Wal-Mart

QURAT UL AIN MALIK 21536

SABIR WAHAB 20603
 INTRODUCTION

 Walmart, an American multinational retail corporation that

runs chains of large department and warehouse stores
 Established 1962, Arkansan-USA
 Sam Walton- Founder & Mike duke- current CEO
 Successful due to its IT usage in SCM
 Wal-Mart  known for innovative business practices
 One of the first retailing companies to centralize distribution
system.
 Always among the front runners in employing IT to manage
its supply chain processes.
INTRODUCED EDI FOR
PROCUREMENT
 Using EDI for procurement
 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

AUTOMATED OPERATIONS

 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
 That information was passed to centralized data warehouse
 Analysis of daily, weekly, monthly sales data helped store
manager to determine which products were sold in which
quantities
 So that they can place purchase order
 Edi also helped suppliers
 Right merchandize at the right time, and have it at right
place at right price
 WAREHOUSING

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
 It enabled the company to receive goods and dispatch them
to stores in less than a day
 It installed voice based order filling(VOF) system in all
distribution centers
 Is consisted portable Voice Recognition Talkman
Terminals(VRTT) and radio module on company’s wireless
LAN
 It eliminated mis-picks and product labeling costs since
VOF didn’t require paper lists labor
 GPS
 GPS system in communication in trucks
 Any truck can be located
 Drivers could activate system by voice and interact with
staff
 INVENTORY
MANAGEMENT
The Retail Link system- Supporting Inventory Management
 Retail link connected EDI network to extranet ,accessible to
all suppliers
 Provided suppliers historical sales data of 24 months,
allowed them to track invoice, can make demand forecast
 Suppliers could also study competitors products demand
 FORECASTING

 CPFR (Collaborative Planning Forecasting

Replenishment)
 Real time bases to determine product wise demand forecast
 Wal-Mart shared past data, customer data, demographic
data, stock positions
 Both forecasted demand individually and then co-operated
 Reduced inventory cost
 Product availability across supply chain
 As a result lead time was cut to 11 days from 21 days
 On-hand inventory was reduced by two weeks
 Sales grew by $8.5 millions in six months
 Later on it was implemented to other stores
 INITIATIVES

 2001- Global Procurement Division[Shenzhen, China

 Exchange of sales and inventory data
 Best deal procurement from any part of world
 Strategy Employed
 Identify generic products
 Enhance product quality
 reduce cost by collaborating
 2001- copy paper – increased sales
[ 46% in UK, 94% in Federal Republic of Germany, 38% in Canada,
25% in US]
 October 2002- Asked suppliers to replace VAN-EDI to Web based EDI
 Direct online communication between trading partners
 No transaction costs
 Highly secured
 Saved millions[ VAN-EDI cost $200 Billion]
 No licensing fees
 July 2003 – Asked suppliers to place RFID tags on goods, packed in
pallets and crates

VAN-EDI = Value Added Network-EDI

RFID = Radio Frequency Identification

 BENEFITS

 Drastic decrease in Stock out situations

 From $400 million to $1.2 billion for P&G
 Lesser labor requirements
 Almost $6.34 billion yearly
 Decrease in merchandise thefts
 Almost $2 billion
 Real time tracking of consumption patterns
 Would help enhance JIT Inventory management system
 Decrease in stock levels by around 25%[IBM]
 Total savings expected to be 8.34 billion per year