PRESENTATIONON

WAL–MART’S SUPPLY CHAIN MANAGEMENT PRACTICES

• World largest retailing company .

• Revenues of $219.81 million (2001-02) .

• Approx. 1,170 stores across the world.

• Employee strength approx. 1.28 million.

• Revenue of $378.799 million (2008).

WAL-MART has been able to achieve respectable leadership in the retail industry because of its focus on supply chain management. Discuss in detail the distribution & logistic system adopted by Wal-Mart..

DISTRIBUTION SYSTEM

• Procured goods directly from manufacturers.

• Establish long –term relationship with vendors.

• Barcode Technology.

LOGISTICS MANAGEMENT:-

• Distribution centers were serviced by more than 3500 company owned trucks.

• Hired only experienced drivers.

• Drivers had to report their hours of service to a coordinator daily.

• Private Fleet Driver Handbook. In 2009, Walmart was named Safest Fleet by the American Trucking Association

• Cross- Docking

How IT benefited Wal-Mart’s Inventory &

logistic management

Information technologies benefit in Inventory management:-Satellite communication system.

Expansion of Wal-mart stores in the USWal-mart set up its own SCS in 1983

By using IT capabilities Wal-Mart check & make the availability of customers demand.

Automated Reordering System.Entered into collaboration with P & GMaintaining the inventories in its storesARS as a link b/w P&G and all computers, stores &

distribution channels.

Radio frequency system.Proofs to be magic wandHelps in keeping track of the inventory in

stores

Algorithm system to forecast exact quantities.Centralized inventory data system

Cont…

• Centralized Inventory data system.

• Bar Coding & fixed optical reader for efficient picking, receiving & proper inventory control & for physical counting of inventory.

• Internet enabled technologies.

Information technologies benefit in logistic management:-• Accelerated Delivery system Various technologies made supply chain more convenient Irrespective of geographical area

• Cross –docking Make distribution process more efficient. Finished goods directly supplied to customers from

manufacturing plant. Reduces handling & storage of finished goods. Eliminating the role of distribution centers &stores.

What were the supply chain management process adopted by Wal-Mart and how far were they effective?

Procurement and Distribution.

Procured Directly from manufacturers.Generally, preferred local and regional

vendor and suppliers.Use of barcode technology and hand held

computer system.

How it is effective?Low price to customers.Less cost effective.Help supervisor to monitor their employees

closely.Help to satisfy customer need quickly.

Logistic Management:-

• Use more than 3,500 trucks for transportation.

• Hire only experienced driver.

• Transfer from supply chain to demand chain.

• Use five type of cross docking.

How it is effective?• Goods picked directly

from manufacturer.• Reduce the handling

and storage charges.

Inventory Management• Use of IT and Communication system.• Setup own satellite communication.• Collaboration with P&G.• Use of algorithm system and bar-coding

system.• Tie-up with Atlas Commerce.How it is effective?• Help to communicate with stores.• Help to reduce unproductive inventory.• Help in Distribution of needed product.• Help in accurate distribution of goods.

What was the nature of benefits derived by Wal-mart from the efficient supply chain

management practices and how far it has contributed to its sustainable competitive

advantage?

• Low transportation cost(3% as compared to 5%)

• Reduction in lead time (within 48 hours)

• Wal-Mart can replenish the shelves four times faster than its competitors

• Purchase huge quantities→ Good bargaining power (price variation) →competitive price (higher discounts) →benefit to consumers

Continue…..

• Accurate forecasting of inventory levels

• Increased warehouse space• Reduction in safety stock• Better working capital utilization• Elimination of old stocks and

maintained quality of goods

By making effective use of computers in all its company’s operation, Wal-Mart was successful in providing uninterrupted services to its customers, supplier, stock holders and trading partners.

Conclusion:-

Thank you