 6100
company owned trucks.
 Wal-Mart believed that it needed drivers who were committed
and dedicated to customer service.
 The company hired only experienced drivers who had driven
more than 300,000 accident-free miles, with no major traffic
violation.
Logistics Management

11. 11
 To make its distribution process more efficient, Wal-Mart also
made use of a logistics technique called “cross-docking.”
 In this system, the finished goods were directly picked up from
the manufacturing plant, sorted out and then directly supplied to
the customers.
Logistics Management – Contd…

12. SAM WALTON introduced the concept of Every Day Low Pricing.
It promised customers wide variety of high quality branded as well as
unbranded products at lowest possible price, offering value for their
money.
Walmart advertisement describing EDLP said, "Because you work hard
for every dollar , you deserve the lowest price we can offer every time
you make a purchase. You deserve our Every Day Low Price”
EDLP Strategies

14. Walmart invited its major suppliers to co-developed profitable
supply chain partnership, these partnership are intended to
amplify product flow efficiency .
Walmart relationship with P&G did not began well ,Walmart saw
P&G as one of his bad suppliers because P&G’s organization and
processes were far to complex and lacked efficiency.
P&G focused on day-to-day results, a long term strategic plan was
not their main focus
Developing partnership with suppliers

15. The relationship changed with the process of enabling inter-
operability between the company’s systems at transactional,
operational and strategic levels.
But after 1988 the relationship developed tremendous value to
both the companies.
Wal-Mart and P&G also incorporated several other inter company
innovations such as vendor managed inventory & category
inventory.
Developing partnership with suppliers – Contd…

16.  Walmart embarked on strategic sourcing to find products at the best
price from suppliers who are in a position to ensure they can meet
demand.
 The company then establishes strategic partnerships with most of their
vendors, offering them the potential for long-term and high volume
purchases in exchange for the lowest possible prices.
 Walmart streamlined supply chain management by constructing
communication and relationship networks with suppliers.
Selection of Vendors

17. Walmart is able to move goods to-and-from distribution centers
because they maintain a private fleet of trucks and a skilled staff
of truck drivers.
Every year they drive 700 million miles to make millions of
deliveries to the stores. Each driver averages around 100,000
miles annually - that's like driving around the world 4 times!
Drivers follow the most efficient routes to their destinations. This
way they use less fuel & maximize the merchandise delivery.
Walmart has 150+ distribution centers & Walmart’s
transportation has a fleet of 6,100 tractors, 61,000 trailers and
more than 7,800 drivers.
Distribution of Traffic and Fleet