PRESENTATION ONPRESENTATION ONCASE STUDYCASE STUDY

WAL–MART’S SUPPLY CHAIN WAL–MART’S SUPPLY CHAIN MANAGEMENT PRACTICESMANAGEMENT PRACTICES

Presented ByPresented By

Priyanka BhardwajPriyanka Bhardwaj

Lovisha SharmaLovisha Sharma

Anil TiwariAnil Tiwari

Sandeep YadavSandeep Yadav

SAM WALTON

COMPANY’S FOUNDER

• World largest retailing company .World largest retailing company .

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

• Approx. 1,170 stores across the world.Approx. 1,170 stores across the world.

• Employee strength approx. 1.28 million.Employee strength approx. 1.28 million.

• Revenue of $378.799 million(2008).Revenue of $378.799 million(2008).

WAL-MART has been able to achieve WAL-MART has been able to achieve respectable leadership in the retail respectable leadership in the retail

industry because of its focus on supply industry because of its focus on supply chain management. Discuss in detail chain management. Discuss in detail

the distribution & logistic system the distribution & logistic system adopted by Wal-Mart.. adopted by Wal-Mart..

DISTRIBUTION SYSTEMDISTRIBUTION SYSTEM

• Procured goods directly from manufacturers.Procured goods directly from manufacturers.

• Establish long –term relationship with Establish long –term relationship with vendors.vendors.

• Barcode Technology.Barcode Technology.

• Hand-Held computer system. Hand-Held computer system.

LOGISTICS MANAGEMENTLOGISTICS MANAGEMENT

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

• Hired only experienced drivers.Hired only experienced drivers.

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

• Private Fleet Driver Handbook.Private Fleet Driver Handbook.

• Cross- DockingCross- Docking

Information technologies benefit Information technologies benefit in Inventory managementin Inventory management

Contd…Contd…•Centralized Inventory data system.Centralized Inventory data system.

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

•Internet enabled technologies.Internet enabled technologies.

Information technologies benefit Information technologies benefit in logistic managementin logistic management

•Accelerated Delivery system Accelerated Delivery system Various technologies made supply chain more convenient Various technologies made supply chain more convenient Irrespective of geographical area Irrespective of geographical area

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

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

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• Q3- What were the supply chain Q3- What were the supply chain management process adopted by management process adopted by Wal-Mart and how far were they Wal-Mart and how far were they effective?Dicuss.effective?Dicuss.

• 1- Procurement and Distribution.1- Procurement and Distribution.– Procured Directly from manufacturers.Procured Directly from manufacturers.– Generally, preferred local and regional Generally, preferred local and regional

vendor and suppliers.vendor and suppliers.– Use of barcode technology and hand held Use of barcode technology and hand held

computer system.computer system.

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

closely.closely.– Help to satisfy customer need quickly.Help to satisfy customer need quickly.

2-Logistic Management2-Logistic Management• Use more than 3,500 trucks for Use more than 3,500 trucks for

transportation.transportation.

• Hire only experienced driver.Hire only experienced driver.

• Transfer from supply chain to demand Transfer from supply chain to demand chain.chain.

• Use five type of cross docking.Use five type of cross docking.

How it is effective?How it is effective?

• Goods picked directly from manufacturer.Goods picked directly from manufacturer.

• Reduce the handling and storage Reduce the handling and storage charges.charges.

3-Inventory Management3-Inventory Management• Use of IT and Communication system.Use of IT and Communication system.

• Setup own satellite communication.Setup own satellite communication.

• Collaboration with P&G.Collaboration with P&G.

• Use of algorithm system and bar-coding Use of algorithm system and bar-coding system.system.

• Tie-up with Atlas Commerce.Tie-up with Atlas Commerce.

How it is effective?How it is effective?

• Help to communicate with stores.Help to communicate with stores.

• Help to reduce unproductive inventory.Help to reduce unproductive inventory.

• Help in Distribution of needed product.Help in Distribution of needed product.

• Help in accurate distribution of goods.Help in accurate distribution of goods.

Q4: What was the nature of Q4: What was the nature of benefits derived by Wal-mart benefits derived by Wal-mart from the efficient supply from the efficient supply chain management practices chain management practices and how far it has and how far it has contributed to its sustainable contributed to its sustainable competitive advantage? competitive advantage? Explain.Explain.

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

Reduction in lead time (within 48 Reduction in lead time (within 48 hours)hours)

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

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

Continue…..Continue…..• Accurate forecasting of inventory Accurate forecasting of inventory

levelslevels

• Increased warehouse spaceIncreased warehouse space

• Reduction in safety stockReduction in safety stock

• Better working capital utilizationBetter working capital utilization

• Elimination of old stocks and Elimination of old stocks and maintained quality of goodsmaintained quality of goods

Thank youThank you