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WalMart Stores, Inc

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Wal-Mart's legendary supply chain technology has allowed them to break the three ... supply chain management system included reduction in lead time, faster inventory ... – PowerPoint PPT presentation

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Title: WalMart Stores, Inc


1
Wal-Mart Stores, Inc
  • Presented by Juan Mejia
  • MGS 3040, 04
  • Successful Usage of Supply Chain Management

2
Wal-Mart Background
  • Wal-Mart stores, INC was a company founded to
    hold high spots in profits
  • Wal-Marts legendary supply chain technology has
    allowed them to break the three-day barrier that
    some economists in the eighties felt was largely
    unbreakable
  • Wal-Mart into a successful company with great
    average return due to the investment in
    information technology
  • Big issue of How to sustain the companys
    phenomenal performance
  • Now, Wal-Mart ranked the first in the global
    Fortune 500 list in the financial year with
    revenues of over 219.81 billions
  • Wal-Mart has been able to achieve a leadership
    status in the retail industry because of its
    efficient supply chain management

3
STRUGGLES TO SUCCESS
  • The idea of discounts stores emerged in the
    United States in the mid-1950s.
  • This idea was introduce at the right time since
    consumers were better informed after the World
    War II.
  • Wal-Mart has been the only discounter store that
    remained open since 1962 out of the many stores
    functioning at the time.

4
STRUGGLES TO SUCCESS
  • Value of the dollar and his obsession to keep the
    prices below everybody else
  • Wal-Mart being was considered a highly
    competitive company.
  • The tremendous diversity between the original
    strategy followed by the founder Mr. Walton and
    the one followed by Mr. Glass and Mr. Soderquist
    due to the challenges and the enormous company
    growth in the market

5
Wal-Mart Business Model
Wal-Mart is better able to order inventory on
demand, the company is in a better position to
meet customer demand
6
Inventory Management
  • Wal-Mart always emphasized in the need to reduce
    its purchasing cost and offer the best price to
    its customers. The Company procured goods
    directly from manufacturers, bypassing all
    intermediaries
  • Wal-Mart invested in IT and communications
    systems to effectively track sales and
    merchandise inventory in stores across the
    country
  • Wal-Mart reduce unproductive inventory by
    allowing stores to manage their own stocks,
    reducing pack sizes across many products, based
    upon consumer wants
  • Wal-Marts superior supply chain technology
    allows the company to better avoid carrying an
    oversupply of fad items
  • Wal-Mart is often able to replenish items on the
    Wal-Mart shelf in less than three days not from
    the central warehouse to the shelf, but from the
    manufacturer to the shelf
  • Wal-Mart is able to maintain lower levels of
    inventory and still meet customer demand
  • Lower inventory levels result in either a reduced
    floor plan with lower carrying costs and lower
    interest expense or a greater diversity of
    products on the store shelves
  • Wal-Mart also made use of bar coding and radio
    frequency technology to manage its inventories,
    directing the goods to the appropriate dock

7
Logistic Management
  • Wal-Mart logistics infrastructure was its fast
    and responsive transportation system
  • Wal-Mart maintained a strict vigil over its
    drivers by keeping record on their activities
    through the Private Fleet Driver Handbook
  • The distribution centers serviced more than 3,500
    company owned trucks
  • Wal-Mart used Cross-docking in order to improved
    their logistics technique. In this system, the
    finished goods were directly picked up from the
    manufacturing plant of a supplier, sorted out and
    then directly supplied to customers
  • Handling and storage of finished goods, virtually
    eliminating the role of the distribution centers
    and stores

8
The Benefits Reaped
  • Wal-Mart strongly believed and constantly
    emphasized on strengthening its relationships
    with its customers, suppliers and employees.
  • The Company was very vigilant and sensed the
    smallest of changes in store layouts and
    merchandising techniques to improve performance
    and value for customers
  • Wal-Mart also enjoyed the benefits of low
    transportation cost since it hard its own
    transportation system which assisted stores in
    delivering the goods to different locations
    within 48 hours
  • Wal-Mart priced its good economically and the
    prices varied from day to day in order to beat
    competitors. This enabled it to price products
    competitively and pass on the benefits to the
    consumers
  • The benefits of an efficient supply chain
    management system included reduction in lead
    time, faster inventory turnover, accurate
    forecasting of inventory levels, increased
    warehouse space, reduction in safety stock and
    better working capital utilization.

9
THE END
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