"People think we got big by putting big stores in small towns.

Really,
we got big by replacing inventory with information."

Sam Walton, Founder of Wal-Mart

Type

Discount department store/Public (NYSE: WMT)

Founded

Rogers, Arkansas, USA (1962)

Headquarters

Bentonville, Arkansas, USA

Key people

Sa Walton (19181992), Founder

H. Lee Scott, CEO
S. Robson Walton, Chairman
Tom Schowe, CFO

Industry

Retail

Products

Discount stores, grocery stores, and hypermarkets

Revenue

US$351.1 billion (2007)

Industry

US$11.3 billion (2007)

Products

1.9 million (2007)

Website

http://www.walmart.com

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8500 Stores
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World Market Share

 Plan
Implement
Control

Raw Materials

Production

Material Flow and Storage

Storage

Information Flow and Storage

Customer

What is supply chain?

The sequence of organizations - their facilities, functions, and
activities - that are involved in producing and delivering a product
or service.

Wal-Mart Supply Chain

Advantage of Wal-Mart Supply Chain

Lower inventories
Higher productivity
Greater agility
Shorter lead times
Higher profits
Greater customer loyalty

Wal-Mart Strategy

Everyday low price

Effective use of logistics management
Effective inventory control
Bargaining power over suppliers
Global Expansion for new market opportunity

How Wal-Mart Manage the

Supply Chain ?
Procurement and Distribution
Logistics management
Inventory management

 Bull whip effect

Procurement and
Distribution

Vendor managed inventory

Bull Whip Effect

Occurs when slight demand variability is magnified as information
moves back upstream.

Bull Whip Effect

Vendor Managed Inventory

A means of optimizing Supply Chain performance in
which the manufacturer is responsible for maintaining
the distributors inventory levels. The manufacturer has
access to the distributors inventory data and is
responsible for generating purchase orders.
Manufacturers generate orders, not distributors or
retailers Stocking information is accessed using EDI
A first step towards supply chain collaboration
Increased speed, reduced errors, and improved service

Logistics
Management
Cross Docking
Hub and Spoke

Cross Docking

Wal-Mart
Done on 85% goods sold
Savings of 2-3% on sales
Continuous communication
needed

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 percent of their value,
their efficient management is critical in supply chain
operations.
These include deployment strategies (push versus pull),
control policies --- the determination of the optimal levels
of order quantities and reorder points, and setting safety
stock levels, at each stocking location

Wal-Mart's
Communication Network
Cross Docking relies on continuous communication
between Wal Marts suppliers, distribution centers,
and every point of sale system in each store.
This enables orders to flow in, get packaged and then
shipped.

How does Wal-Mart do this?

Wal Mart operates their own satellite
network.
Wal Marts satellite network sends the point
of sale (POS) data directly to 4000 vendors

Radio Frequency Identification

Automated Data collection based on an
electronics not a barcode
Tag can be imbedded in the product or stuck on
the exterior case or pallet
Reader instead of a barcode scanner
Allows fully automated data collection with the
use of portals
Can read many ID tags at a time

RFID..
Bar code and point-of-sale
data creates an instantaneous computer record of a sale
Radio frequency identification (RFID)
technology can send product data from an item to a reader
via radio waves
Internet
allows companies to communicate with suppliers,
customers, shippers and other businesses around the world,
instantaneously

How does RFID works ?

Information Technology: A
Supply Chain Enabler
Information links all aspects of supply chain
E-business
replacement of physical business processes with electronic ones

Electronic data interchange (EDI)

a computer-to-computer exchange of business documents

Electronic Data Interchange

Increased productivity
Reduction of paperwork
Lead time and inventory reduction
Facilitation of just-in-time systems
Electronic transfer of funds
Improved control of operations
Reduction in clerical labor
Increased accuracy