Walmart's Supply Chain

Description
It explains the different IT tools which it uses to improve its supply chain efficiency which is its competitive advantage.

Supply Chain Management

Case 05

Wal-Mart’s Supply Chain
SCM Case Presentation

Presentation Date: July 20, 2010

1 8416 34,000 2,100,000 42,000,000 408,200,000,000

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Distribution & Logistics System

Distribution & Logistics System PROCUREMENT

DIRECT PROCUREMENT BUYS AT LOWEST PRICE UNDERSTANDING COST STRUCTURE OF VENDOR LONG TERM RELATIONSHIP WITH VENDOR

BUYING FROM MANUFACTURER

DIRECT PROCUREMENT BUYS AT LOWEST PRICE UNDERSTANDING COST STRUCTURE OF VENDOR LONG TERM RELATIONSHIP WITH VENDOR

BYPASS INTERMEDIARIES

BUYING FROM MANUFACTURER

DIRECT PROCUREMENT BUYS AT LOWEST PRICE UNDERSTANDING COST STRUCTURE OF VENDOR LONG TERM RELATIONSHIP WITH VENDOR

ENSURE PRODUCT IS NOT AVAILABLE ELSEWHERE AT EVEN LOWER PRICES

DIRECT PROCUREMENT BUYS AT LOWEST PRICE UNDERSTANDING COST STRUCTURE OF VENDOR LONG TERM RELATIONSHIP WITH VENDOR

ENSURE PRODUCT IS NOT AVAILABLE ELSEWHERE AT EVEN LOWER PRICES

DIRECT PROCUREMENT
TOUGH NEGOTIATORS

BUYS AT LOWEST PRICE UNDERSTANDING COST STRUCTURE OF VENDOR LONG TERM RELATIONSHIP WITH VENDOR

DIRECT PROCUREMENT BUYS AT LOWEST PRICE
MAKING THE PROCESS TRANSPARENT

UNDERSTANDING COST STRUCTURE OF VENDOR LONG TERM RELATIONSHIP WITH VENDOR

DIRECT PROCUREMENT BUYS AT LOWEST PRICE
MAKING THE PROCESS TRANSPARENT

UNDERSTANDING COST STRUCTURE OF VENDOR LONG TERM RELATIONSHIP WITH VENDOR MADE CERTAIN THE MANUFACTURERES
WERE DOING THEIR BEST TO CUT DOWN COSTS

DIRECT PROCUREMENT BUYS AT LOWEST PRICE UNDERSTANDING COST STRUCTURE OF VENDOR LONG TERM RELATIONSHIP WITH VENDOR
PREFERRED LOCAL AND REGIONAL VENDORS AND SUPPLIERS

Distribution & Logistics System

DISTRIBUTION

OWN WAREHOUSES SUPPLIED 85% OF INVENTORY

OWN WAREHOUSES SUPPLIED 85% OF INVENTORY COMPARED TO 50-65% OF COMPETITIORS

PROVIDES REPLENISHMENTS IN 2 DAYS

PROVIDES REPLENISHMENTS IN 2 DAYS

COMPARED TO 5 DAYS FOR COMPETITORS

SHIPPING COSTS ARE 3% OF TOTAL COSTS

SHIPPING COSTS ARE 3% OF TOTAL COSTS COMPARED TO 5% OF COMPETITORS

Distribution & Logistics System

LOGISTICS

FAST AND RESPONSIVE TRANSPORTATION SYSTEM ONLY EXPERIENCED DRIVERS
CROSS DOCKING

FAST AND RESPONSIVE TRANSPORTATION SYSTEM
SHIPS GOODS WITHIN 2 DAYS 3500 COMPANY OWNED TRUCKS REPLENISHES STORE SHELVES TWICE EVERY WEEK

ONLY EXPERIENCED DRIVERS CROSS DOCKING

FAST AND RESPONSIVE TRANSPORTATION SYSTEM MORE THAN 300,000 ACCDENT FREE
MILES

ONLY EXPERIENCED DRIVERS CROSS
MAINTAINED STRICT VIGIL OVER DOCKING DRIVERS

NO MAJOR TRAFFIC VIOLATION

FINISHED GOODS PICKED DIRECTLY FROM MANUFACTURING PLANT OF SUPPLIER ONLY EXPERIENCED DRIVERS SUPPLY CHAIN ? DEMAND CHAIN : PUSH ? PULL

FAST AND RESPONSIVE TRANSPORTATION SYSTEM

CROSS DOCKING
REDUCED HANDLING AND STORAGE OF FINISHED GOODS ELIMINATED ROLE OF DISTRIBUTION CENTERS

IT TOOLS USED AND BENEFITS TO WALMART

BARCODE TECHNOLOGY HANDHELD COMPUTERS COMMUNICATION SYSTEM NETWORKING POS SYSTEM ALGORITHM RETAIL LINK SYSTEM MPP COMPUTER SYSTEM

BARCODE TECHNOLOGY HANDHELD COMPUTERS USED TO LABEL DIFFERERNT PRODUCTS, SHELVES AND BINS COMMUNICATION SYSTEM HAD TO MAKE TWO SCANS – ONE TO NETWORKING OTHER TO IDENTIFY IDENTIFY PALLET LOCATION FROM POS SYSTEM WHICH STOCK WAS PICKED UP ALGORITHM RETAIL LINK SYSTEM MPP COMPUTER SYSTEM

BARCODE TECHNOLOGY HANDHELD COMPUTERS USED TO LABEL DIFFERERNT PRODUCTS, SHELVES AND BINS COMMUNICATION SYSTEM HAD TO MAKE TWO SCANS – ONE TO NETWORKING OTHER TO IDENTIFY IDENTIFY PALLET LOCATION FROM POS SYSTEM WHICH STOCK WAS PICKED UP ALGORITHM EASY ORDER PACKING AND RETAIL PHYSICAL COUNTING OF LINK SYSTEM INVENTORY MPP COMPUTER SYSTEM
ENABLED EFFICIENT PICKING RECEIVING AND PROPER INVENTORY CONTROL OF THE APPROPRIATE GOODS

BARCODE TECHNOLOGY HANDHELD COMPUTERS ACCESS TO REALCOMMUNICATION SYSTEM TIME INFORMATION NETWORKING GUIDED EMPLOYEE TO LOCATION OF POS SYSTEM PRODUCT ALGORITHM UPDATION OF INVENTORY LEVELS RETAIL LINK SYSTEM MPP COMPUTER SYSTEM
ACCURATE PACKING INFORMATION

BARCODE TECHNOLOGY HANDHELD COMPUTERS ACCESS TO REALCOMMUNICATION SYSTEM TIME INFORMATION NETWORKING GUIDED EMPLOYEE TO LOCATION OF POS SYSTEM PRODUCT ALGORITHM UPDATION OF INVENTORY LEVELS RETAIL LINK SYSTEM IMPROVE LEVEL OF EFFICIENCY MPP COMPUTER SYSTEM
SATISFIED CONSUMER NEEDS QUICKLY ACCURATE PACKING INFORMATION

HANDHELD COMPUTERS COMMUNICATION SYSTEM NETWORKING QUICK INFORMATION RELAY POS SYSTEM ALGORITHM VIEW OF THE BIG PICTURE RETAIL LINK SYSTEM MPP COMPUTER SYSTEM

TO FACILITATE ELECTRONIC DATA BARCODE TECHNOLOGY INTERCHANGE

HANDHELD COMPUTERS COMMUNICATION SYSTEM NETWORKING POS AUTOMATED REORERING SYSTEM SYSTEM ALGORITHM IDENTIFIED ITEM LOW IN STOCK & SENT SIGNAL TO SUPPLIER LINK SYSTEM RETAIL MPP COMPUTER SYSTEM

NETWORKED ITS SUPPLIERS THORUGH BARCODE TECHNOLOGY COMPUTERS

HANDHELD COMPUTERS COMMUNICATION SYSTEM AUTOMATED REORERING SYSTEM NETWORKING POS AUTOMATED REORERING SYSTEM SYSTEM ALGORITHM IDENTIFIED ITEM LOW IN STOCK & SENT SIGNAL TO SUPPLIER LINK SYSTEM RETAIL MPP COMPUTER SYSTEM
WIN-WIN SITUATION FOR BOTH WALMART & SUPPLIER MONITOR STOCK LEVELS CONSTANTLY & IDENTIFY FAST MOVING ITEMS

NETWORKED ITS SUPPLIERS THORUGH BARCODE TECHNOLOGY COMPUTERS

BARCODE TECHNOLOGY – HAND HELD POINT OF SALES SYSTEM HANDHELDCOMPUTER LINKED TO INSTORE COMPUTERS TERMINALS COMMUNICATION SYSTEM NETWORKING POS SYSTEM ALGORITHM RETAIL LINK SYSTEM REAL TIME TRACKING OF INVENTORY IN MPP AND BACKUP STORES , DELIVERIESCOMPUTER SYSTEM
MERCHANDISE IN DCs

BARCODE ENABLED FORECAST OF THE EXACT TECHNOLOGY QUANTITIES OF EACH HANDHELD COMPUTERS ITEM TO BE DELIVERED COMMUNICATION SYSTEM NETWORKING POS SYSTEM ALGORITHM RETAIL LINK SYSTEM EVEN BULK ITEMS COULD BE BROKEN MPP THE STORES AND SUPPLIED TO COMPUTER SYSTEM

BARCODE TECHNOLOGY HANDHELD COMPUTERS MORE THAN 10000 RETAIL STORES COMMUNICATION SYSTEM LINKED NETWORKING THE SALES OF THEIR TO MONITOR POS GOODS AT STORES AND REPLENISH SYSTEM INVENTORIES ALGORITHM RETAIL LINK SYSTEM MPP COMPUTER SYSTEM
10 MILLION TRANSACTION PER DAY

BARCODE TECHNOLOGY MASSILVELY PARALLEL PROCESSOR COMPUTER SYSTEM HANDHELD COMPUTERS COMMUNICATION SYSTEM NETWORKING MOVEMENT OF ALL TO TRACK THE GOODS POS SYSTEM AND STOCK LEVELS ALGORITHM RETAIL LINK SYSTEM MPP COMPUTER SYSTEM
ALL INFO PASSED THROUGH ADVANCED SATELLITE COMMUNICATION SYSTEM

NATURE OF BENEFITS DERIVED

STRONG CUSTOMER RELATIONSHIP

SELF DEPENDENCE

STRONG CUSTOMER RELATIONSHIP
LOWEST PRICES

HIGH THROUGHPUT PRODUCTS

PULL STRATEGY HIGHER FREQUENCY OF REPLENISHMENT

STRONG CUSTOMER RELATIONSHIP
LOWEST PRICES

HIGH THROUGHPUT PRODUCTS

PULL STRATEGY HIGHER FREQUENCY OF REPLENISHMENT

STRONG CUSTOMER RELATIONSHIP
LOWEST PRICES

HIGH THROUGHPUT PRODUCTS

PULL STRATEGY HIGHER FREQUENCY OF REPLENISHMENT

STRONG CUSTOMER RELATIONSHIP
LOWEST PRICES

HIGH THROUGHPUT PRODUCTS

PULL STRATEGY HIGHER FREQUENCY OF REPLENISHMENT

LOWER TRANSPORTATION COSTS INCREASED WAREHOUSE SPACE

REDUCTION IN LEAD TIME
ACCURATE FORECASTING

SELF DEPENDENCE
BETTER WORKING CAPITAL UTILIZATION

FASTER INVENTORY TURNOVER
REDUCTION IN SAFETY STOCK

LOWER TRANSPORTATION COSTS INCREASED WAREHOUSE SPACE

REDUCTION IN LEAD TIME
ACCURATE FORECASTING

SELF DEPENDENCE
BETTER WORKING CAPITAL UTILIZATION

FASTER INVENTORY TURNOVER
REDUCTION IN SAFETY STOCK

LOWER TRANSPORTATION COSTS INCREASED WAREHOUSE SPACE

REDUCTION IN LEAD TIME
ACCURATE FORECASTING

SELF DEPENDENCE
BETTER WORKING CAPITAL UTILIZATION

FASTER INVENTORY TURNOVER
REDUCTION IN SAFETY STOCK

LOWER TRANSPORTATION COSTS INCREASED WAREHOUSE SPACE

REDUCTION IN LEAD TIME
ACCURATE FORECASTING

SELF DEPENDENCE
BETTER WORKING CAPITAL UTILIZATION

FASTER INVENTORY TURNOVER
REDUCTION IN SAFETY STOCK

LOWER TRANSPORTATION COSTS INCREASED WAREHOUSE SPACE

REDUCTION IN LEAD TIME
ACCURATE FORECASTING

SELF DEPENDENCE
BETTER WORKING CAPITAL UTILIZATION

FASTER INVENTORY TURNOVER
REDUCTION IN SAFETY STOCK

LOWER TRANSPORTATION COSTS INCREASED WAREHOUSE SPACE

REDUCTION IN LEAD TIME
ACCURATE FORECASTING

SELF DEPENDENCE
BETTER WORKING CAPITAL UTILIZATION

FASTER INVENTORY TURNOVER
REDUCTION IN SAFETY STOCK

LOWER TRANSPORTATION COSTS INCREASED WAREHOUSE SPACE

REDUCTION IN LEAD TIME
ACCURATE FORECASTING

SELF DEPENDENCE
BETTER WORKING CAPITAL UTILIZATION

FASTER INVENTORY TURNOVER
REDUCTION IN SAFETY STOCK

EVERYDAY LOW PRICE

HIGH VOLUME PURCHASE

SUSTAINABLE COMPETITIVE ADVANTAGE
OVERALL COST SAVING IMPROVED CUSTOMER SERVICE

STOCK MANAGEMENT

EVERYDAY LOW PRICE

HIGH VOLUME PURCHASE

SUSTAINABLE COMPETITIVE ADVANTAGE
OVERALL COST SAVING IMPROVED CUSTOMER SERVICE

STOCK MANAGEMENT

EVERYDAY LOW PRICE

HIGH VOLUME PURCHASE

SUSTAINABLE COMPETITIVE ADVANTAGE
OVERALL COST SAVING IMPROVED CUSTOMER SERVICE

STOCK MANAGEMENT

EVERYDAY LOW PRICE

HIGH VOLUME PURCHASE

SUSTAINABLE COMPETITIVE ADVANTAGE
OVERALL COST SAVING IMPROVED CUSTOMER SERVICE

STOCK MANAGEMENT

EVERYDAY LOW PRICE

HIGH VOLUME PURCHASE

SUSTAINABLE COMPETITIVE ADVANTAGE
OVERALL COST SAVING IMPROVED CUSTOMER SERVICE

STOCK MANAGEMENT



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