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SUPPLY CHAIN
MANAGEMENT AT WALMART
Save money. Live Better
By Syndicate Group 9
Company Profile
Type Discount Department Store/Public
Founded Rogers, Arkansas, USA (1962)
Head Quarters Bentonville, Arkansas USA
General Key People Sa Walton (1918-1992), Founder, H. Lee Scott, CEO, S. Robson
Information Walton, Chairman, Tom Schowe, CFO
Industry Retail
Products Discount Stores, Grocery Stores, and Hypermarkets
Website www.walmart.com
Revenue USD 351.1 Bn (2007)
Valuations Industry Value USD 11.3 Bn (2007)
Products Value USD 1.9 Mn (2007)
Wal-Mart Retail Link Database
Shipping to Distribution Centers or Factory Pick-Up
Distribution
Store Centers
Network
(Logistics)

Sales Data at Data

Retail Link Supplier
Store Level Transmission Merchandise
Database Network
Production
(Collected from via Global
(Located in Accesses real-
cash registers in Satellite by Suppliers
Bentonville, AR) time sales data
all stores) Network

External Data Wal-Mart

Internal Analysis
(Weather
forecast, Work to forecast
Economic demand, work
forecast, etc.) with suppliers
Dilemma

How to ensure Wal-Mart’s

Supply Chain remained a
key competitive advantage
and to ascertain Wal-
Mart’s position as the
largest retail company
ahead their competitors?
Supply Chain Ecosystem

Supply Chain: the sequence of

organizations-their facilities, functions,
and activities- that are involved in
producing and delivering a product or
service.
Sometimes referred to as value chains.
SUPPLY CHAIN
MANAGEMENT
Wal-Mart Supply Chain Flow
SCM Benefits and Strategy Wal-Mart
Benefit Strategy

• Lower inventories • “Everyday Low Price” (EDLP)

• Higher productivity • Effective use of logistics management
• Greater agility • Effective inventory control
• Shorter lead times • Bargaining power over suppliers
• Higher profits • Global expansion for new market
• Greater customer loyalty opportunity

Wal-Mart Ways to Manage Supply Chain

Procurement and Distribution;
Logistics Management; and
Inventory Management.
Procurement and Distribution
Bull Whip Effect Vendor Managed Inventory

Occurs when slight demand variability is The step towards supply chain collaboration.
magnified as information moves back upstream. Increased speed, reduced errors, and improved
services.
Flow-Time Analysis: Wal-Mart

Data is
Orders are Merchandise is The store will
Customer Point-of-sale transmitted to Merchandise is
generated from loaded onto restock the
made a system captures warehouse for delivered to the
previous-day trucks using shelves with
purchase data in real-time Inv. store
sales cross-docking merchandise
Management

Retail Link Merchandise is Merchandise is

transmits data manufactured shipped to
to suppliers based on warehouses
historical and
real-time data
Logistics Management
Cross Docking Hub and Spoke

It means to take a finished good from the Used where materials are brought in to one
manufacturing plant and deliver it directly to central location and then sorted for delivery to a
the customer with little or no handling in the variety of destination.
process.
Inventory Management
• The primary purpose to buffer against
any uncertainty that might exist in the
supply chain. Since holding of
inventories can cost anywhere between
20 to 40% of their value, their efficient
management is critical in supply chain
operations.
• These strategies include deployment
strategies (push vs pull), control policies
(the determinant of the optimal levels of
order quantity and reorder points), and
setting safety stock levels at each
stocking location.
Supply Chain Improvement
Remix Radio Freq. Identification (RFID) Tags

Reduce the percentage of out-of-stock Automated data collection based on an

merchandise at stores by redesigning its electronics tags or transponder, not a barcode.
network of distribution centers.
Why Technology is Important
• Information links all aspects of • Increase productivity
supply chain. That is why,
information considered as critical • Reduction of paperwork
element in supply chain • Lead time and inventory reduction
management.
• Facilitation of just-in-time system
• E-business, replacing physical
• Electronic transfer of funds
business process with electronic
ones. • Improved control of operations
• Electronic Data Interchange • Reduction in clerical labor
(EDI), a computer-to-computer • Increase accuracy on the data
exchange of business documents
Recommendation
Maintain competitive prices
One of the key success is maintaining lower
prices, because they already have superiority in
the size of company. Wal-Mart is a global
company, so they do not have to worry about
finding supplier. That is why, they have the
bargaining power over supplier to get as low
prices as possible.
Maintain the quantity of merchandise
As the largest retail store, Wal-Mart able to
purchase the largest quantity of merchandise. It
means that they have competitive advantages
from cost efficiency related to logistics. They
can buy in such a large quantity, using bigger
trucks, but less fuel to go back and forth.
Buying in larger quantity also provide an
opportunity to get the biggest discount from
the suppliers.
THANK YOU