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WalMart and Mattel: Supply Chain Management Best Practices

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Title: WalMart and Mattel: Supply Chain Management Best Practices


1
Wal-Mart and Mattel Supply Chain Management Best
Practices
  • Chapter 6 Case 5
  • Page 216

2
Team Members
  • Elisabeth Cates
  • Yvonne Hildebrand
  • Jesse Janis
  • Mary Napier
  • Nina Wolf
  • Eric Young

3
Walmart
  • www.walmart.com

4
CEO John B. Menzer
  • Executive Vice President and President and Chief
    Executive Officer, Wal-Mart International
    Division since 1999
  • 1995 1999 Executive Vice President and Chief
    Financial Officer for Wal-Mart Stores, Inc.
  • 1999 CFO Excellence Award from CFO Magazine
  • Prior to joining Wal-Mart, he was President of
    Ben Franklin Retail Stores, Inc

5
History - Founder
  • Sam Walton in 1962
  • On this picture in 1984 he does the hula at high
    noon on Wall Street, making good on promise to
    associates after company achieves pre-tax profit
    of 8 percent in 1983.

6
History some important dates
  • 1962 Company founded with opening of first
    Wal-Mart in Rogers, Ark.
  • 1967 Wal-Mart's 24 stores total 12.6 million in
    sales.
  • 1970 Wal-Mart opens first distribution center
    and home office in Bentonville, Ark.
  • 1977 Wal-Mart makes first acquisition, 16
    Mohr-Value stores in Michigan and Illinois.
  • 1978 Hutcheson Shoe Company acquired
  • 1981 Wal-Mart makes its next acquisition with 92
    Kuhn's Big K stores.
  • 1983 U.S. Woolco Stores acquired.
  • 1990 Wal-Mart becomes nation's No. 1
    retailer.1990McLane Company of Temple, Texas
    acquired.
  • 1997 Wal-Mart replaces Woolworth on the Dow
    Jones Industrial Average.
  • 2003 Wal-Mart named by FORTUNE magazine as the
    most admired company in America.

7
Product / Services
  • wide variety of general merchandise
  • 36 departments including family apparel, health
    beauty aids, household needs, electronics, toys,
    fabrics crafts, lawn garden, jewelry and
    shoes
  • Pharmacy Department, Tire Lube Express, garden
    center, snack bar or restaurant, Vision Center
    and One-Hour Photo Processing
  • Alaska Bush Shopper If you're in Alaska and far
    from a Wal-Mart store, order items and have them
    shipped to you through our Alaska Bush
    Department.

8
Stock Split History
  • In 1970, Wal-Mart offered 300,000 shares of its
    common stock to the public at a price of 16.50
    per share. Since that time, it has had eleven
    (11) two for one (2/1) stock splits. On a
    purchase of 100 shares at 16.50 per share on ist
    first offering, the number of shares has grown as
    follows

9
Stock development
10
Economic Impact for Year Ending Jan. 31, 2002
(USA)
  • WAL-MART Stores1,636
  • Supercenters 1,093
  • Neighborhood Markets 31
  • Sams Clubs 502
  • Distribution Centers 106
  • Associates employed in U.S. 1,043,970
  • Community involvement 196 million
  • Total amount spent with U.S. suppliers 107
    billion
  • Totoal federal, state and local taxes paid 1.2
    billion
  • Sales taxes collected and remitted 8.5 billion

11
Net Sales 2003 (in millions) 244,524
12
Mattel
  • www.mattel.com

13
Robert A. Eckert, Mattel's chairman and chief
executive officer
  • Robert A. Eckert is chairman of the board and
    chief executive officer of Mattel, Inc., the
    worldwide leader in the design, manufacture and
    marketing of toys with approximately 5 billion
    in annual sales.
  • Eckert joined Mattel in May 2000 from Kraft
    Foods, Inc., the largest U.S.-based packaged food
    company in the world.
  • He received a Bachelor of Science degree in
    business administration from the University of
    Arizona in 1976 and an M.B.A. in marketing and
    finance from Northwestern University in 1977.

14
  • 1945 Mattel is foundet by Ruth and Elliot
    Handler and Harold Matt Matson
  • 1959 First Barbie
  • 1960 Mattel becomes apublic owned company
  • 1974 Mattels enters into in a Consent Decree
    with the Securities and Exchange Comission
  • 1986 Mattel acquires Hong-Kong based ARCO
    industries
  • 1986 Joint Venture with Bandai
  • 1988 Purchase of Corolle S.A. (France)
  • 1989 Acquisition of Corgi Toys Ltd.
  • 1992 Acquisition of International Games Inc.
  • 1994 Acquisistion of Kransco and J.W. Spear
    Sons

15
Products/ Partners
16
Net Sales in thousands
17
Summary
  • Case 5

18
Summary
  • Mattel as a supplier
    of Wal-Mart
  • Supply Chain Management
  • Benchmark company
  • Used cutting edge technology to build IT
    infrastructure that includes all aspects of the
    chain
  • First to use Radio Frequency Identification
    (RFID)
  • Implemented a collaborative planning,
    forecasting, and replenishment (CPFR) program,
    beginning a Just-In-Time Inventory Program
  • Sharing of ideas and data is key to the
    just-in-time practices that are in place within
    Wal-Mart
  • Data sharing from a retailers on a global basis
    allows suppliers to reduce their inventory costs,
    resulting in a lowering of overall costs
  • Efficiency in supply chain is key for low-price
    leadership, resulting in far lower margins for
    suppliers and retailers
  • Wal-Marts system can work well for all
    businesses and has been studied in-depth

19
Question 1
  • Do you agree that Wal-Mart is the best supply
    chain operator of all time? Why or why not? in
    the workplace?

20
Question 1
  • Wal-Mart is one of the best supply chain
    operators at the moment
  • Using a supply chain management system that is
    progressively against its competitors and they
    dont even stop evolving.
  • Pushing the limits of supply chain management,
    searching for and supporting better technology
    that promises to make its IT infrastructure more
    efficient.

21
Question 1
  • Wal-Mart uses radio frequency identification
    (RFID) microchips that replace bar codes and
    security tags with a combination technology that
    costs less money.
  • Wal-Mart shares its data with its suppliers.
  • By implementing a collaborative planning,
    forecasting, and replenishment system (CPRF),
    Wal-Mart began a just-in-time delivery program
    that reduced costs for both the retailer and its
    suppliers.

22
Question 1
  • The system is still not perfected.
  • The system still is too expensive for low-budget
    products.
  • Signals cant be send over a long distance.
  • Metal impedes the funk signals, so Wal-Mart must
    still improve the system.

23
Question 2
  • What has Mattel learned from Wal-Mart? How well
    are they applying it to their business?

24
Mattels knowledge gained from Wal-Mart
  • Optimization of the supply chain for Wal-mart by
    utilizing data gained from Wal-marts inventory
    databases
  • Maintaining a efficient supply chain so that
    there less excess inventory

25
Applications
  • Utilize the sales data on a daily basis to tailor
    to the needs of supply and demand
  • Pinpoint what product is selling and where so
    Mattel can accommodate to the manufacturing needs
  • In doing so, both Wal-Mart and Mattel are
    successful in the way that they both are working
    simultaneously to fulfill the needs of retail
    customers

26
Question 3
  • What can other businesses learn from the
    experiences of Wal-Mart and Mattel that could
    improve their supply chain performance? Use an
    example to illustrate your answer.

27
Question 3
  • Important to save time and reduce costs
  • Example Hospital
  • Usually small margins
  • Surgical instruments and products listed in a
    database, which is connected to their supplier
  • Everything will be recorded in the database
  • Advantage
  • Knowledge who has used what
  • Knowledge what every department need
  • Reduce stock
  • Receive only products, that they really need
  • Supplier can optimize its production/stock

28
Questions?
  • Thanks for your attention!
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